The plaintiff, James Schoenberger, brought a small claims action * * * in the * * *

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The plaintiff, James Schoenberger, brought a small claims action * * * in the * * * circuit court of Cook County against the defendant, Chicago Transit Authority (hereinafter C.T.A.) to recover contract damages. The trial court ruled in favor of the defendant and against the plaintiff. The plaintiff appeals from this judgment. At issue is whether the C.T.A. may be held liable under agency principles of a promise allegedly made by an employee of the C.T.A. to the plaintiff at the time that he was hired to the effect that he would receive a $500 increase in salary within a specified period of time. We affirm.

   Schoenberger was employed by the C.T.A. from August 16, 1976, to October, 1976, at a salary of $19,300. The facts surrounding his employment with the C.T.A. are controverted. The plaintiff’s position at the trial was that he took the job with the C.T.A. at a salary of $19,300 upon the condition that he would receive a $500 salary increase, above and beyond any merit raises, within a year. Schoenberger testified at trial that, after filling out a job application and undergoing an initial interview with a C.T.A. Placement Department interviewer, he met several times with Frank ZuChristian, who was in charge of recruiting for the Data Center. At one of the meetings with ZuChristian, the Director of Data Center Operations, John Bonner, was present. At the third meeting held between ZuChristian and the plaintiff, ZuChristian informed the plaintiff that he desired to employ him at $19,800 and that he was making a recommendation to this effect. Schoenberger told ZuChristian that he would accept the offer. ZuChristian informed him that a formal offer would come from the Placement Department within a few days. However, when the offer was made, the salary was stated at $19,300. Schoenberger did not accept the offer immediately. Rather, he called ZuChristian for an explanation of the salary difference. After making inquiries, ZuChristian informed Schoenberger that a clerical error had been made and that it would take a number of weeks to have the necessary paperwork reapproved because several people were on vacation. To expedite matters, ZuChristian suggested Schoenberger take the job at the $19,300 figure and that he would see that the $500 would be made up to him at the April, 1976, October, 1976, or at the latest, the April, 1977, performance and salary review. The $500 increase was to be prospective and not retroactive in nature. John Hogan, the head of the Data Center, was aware of this promise, ZuChristian informed Schoenberger. Because the defendant was found to be ineligible for the October, 1976 performance evaluation and the April, 1976 review was cancelled, the April, 1977 evaluation was the first evaluation at which the issue of the salary increase was raised. When the increase was not given at that time, the plaintiff resigned and filed this suit.

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   The trial court, after hearing the evidence and reviewing the exhibits, ruled in favor of the defendant. The trial court ruled: (1) that it was inconceivable that the plaintiff thought ZuChristian had final authority in regard to employment contracts; and (2) that it was not shown that a commitment or promise was made to the plaintiff by an authorized agent of the C.T.A.

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   The main question before us is whether ZuChristian, acting as an agent of the C.T.A., orally contracted with Schoenberger for $500 in compensation in addition to his $19,300 salary. The authority of an agent may only come from the principal and it is therefore necessary to trace the source of an agent’s authority to some word or act of the alleged principal. [Citations.] The authority to bind a principal will not be presumed, but rather, the person alleging authority must prove its source unless the act of the agent has been ratified. [Citations.] Moreover, the authority must be founded upon some word or act of the principal, not on the acts or words of the agent. [Citations.]

   * * * Both Hogan and Bonner, ZuChristian’s superiors, testified that ZuChristian had no actual authority to either make an offer of a specific salary to Schoenberger or to make any promise of additional compensation. Furthermore, ZuChristian’s testimony corroborated the testimony that he lacked the authority to make formal offers. From this evidence, it is clear that the trial court properly determined that ZuChristian lacked the actual authority to bind the C.T.A. for the additional $500 in compensation to Schoenberger.

   Nor can it be said that the C.T.A. clothed ZuChristian with the apparent authority to make Schoenberger a promise of compensation over and above that formally offered by the Placement Department. The general rule to consider in determining whether an agent is acting within the apparent authority of his principal was stated in [citation] in this way: 

Apparent authority in an agent is such authority as the principal knowingly permits the agent to assume or which he holds his agent out as possessing—it is such authority as a reasonably prudent man, exercising diligence and discretion, in view of the principal’s conduct, would naturally suppose the agent to possess.

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   Here, Schoenberger’s initial contact with the C.T.A. was with the Placement Department where he filled out an application and had his first interview. There is no evidence that the C.T.A. did anything to permit ZuChristian to assume authority nor did they do anything to hold him out as having the authority to hire and set salaries. ZuChristian was not at a management level in the C.T.A. nor did his job title of Principal Communications Analyst suggest otherwise. The mere fact that he was allowed to interview prospective employees does not establish that the C.T.A. held him out as possessing the authority to hire employees or set salaries. Moreover, ZuChristian did inform Schoenberger that the formal offer of employment would be made by the Placement Department.

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   Our final inquiry concerns the plaintiff’s contention that irrespective of ZuChristian’s actual or apparent authority, the C.T.A. is bound by ZuChristian’s promise because it ratified his acts. Ratification may be express or inferred and occurs where ‘‘the principal, with knowledge of the material facts of the unauthorized transaction, takes a position inconsistent with nonaffirmation of the transaction.’’ [Citations.] Ratification is the equivalent to an original authorization and confirms that which was originally unauthorized. [Citation.] Ratification occurs where a principal attempts to seek or retain the benefits of the transaction. [Citations.]

   Upon review of the evidence, we are not convinced that the C.T.A. acted to ratify ZuChristian’s promise. * * *

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   For the reasons we have indicated, the judgment of the circuit court of Cook County granting judgment in favor of the defendant, C.T.A., is affirmed.

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Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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