Hooper v. Merchants Bank & Trust Co.

130 S.E. 49, 190 N.C. 423, 1925 N.C. LEXIS 92
CourtSupreme Court of North Carolina
DecidedNovember 4, 1925
StatusPublished
Cited by8 cases

This text of 130 S.E. 49 (Hooper v. Merchants Bank & Trust Co.) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hooper v. Merchants Bank & Trust Co., 130 S.E. 49, 190 N.C. 423, 1925 N.C. LEXIS 92 (N.C. 1925).

Opinion

VaeseR, J.

The defendant’s exceptions challenge instruction given to the jury in the county court as follows: “The principal is held to be liable on contracts duly made by his agent with a third person (1) when the agent acts within the scope of his actual authority; (2) when the contract, although unwise, has been ratified; (3) when the agent acts within the scope of his apparent authority, unless the third person has notice that the agent is exceeding his authority, the term “apparent authority,” including the power to do whatever is usually done and' necessary to be done, in order to carry into effect the particular power conferred upon the agent and to transact the business or to execute the commission which has been entrusted to him; and the principal cannot restrict his own liability for acts of his agent which are within the scope of his -apparent authority by limitations thereon, of which the person dealing with his agent has no notice.”

The foregoing is a correct statement of the law, clearly made, applicable to the facts in this case. The defendant has no basis for complaint at this instruction. 'When the verdict is interpreted in the light of this clear instruction, it appears that the jury has found that the defendant had actual knowledge that plaintiff’s agent did not have the authority to make payment beyond the amount of the note, interest and costs in the suit on the note. These items were legal and just debts due by the plaintiff to the defendant bank. WEen plaintiff’s agent paid the expense incurred by defendant in employing counsel, without authority, as the jury has found, upon defendant’s request, this was clearly a receipt of money to the use of the plaintiff. Bank v. McEwen, 160 N. C., *426 414; Biggs v. Ins. Co., 88 N. C., 141; Ferguson v. Mfg. Co., 118 N. C., 946; Hall v. Presnell, 157 N. C., 292; R. R. v. Smitherman, 178 N. C., 599; Thompson v. Power Co., 154 N. C., 13; Banls v. Hay, 143 N. C., 326; Wynn v. Grant, 166 N. C., 39.

The facts in the instant record show a very little divergence between the contentions of the plaintiff and the defendant as to what happened with reference to- the transaction out of which this suit arose. The defendant contends that it was a voluntary payment, with full knowledge of the facts, which cannot support this action to recover the money so paid. This is a correct principle as between the plaintiff and the defendant, when the facts support it. Lambeth v. Power Co., 152 N. C., 371; Beck v. Bank, 161 N. C., 201; Devereux v. Ins. Co., 98 N. C., 6; Matthews v. Smith, 67 N. C., 374; Comrs. v. Comrs., 75 N. C., 240; Pool v. Allen, 29 N. C., 120; Adams v. Reeves, 68 N. C., 134; Comrs. v. Setzer, 70 N. C., 426; Brummitt v. McGuire, 107 N. C., 351. This transaction was had by plaintiff’s agent and the defendant, and the jury finds that the defendant had actual notice that, plaintiff’s agent was without authority to make the payment in controversy. The law relating to voluntary payments by a party in person does not apply.

The defendant contends that plaintiff, after notice that his agent had made the payment, ratified the transaction and is therefore estopped to contend for a recovery of the same and moves in this Court to dismiss plaintiff’s action, for that, the complaint does not set out sufficient facts to constitute a cause of action. "Waiving plaintiff’s contention that this motion is based upon the evidence and not upon the pleadings, we are of opinion that the doctrine of ratification does not apply. Plaintiff justly owed to the defendant bank $2,500 principal and $22.50 interest on his note held by the bank. A payment of this, after the bank had instituted suit, justly and properly entitled the bank to collect the actual court costs incurred in its suit on plaintiff’s note, which was admittedly past due. There was ample consideration to support the payment of these items. That was the entire transaction authorized to be done by plaintiff’s agent, according to the finding of the jury.

Immediately upon his finding out that the excess payment had been made, plaintiff goes to the defendant and demands a return of the excess payment, which is declined, and this suit is instituted to recover the same. The only part of the transaction that was open to this plaintiff to ratify, or not to ratify, was the payment of the excess above the items justly due the defendant. If he had attempted to disaffirm the payment of the amounts actually due, the defendant had the full right and ample power to refuse his demand. The items of the transaction are separable, although the entire payment was included in one *427 check to the defendant. The facts do not support tbe plea of ratification. The doctrine of ratification is clearly set forth in 21 R. C. L., 933; Andrews v. Robertson, 87 Am. St. Rep., 870; Meeeham on Agency, sec. 167; R. R. v. R. R., 147 N. C., 368; Bank v. Justice, 157 N. C., 373; Bank v. Drag Co., 152 N. C., 142; Christian v. Yarborough, 124 N. C., 72; Rudasill v. Falls, 92 N. C., 226; Crawford v. Barkley, 18 Ala., 270; Hodnett v. Tatum, 9 Ga., 270; Bank v. Hanner, 14 Mich., 208; Coleman v. Itache, 1 Oreg., 115; Norwood v. Lassiter, 132 N. C., 57; McCullers v. Cheatham, 163 N. C., 64.

Eatification is based upon the plain principle of honesty that a party cannot retain the benefits and escape the burdens of an act done by an unauthorized ag’ent. In this case the plaintiff has retained no benefits. His paid note is not a benefit. It is evidence of payment when marked paid or surrendered to him. The consideration for payment of note and interest was the obligation already incurred by plaintiff to the bank, and the note evidenced this obligation, and the payment of the costs automatically ended the bank’s right to proceed with the suit, consequently it was the law that fixed the rights of the parties upon the payment. The law raised an implied promise to repay the money received without consideration.

A benefit as applied to the case at bar, is some legal right, or thing of value, that the plaintiff accepted for the excess payment to which he was not otherwise entitled. Harness v. Lumber Co., 17 Okla., 624; Page on Contracts (2 ed.), secs. 514, 515; Williston on Contracts, vol. I, sec. 102A. There must be a consideration to support the payment by the unauthorized agent in order to give the principal the opportunity to accept or ratify.

A valuable consideration in a legal sense, may consist of either a benefit to the promissor, or a detriment to the promisee. Page on Contracts, supra; Williston on Contracts, supra., sec. 99, et seq.; Cherokee County v. Meroney, 173 N. C., 653; Mfg. Co. v. McCormick, 175 N. C., 277.

Usually the act or promise is a benefit to the one and a detriment to the other, and when it is of such nature it comes clearly within the definition of consideration. Kirkman v. Hodgin,

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Bluebook (online)
130 S.E. 49, 190 N.C. 423, 1925 N.C. LEXIS 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hooper-v-merchants-bank-trust-co-nc-1925.