{ "id": 8611212, "name": "ROY LAWSON v. BANK OF BLADENBORO", "name_abbreviation": "Lawson v. Bank of Bladenboro", "decision_date": "1932-10-26", "docket_number": "", "first_page": "368", "last_page": "374", "citations": [ { "type": "official", "cite": "203 N.C. 368" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "157 N. C., 375", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "187 N. C., 526", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8654314 ], "opinion_index": 0, "case_paths": [ "/nc/187/0526-01" ] }, { "cite": "130 S. E., 609", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "190 N. C., 829", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8615769 ], "opinion_index": 0, "case_paths": [ "/nc/190/0829-01" ] }, { "cite": "130 N. C., 152", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11272896 ], "opinion_index": 0, "case_paths": [ "/nc/130/0152-01" ] }, { "cite": "147 N. C., 385", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "126 N. C., 523", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8661000 ], "opinion_index": 0, "case_paths": [ "/nc/126/0523-01" ] }, { "cite": "149 N. C., 434", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11270902 ], "opinion_index": 0, "case_paths": [ "/nc/149/0434-01" ] }, { "cite": "153 N. C., 334", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11272426 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/153/0334-01" ] }, { "cite": "157 N. C., 373", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8657761 ], "opinion_index": 0, "case_paths": [ "/nc/157/0373-01" ] }, { "cite": "197 N. C., 438", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8629507 ], "opinion_index": 0, "case_paths": [ "/nc/197/0438-01" ] }, { "cite": "142 N. C., 191", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "71 Mo. App., 451", "category": "reporters:state", "reporter": "Mo. App.", "case_ids": [ 1440483 ], "opinion_index": 0, "case_paths": [ "/mo-app/71/0451-01" ] } ], "analysis": { "cardinality": 657, "char_count": 15691, "ocr_confidence": 0.497, "pagerank": { "raw": 2.2175328950092404e-07, "percentile": 0.7772561257432383 }, "sha256": "db0f33e29f9a7540ffe988e71a4670378eb2e2a40c1f755266e201df71fbdbbc", "simhash": "1:267c4d1d0acfede2", "word_count": 2784 }, "last_updated": "2023-07-14T19:49:40.426370+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "ROY LAWSON v. BANK OF BLADENBORO." ], "opinions": [ { "text": "Clarkson, J.\nIt was agreed that the court below should find the facts. We are bound by the findings if there is sufficient competent evidence to support them, which we think there is.\nThe first question involved: Did the defendant, as plaintiff\u2019s agent, violate the trust imposed in it by the plaintiff in acceptance of $1,500.25 and delivery of the draft for $1,884.22 with the bill of lading to Bladen-boro Cotton Mills? We think it did.\nThe plaintiff, Roy Lawson, sold to G. W. Branch fifty bales of cotton for $1,884.22. Branch sold the cotton to the Bladenboro Cotton Mills, and drew a sight draft for $1,884.22 on the cotton mills payable to Roy Lawson, with the bill of lading for the cotton attached. Roy Lawson deposited the draft in the Citizen\u2019s Bank of Morven, Ga. The draft was sent to the Bank of Bladenboro for collection. It turned out that Branch owed the cotton mills $383.97, and when the $1,884.22 draft with the bill of lading was presented by the Bank of Bladenboro to the cotton mills, the defendant Bank of Bladenboro accepted from the cotton mills $1,500.25, and turned the draft and bill of lading for the cotton over to the cotton mills, and allowed a deduction from the draft of $383.97, and sent $1,500.25 to the Bank of Morven, Ga., which was credited to plaintiff\u2019s account.\nThe well settled law in this jurisdiction is thus stated: \u201cIf a bank receive a paper for collection on a party at a distant place, the agent it employs at the place of payment is the agent of the owner and not of the bank; and, if the bank selects a competent and reliable agent and gives proper instructions, its responsibilities cease.\u201d Bank v. Bank, 71 Mo. App., 451; Bank v. Floyd, 142 N. C., 191-2; Qualls v. Bank, 197 N. C., 438.\nIf nothing else appeared the plaintiff would be entitled to recover the amount be sued for from the defendant. But there is a second question involved: Has the plaintiff ratified the acts of its agent, the defendant, in delivery of the said draft and bill of lading for less than the amount of the draft? We think so.\nThe defendant sent the $1,500.25 to the Bank of Morven, and notified it of the deduction. The Bank of Morven received the amount on Saturday, credited it to the account of plaintiff, and notified plaintiff on Monday of the deduction. Plaintiff saw the $1,500.25 draft in the Bank of Morven and in person saw the statement of the deduction made by the cotton mills. The plaintiff thereafter attempted to collect the amount from Branch and, after learning be could not collect from Branch, attempted to collect the difference from defendant, which was about seven days thereafter, and brought this action 24 March, 1932.\nIt will be noted in the present case that plaintiff is not suing Bladen-boro Cotton Mills, the party whom be bad a draft on, but is suing the agent, the Bank of Bladenboro. It is well settled that if be bad sued the cotton mills the suit would be a ratification. Tbe matter is thus stated in 21 E. C. L., Principal and Agent, part sec. 106, at pp. 927-8: \u201cEatification of the unauthorized acts of one assuming to act as agent may be either express or implied: express as by spoken or written words applied, when the conduct of the principal constitutes an assent to the acts in question. And the acts of the principal, it seems, will be liberally construed in favor of a ratification. One of the most unequivocal methods of showing a ratification of an agent\u2019s unauthorized act is the bringing of an action or basing a defense thereon. For example, where an agent sells the goods of bis principal at an agreed price, to be paid for in services to be rendered to the agent by the purchaser, and the principal, with full knowledge of the facts, sues the purchaser in as-sumpsit for the price agreed, be thereby affirms the contract of bis agent, both as to the sale and the mode of paying the price.\u201d\nIn the case of Bank v. Justice, 157 N. C., 373, the plaintiff bank held a note of $1,400 on defendant Justice, and sent it to the Mitchell County Bank of Bakersville, N. C., for collection. Tbe bank returned the note of $1,400, and remitted $432 which it collected and credited on the note and the cashier of the bank wrote plaintiff \u201cthe drawers of this paper claim that the note should have been for $500 instead of $1,400, and the $432 which they ask that we tender you is to cover the $500 and interest for three years and four months, making $600, less the $68 credit which appears on the back of the note. If you do not care to accept enclosed remittance, you can return same to us. . . . Tbe drawers of the note tell me they will stand to be sued on the paper before making any further settlement.\u201d The plaintiff made no reply to this communication, and without returning or offering to return the $432, claiming that same shall be considered only as a credit for that amount, instituted the present suit to recover the balance of the $1,400.\nIn the above case, the suit was not against the agent who made full disclosures of the purpose of Justice, and the note was not turned over to Justice by the agent bank, but returned to the plaintiff bank. Full warning was made by the collecting bank and the makers of the note. The plaintiff bank sued the makers of the note. The Court said, at p. 375: \u201cIn our opinion, this letter gave clear intimation to plaintiff that if the money was retained it was to be in settlement of the claim, and under our decisions further recovery may not be allowed. Aydlett v. Brown, 153 N. C., 334; Armstrong v. Lonon, 149 N. C., 434; Cline v. Rudisill, 126 N. C., 523. . . . It is urged that plaintiff did not know the positive character of the tender when the latter was received transmitting the payment, but he knows it now and insists on retaining the money. The principle applicable is very well stated in 30 Cyc., p. 1267, as follows: 'It is a well settled principle of ratification that the principal must ratify the whole of an agent\u2019s unauthorized act or not at all, and cannot accept its beneficial results and repudiate its burdens. It follows as a general rule that if a principal with full knowledge of all the material facts takes and retains the benefits of the unauthorized act of his agent, he thereby ratifies such act and with the benefits accepts the burdens resulting therefrom.\u2019 R. R. v. R. R., 147 N. C., 385.\u201d\nIn DeLoache v. DeLoache, 189 N. C., at p. 398, the learned former Associate Justice Varser, of this Court, in reference to this subject said: \u201cBusiness transactions cannot be safely conducted upon secret reservations of mind that are totally inconsistent with the open acts. It was open to plaintiff to refuse to accept check No. 2 if he was unwilling to affirm its provisions in every respect. When he accepted its proceeds he made effective and binding its every stipulation. Ore Co. v. Powers, 130 N. C., 152; Aydlett v. Brown, 153 N. C., 334.\u201d\nIn Parks v. Trust Co., 195 N. C., at p. 455-6: \u201cSpeaking to the subject in Waggoner v. Publishing Co., 190 N. C., 829, 130 S. E., 609, it was said: 'The defendant will not be permitted to repudiate the act of its agent as being beyond the scope of his authority, and at the same time accept the benefits arising from what he has done while acting in its behalf. Starkweather v. Gravely, 187 N. C., 526. It is a rule too well established to admit of debate that if a principal, with full knowledge of the material facts, takes and retains the benefits of an unauthorized act of his agent, he thereby ratifies such act, and with the benefits he must necessarily accept the burdens incident thereto or which naturally result therefrom. The substance of ratification is confirmation after conduct. 2 C. J., 467. It is also a settled principle of ratification that the principal must ratify the whole of his agent\u2019s unauthorized act or not at all. He cannot accept its benefits and repudiate its burdens. Bank v. Justice. 157 N. C., p. 375.\u201d\nIn Sugg v. Credit Co., 196 N. C., at p. 99, it is said: \u201cConceding without deciding, that the cashier of the Snow Hill Banking and Trust Company, was not authorized by the payee to endorse the check in question, still we think the plaintiff must fail in his suit if not upon the principle of ratification then upon the doctrine of estoppel. The law will not permit him to take and to hold the fruits of what was done for him by the cashier of the bank and at the same time repudiate its consequences. Bank v. Justice, 157 N. C., 375.\u201d\nIf plaintiff had brought an action against the cotton mills the authorities are to the effect that the present suit was an unequivocal ratification. We think, under the facts and circumstances of this case, the principle applies to the defendant agent, the Bank of Bladenboro. The plaintiff should have promptly returned the $1,500.25 to the Bank of Bladenboro, and the bank could then have called on the cotton mills to pay the full amount of the draft or the parties placed in statu quo. This cannot now be done. If the Bank of Bladenboro or the cotton mills could not or did not place the parties in statu quo, plaintiff would have at once a cause of action.\nIn Mechem on Agency, 2d ed. Yol. 1, sec. 479, p. 352, we find: \u201cBatifieation is not a matter to be presumed; it must be proved. And the burden of proof rests upon him who alleges it.\u201d Section 481, p. 353: \u201cWhere written instruments of ratification are to be construed, the question is for the court. So, if the facts are undisputed and only one inference can reasonably be drawn from them, the question whether they constitute ratification or not, is one of law for the court; but where the facts are in dispute, or where the inferences to be deduced from them are such that men may reasonably differ concerning them, the question of ratification or not is for the jury. This is especially true where ratification is sought to be implied from conduct, or deducted from acts of alleged acquiescence,\u201d etc.\nWe think the undisputed facts in this case constitute ratification. The plaintiff could not accept the money derived from the draft, less the deduction, and reserve the right to repudiate the transaction and sue for the amount deducted. The suit was an unequivocal ratification.\nMr. Mordecai, in his Law Lectures (1907), at p. 72, tersely states the principle: \u201cThe principal cannot of his own authority ratify a part and repudiate the rest, he cannot take the rose without the thorns.\u201d\nTbe hardship on plaintiff in a distant state is apparent, but being sui juris, no fraud or mistake alleged, or proved, he must bear the consequence of not repudiating his agent\u2019s conduct and returning the draft. He made an election which he is bound by and the court cannot relieve him. The judgment of the court below is\nAffirmed.", "type": "majority", "author": "Clarkson, J." } ], "attorneys": [ "II. H. Ciarle for plaintiff.", "Varser, Lawrence, McIntyre & Henry for defendant." ], "corrections": "", "head_matter": "ROY LAWSON v. BANK OF BLADENBORO.\n(Filed 26 October, 1932.)\n1. Appeal and Error J c \u2014 Findings of fact are conclusive on appeal when supported by evidence.\nWhere the court below finds the facts under an agreement of the parties his findings are conclusive on appeal when supported by sufficient competent evidence.\n2. Bills and Notes I b \u2014 Bank collecting draft is agent of drawer and is liable to him for allowing unauthorized deduction.\nWhere A. sells cotton to B. who in turn sells it to a cotton mill, and gives A. a draft on the mill in payment of the purchase price, and A. ships the cotton to the mill and deposits the draft with bill of lading attached in a bank which sends the draft to another bank for collection, and the collecting bank allows the mill to deduct therefrom an amount owed it by B. and remits the balance to A.: Held, the collecting bank was the agent of A. and is liable to him for the amount of the deduction unless A. had authorized or ratified such deduction.\n3. Same: Principal and Agent C a \u2014 Held: drawer ratified act of collecting bank in allowing drawee to deduct sum from amount of draft.\nWhere the collecting bank allows the drawee of a draft to deduct therefrom a certain sum due the drawee by another, and the drawer is notified of such deduction and accepts the amount collected and attempts to collect the amount of the deduction from the one who owed the sum to the drawee: Held, the acceptance by the drawer of the amount collected on tlie draft and his attempt to collect the amount of the deduction from the third person constituted a ratification of the act of the collecting bank in allowing the deduction, and the drawer may not thereafter collect the amount of the deduction from the collecting bank.\n4. Principal and Agent O a \u2014 Principal must ratify acts of agent in whole or reject them in whole.\nA principal will not be allowed to accept the benefits of the unauthorized acts of his agent and repudiate the burdens, but the principal must ratify the whole transaction or reject it completely, and where written instruments of ratification are to be construed or where the facts are undisputed, or only one inference can be drawn therefrom, the question of ratification is for the court.\nAppeal by plaintiff from Small, J., at September Term, 1932, of BladeN.\nAffirmed.\nTbe judgment of tbe court below is as follows:\n\u201cIt baying been agreed that tbe court find tbe facts, tbe court finds tbe following: That Eoy Lawson, tbe plaintiff, sold to Gr. ~W. Branch fifty bales of cotton, that Gr. W. Branch resold tbe cotton to tbe Bladen-boro Cotton Mills; that Eoy Lawson consigned tbe fifty bales of cotton to Bladenboro Cotton Mills with draft attached to tbe bill of lading-made by Gr. ~W. Branch, said draft being made payable to Eoy Lawson at sight for tbe sum of $1,884.22. That said draft with bill of lading-attached was transmitted to tbe Bank of Bladenboro and tbe Bank of Bladenboro notified tbe Bladenboro Cotton Mills that it bad same for collection and that tbe Bladenboro Cotton Mills deducted from tbe amount of said draft tbe amount of $383.97, that said Branch owed said Cotton Mills.\nThat said Bank of Bladenboro forwarded draft as agent for plaintiff to tbe Citizens Bank of Morven, Georgia, that tbe bank of Morven, Georgia, notified plaintiff of said deduction by Bladenboro Cotton Mills and that said Morven Bank credited tbe account of plaintiff with $1,500.25, that plaintiff learned of said credit of said Bank of Morven on Monday following Saturday tbe Bank of Morven received said draft. That plaintiff accepted said draft from bis forwarding agent tbe Bank of Bladenboro and allowed same to remain to bis credit in tbe Bank of Morven, Ga. That subsequent to receiving tbe $1,500.25 draft in Georgia bank plaintiff attempted to collect tbe $383.97 difference from G. W. Branch. That practically seven days thereafter, that is after receipt and credit of said amount in tbe Georgia bank and after plaintiff failed to collect from Branch be then attempted to collect tbe difference from tbe Bank of Bladenboro. Tbe plaintiff failed to attempt to collect from tbe Bank of Bladenboro until be learned be could not collect from Branch. The plaintiff saw exhibited to him the $1,500.25 draft in the Bank of Morven, Georgia, and knew of the deduction on Monday following the Saturday the Georgia bank received same, and that in person he saw a statement of the deduction made by the Bladenboro Cotton Mills.\nThe court finds the above facts in this cause: It is therefore ordered, adjudged and decreed that the plaintiff take nothing in this action and that the plaintiff pay the costs, to be taxed by the clerk.\u201d\nThe plaintiff\u2019s only exception and assignment of error is as follows: \u201cThe court erred in rendering judgment for defendant upon the facts found and contained in the judgment.\u201d\nII. H. Ciarle for plaintiff.\nVarser, Lawrence, McIntyre & Henry for defendant." }, "file_name": "0368-01", "first_page_order": 436, "last_page_order": 442 }