Jones v. Bank of Chapel Hill

• Decision Date: 01 February 1939
• Docket Number: 750.
• Citation: 1 S.E.2d 135,214 N.C. 794
• Parties: JONES v. BANK OF CHAPEL HILL.
• Court: North Carolina Supreme Court

1 S.E.2d 135

214 N.C. 794

JONES v. BANK OF CHAPEL HILL.

No. 750.

Supreme Court of North Carolina

February 1, 1939

The plaintiff on January 12, 1933, was indebted to defendant in the sum of $16,700 evidenced by four promissory notes. The plaintiff had financial reverses and became involved to such an extent that he could not meet his obligations. He made a compromise settlement of his indebtedness with defendant for $6,800 and $3,800, new money. A note for $10,600, secured by deed of trust on certain real estate, was made to secure defendant, also other collateral was deposited with defendant. Plaintiff had paid said indebtedness down to $2,850.

The plaintiff alleges: "That the first intimation or suggestion that the plaintiff had that it was the purpose of the defendant bank to repudiate this agreement and settlement with the plaintiff entered into in January, 1935, was on April 7, 1937, when the defendant bank wrote plaintiff to this effect, which letter was followed by another letter from the cashier of the bank dated April 14, 1937, stating that one of the old notes was long past due and the bank was expecting the plaintiff to pay the same, and this letter was written notwithstanding the many assurances on the part of the bank that the old notes would be cancelled and returned to the plaintiff as soon as it received said certificate from the bank's attorney; that no interest has been paid on any of said old notes since 1933, and since the compromise settlement of these notes in January 1935, there has been no intimation or suggestion on the part of the defendant bank that any interest should be paid on said notes, and all of said old notes aggregating $16,700.00 were fully paid by the compromise settlement hereinbefore set forth. Wherefore, plaintiff prays the Court: 1. That upon payment to the defendant by the plaintiff of the sum of $2,850.00 that the defendant be required and directed to cancel and deliver to the plaintiff the said note of $2,850.00 which was due on May 1, 1937, together with all of the collateral security deposited therewith and more particularly described in the complaint. 2. That the defendant be required and directed to cancel and deliver to the plaintiff four notes aggregating $16,700.00 as well as the E. H. Meadows assignment."

The sole material issue submitted to the jury, which was answered "Yes", is as follows: "Did the plaintiff enter into a compromise settlement of the four notes of the plaintiff held by the Bank, aggregating $16,700.00, in January, 1935, as alleged in the complaint?"

The Court below charged the jury as follows: "The plaintiff has offered evidence tending to show that such a settlement was made. There is no evidence to the contrary. I therefore instruct you that if you believe all the evidence and find the facts to be as they tend to show, that you should answer the first issue 'Yes'. Take the case gentlemen."

To the above charge the defendant excepted and assigned error. The defendant made numerous exceptions and assignments of error and appealed to the Supreme Court. The material ones and necessary facts will be considered in the opinion.

Fuller Reade, Umstead & Fuller, of Durham, for appellant.

S. C Brawley and J. S. Patterson, both of Durham, for appellee.

CLARKSON Justice.

The defendant, at the close of plaintiff's evidence and at the conclusion of all the evidence, made motions in the Court below for judgment as in case of nonsuit. C.S. § 567. The motions were overruled and in this we can see no error.

The defendant excepted and assigned error, which cannot be sustained, to all the evidence relating to the alleged contract of settlement between the plaintiff and its cashier M. E. Hogan, in reference to the compromise of the four notes totalling $16,700. M. E. Hogan was dead at the time of the trial. Hogan was cashier of the bank for twenty years and was the only active officer of its bank. The defendant had no other active officer of its bank. Plaintiff's dealing for years was solely and alone with Hogan. Many letters through a period of years were exchanged between plaintiff and Hogan and many payments on the notes and renewals were made with Hogan. Defendant had certain collateral and sold same. It now has collateral of plaintiff--same was given to and deposited with the defendant Bank under the contract and agreement between the plaintiff and defendant Bank's cashier, which contract the defendant now seeks to repudiate. The Attorney for the Bank testified that he remembered the time Mr. Hogan and plaintiff had him prepare the note for $10,600, secured by deed of trust, and Mr. Hogan had him to investigate the record and gave an opinion as to the title.

From the long course of dealings between plaintiff and defendant, the defendant knowing all of the facts relative to the contract and settlement by its conduct has ratified same. Under the facts and circumstances of the case we think the cashier of the defendant Bank had the authority to make the contract here involved because the Bank had held him out as its only active executive officer for a long period of time and all the business plaintiff had with the Bank was generally transacted with said cashier. If the cashier did not have such authority, the Bank by its long silence and acquiescence, and by its receiving and using the benefits accruing to it, has ratified said contract, and every part thereof, both good and bad, and it cannot now be heard to contend otherwise.

In Tiffany on Agency, Chap. VIII, p. 180, it is held: "The principal is liable upon a contract 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 unauthorized, 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 actual authority. 'Apparent authority,' as the term is used in the foregoing section, includes authority to do whatever is usual and necessary to carry into effect the principal power conferred upon the agent and to transact the business which he is employed to transact; and the principal cannot restrict his liability for acts of his agent within the scope of his apparent authority by limitations thereon of which the person dealing with the agent has not notice. (At p. 181) ***. The principal may be estopped...