Case Name: The Bank of St. Mary's v. A. Calder; The Same v. T. Street
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1849-01
Citations: 3 Strob. 403
Docket Number: 
Parties: The Bank of St. Mary’s v. A. Calder. The Same v. T. Street.
Judges: O’Neall, J. — Evans, J. — Frost, J. — and Withers, J.— concurred.
Reporter: South Carolina Law Reports
Volume: 34
Pages: 403–411

Head Matter:
The Bank of St. Mary’s v. A. Calder. The Same v. T. Street.
The payment of overdrafts by a cashier appointed to keep money, and pay it to the checks of persons entitled to draw, is, without some special excuse, a violation of duty. Minor v. The Mechanic's Bank, 1 Pet. 46.
By his own act, whethei obtaining a judgment in the name of his principal or any other act, an agent cannot discharge his liability.
An agent’s right to lend money being clear, a recognition of the loan, in a suit between the principal and the borrower, has no necessary tendency, in an enquiry between the agent and the principal, to show the principal’s approval of the security.
Before Wardlaw, J. at Charleston, May Term, 1848. J ’
These were actions of debt on bond, commenced February, 1844. The bond was by W. J. Yincent, and the two defendants, dated 13th November, 1841, payable to the Bank of St. Mary’s, with condition that the said W. J. Yincent, agent of the said Bank in Savannah, should well and truly conduct himself as such agent, should account for all sums of money •received by him, and should save harmless the said Bank from.all loss which might arise from his non-feasance or misfeasance.
General performance was pleaded.
The replication was, that Yincent, from the date of the bond until May, 1843, was employed as agent of the said Bank in Savannah, and on 20th May, 1842, at 'Savannah, whilst he was entrusted with the management of the said Bank, under the name of an agency, permitted one Isaiah Davenport to overdraw, on various checks, to wit: One for $947 52 ; two for $200, three for $41, four for $1,300 — all drawn by the said Davenport without funds, paid out of the funds of the Bank without authority, and in violation of his duty. The rejoinder was, that Yincent did not violate his duty as alleged, and issue was' joined' thereon.
Evidence. — The Bank of St.Mary’s was 'incorporated by the State of Georgia — John G. Winter was nominally its President, really was its entire owner. He did business in the name of the Bank at various offices, of which one was at St. Mary’s, one at Augusta, one at Savannah. He himself resided usually at Augusta, butfrequently visited Savannah and sometimes was at New York. Yincent was chief agent, or was director of the agency at Savannah, Under him, was generally a cashier, and some clerk. Frank Winter (no kinsman of John G. Winter’s,) was ’41 to ’43 in the employ of John G. Winter, occasionally the cashier at Savannah— sometimes about Augusta or elsewhere, and sometimes bore instructions from John G. Winter to Yincent. .There was also a confidential agent of John G. Winter’s at New York, who in the name of John G. Winter wrote to Yincent from New York, and who received and attended to letters which Yin-cent addressed to John G. Winter, at New York. Correspondence by letter was also carried on between John G. Winter at Augusta, and Yincent in Savannah. Yincent remained as agent until May, 1843, or some later day in that year— when he quit, or soon afterwards, his health failed, and he died in that year or the beginning of the next. Demand of compensation for damages or loss occasioned by his misconduct, including the matters mentioned in the replication, and others also, was made upon the defendants, his sureties, after his death.
Isaiah Davenport was in 1842 a trader in Savannah, who bought cotton and rice, and shipped them to New York. He k made his (deposits in the Bank of St. Mary’s, and received his accommodations there — he owed a balance on account of some old partnership matters to Irvine of New York, and had a letter, dated 14th December, 1841, from Irvine to him, (of which a copy was sent to Vincent,) wherein Irvine agreed that he would accept for Davenport, drafts on actual consignments made, and would keep the business which'Davenport might do with him under this arrangement, distinct from the, old transactions.
The account of Davenport with the Bank, kept by Vincent, contains many items: bills drawn by D., and discounted by the Bank, and money deposited by D. on one side; on the other, checks paid to D. by the Bank. . All' the bills and checks spoken of in the evidence, are mentioned in this account, except the check of $947 52, which is no where entered.
The checks of Davenport, mentioned in the replication, to wit: $947 52, dated 20th May 1842, and those of $200, $41,- and $1,300, dated 21st May, were exhibited, and except the one for $947 52, stand in the account opposite to their several dates, although itwas contended on the part of the defendants that those dates were not intended to fix the times of payment.
Davenport had no funds in the Bank between the 20th and 26th of May, 1842; but on the latter day, Davenport’s bill on Irvine, New York, for $2,500, at sixty days, was discounted. When presented, acceptance was refused; it was protested, and formal claim on account of it afterwards made upon Irvine, by Winter’s agent, at New York.
Afterwards a judgment at Savannah was obtained, the Bank of St. Mary’s against Davenport, for the amount contained in the four checks above mentioned, as for money lent — the suit having been commenced 28th June, 1842, and prosecuted by an attorney, under the instructions ■ of Vincent, and Vincent and Davenport both concurring in the statement that the money had been lent. Frank Winter’s testimony, by commission, shews that he has heard Winter give instructions to Vincent at Savannah, and that at some time he heard Winter instruct Vincent not to advance to Davenport; the date he cannot remember, but he thinks it was in the Spring 1842; whether before or after the bill of $2,500 was drawn, cannot say.
After the death of Vincent all the books and papers relating to the agency came to the hands of Winter, and besides the letter of Irvine to Davenport, above mentioned, many letters were produced, of which the most material parts in substance are as follows: all dated 1842.
January 18 — Winter in Augusta to Vincent, remarking concerning some transactions with other persons, “I see an ' overdraft of forty-one cents — you ought not to let one of four cents stand a day.”
May 13 — Vincent to Winter in New York, “I am inclined to think that Davenport will stop shipping. I have told him he must find some other place to draw at sight.”
May 14 — Winter, in New York to Vincent, (written before the last could have been received,) “I am not afraid of Irvine, but am fearful that Davenport may overdraw, and Irvine refuse to accept. I have just met Irvine’s clerk. You ought to make D. send his invoices by the same mail as the bill of lading and draft.”
May 18 — Vincent to Winter in New York, “D. has been dealing largely — yesterday I put a stop to his drawing without all the vouchers.”
May 19 — Vincent to Winter in New York, “D. has gone on too rapidly for one without means; he owes several shippers, whose cotton has been sent three weeks.”
May 19 — Winter in Augusta to Vincent, “be careful that D. does not draw for more than he ships.”
May 26 — Vincent to Winter in New York, “Enclosed is D’s. draft for $2,500, to be accepted by Irvine, which covers the balance of his shipments, not before drawn for.”
May 27 — Vincent to Winter in New York, “D. is in a worse fix than I supposed; I had let him have $1,500, for which he was to let me have bills of lading for shipment of rice yesterday, but has not, and I fear cannot. Enclosed is the second part of his bill for $2,500.”
July 6 — Winter in New York to Irvine, claims funds of D. for payment of bill for $2,500, dated 26th May, “of which lam owner and holder.”
William M. Martin. — (Witness called by the plaintiff, and re-called by defendants,) has experience in banking and exchange; not regular to allow a customer to overdraw; but it is usual in New York to overdraw and make good at 3 o’clock, the same day. It is not overdrawing to draw against money lent on a bill, although the bill may be afterwards protested, and loss be thus occasioned to the Bank.
Isaiah Davenport. — A witness for defendants, by commission. Winter controlled the Bank — and saw the accounts — ■ I had frequently overdrawn, and then given bills drawn against shipments, to reimburse the Bank — such bills I had sold to Winter himself. The bill of $2,500 was not intended to fill up overdrafts only; if it hhd been paid, there would have been a balance due to me — but I had overdrawn, and gave this bill drawn • against the balance undrawn of previous shipments, to pay as I had before done. The bill was not drawn on any particular lot of cotton; heavy losses had come, and my funds were appropriated to an old partnership debt. Overdraft is an irregularity — I had no authority to draw on Irvine ad libitum,.
William Vincent, (son of W. J. Vincent.— Witness for defendants,) was with my father in Savannah, as clerk — after a month from his entering upon the agency, until he quit— often saw Winter in the office; he always looked over the books; heard my father say to Winter, that Davenport had offered a bill for $2,500 — and he (Vincent) had refused it. Winter said, “let him have the money, but don’t let him know that I know any thing about it.” After the bill had been offered, (as father usually took bill of lading along with the bill of exchange, and no bill of lading had come,) I went for it. Davenport said that the vessel was undergoing a smoking, and he could not get it. Then Winter told father to indulge Davenport, but not let D. know that he had directed it.
I never heard of this claim till a month after father’s death. I do not know how it happened that the check for $947 52, was not entered in the book. I cannot say whether the money was paid before or after the bill was drawn.
His Honor left it to the jury to decide, from the evidence, whether W. J. Vincent had paid Davenport’s overdrafts; if he had, whether in so doing he had, without authority, violated the duty incident to his employment, or had been authorized either by the express instructions of Winter, or by instructions involved in the known course of business, or in the previous transactions with Davenport, which Winter had approved ; and whether there had been such adoption of Vincent’s acts by Winter, as shewed that they had been either previously authorised or subsequently affirmed.
He told them he thought that if the plaintiff was entitled to recover, he should recover not only the principal sum lost by the agent’s breach of duty, but also interest upon it.
The jury found for the plaintiff the principal sum of the four checks, — $2,488 52, without interest.
Both defendants appealed; one,
1. Because the plaintiff, upon the full knowledge of the facts, adopted the act of his agent, and thereby discharged him from further liability.
2. Because the verdict is against law and evidence.
The other,
1. Because all the evidence and all the circumstances proved that W. J. Vincent was at no time, during his lifetime, held or considered bound for the loss arising from the transactions with Isaiah Davenport. The evidence conclusively showing that no demand had ever been made on him, and the conduct of the plaintiff being wholly irreconcileable any responsibility from him.
^Mechanics16 Bank, 1 Pet. 46.
2. Because thé various acts of the Bank in demanding payment of the bill of exchange, drawn on Richard Irvine, in New York, and the suit instituted against Isaiah Davenport in Savannah, amount to such a ratification and adoption by the principal of the act of the agent, as in law would, exonerate the agent from liability.
A. G. M1 Graih and Memminger, for the motions.
Petigru, contra.

Opinion:
WaRblaw, 3.
delivered the opinion of the Court.
I would on the circuit have been satisfied with verdicts for the defendants. I felt a prejudice against dealings carried on by a single individual, under the name of a corporate body. I could see no motive for W. J. Yincent to favor Davenport to the injury of his employer ; and I thought that the delay of all complaint until Yincent was dead, with the various circumstances from which might be inferred the knowledge and approval by John G. Winter, or his acknowledged agents, of Yincent's acts in the transaction now complained of, might well be considered to sustain the testimony of William Yincent, which to me seemed to be candid and credible. But of all these matters the jury were the proper judges; and in support of their verdict, it may be observed that in the letters of the 26th and 27 May, there are expressions, not contained in the report, which are hardly recon-cileable with the notion that before writing these letters Yin-cent had received from Winter directions to discount the bill of Davenport, not accompanied by evidence of an actual consignment upon which it was drawn, or that the bill of 2,500 had been discounted before payment of the four checks.
The payment of overdrafts by a cashier appointed to keep money and pay it to the checks of persons entitled to draw, *s' w^out some special excuse, a violation of duty.
Winter seems to have entertained great horror of any overdraft, and to have given to Yincent repeated cautions concerning Davenport, and Irvine's engagement to accept only bills drawn on actual consignments; notwithstanding these matters let it be admitted that the bill of $2,500 might, (if there was reason to believe that funds to meet it were in Irvine's hands,) have been properly discounted, as one which was intended to cover previous short drafts, although attended by no colemporaneous Consignment, and that the checks of Davenport, drawn in anticipation of a proper discount previously agreed upon, would not have been overdrafts ; the jury were instructed in conformity with these admissions, and yet have found that Yincent did pay Davenport's overdrafts. To this conclusion they were probably led by the consciousness of irregularity, which perhaps may be seen in the anxious and somewhat c ontradictory statements which Vincent made in the letters before mentioned, and in his omission to enter the check of $947,52 in the account which he kept of the transactions between the Bank and Davenport. By this finding, it is established that the circumstances which might have justified the discount of the bill did not exist, or that the payment of checks, (if made in anticipation,) was in anticipation of something which was not received : in effect that the bill of $2,500 was not in fact discounted, but was taken after payment of the checks, as a security for money which had been incautiously advanced.
Taking it for granted, then, that the verdict has established the payment by Vincent of overdrafts, in violation of his duty and without previous authority from Winter, this Court confines its attention to the question of subsequent satisfaction, which alone has been argued here.
Unquestionably an adoption of the acts of an agent, by a principal, after full knowledge of the facts, takes away from the principal all further right to complain of these acts. It has been seen and acknowledged that the general principles of law on this head were explained to the jury; that all questions concerning the plaintiff's knowledge and intention were left to them, and that with a favorable view of the various circumstances from which his adoption of his agents act's had been argued, it was submitted to them to decide whether there had been such adoption as affirmed these acts. But it has been here contended that there were' two transactions which so conclusively showed adoption and affirmation, that they should either have been ruled by the Court to be decisive, in favor of the defendant; or if loft to the jury ought necessarily to have been found so.
First. The suit in Savannah, wherein, upon the money counts in indebitatics assumpsit, the Bank of St. Mary's obtained judgment against Davenport for the amount of the four checks in question which were specified in the bill of particulars.
Against the effect of this, it was urged by the plaintiff that the suit was commenced and prosecuted by Vincent, without the knowledge of Winter; and the evidence shews no communication made to plaintiff's attorney by any person besides Vincent and Davenport. By his own act, whether obtaining a judgment in the name of his principal or any other act, an agent cannot discharge his liability; and the jury may have attained the conclusion that the obtaining of this judgment was the unauthorized act of Vincent.
But suppose that the knowledge and assent of Winter must be presumed; such a proceeding against Davenport is no necessary discharge of Vincent. Where an agent sells without authority, suit by the principal for the price, is an ac knowledgment of the validity of the sale. Where an agent buys without authority, a suit by the principal for the article bought, or other act asserting his title to it, is an acknowledgment of the validity of the contract of purchase. The principal cannot at the same time affirm and disaffirm. If he meant to disaffirm, he should, in the case of sale, have sued for the article improperly sold ; in the case of purchase he might have refused to interfere with the article, or in some suit have sought the recovery of his money, improperly laid out. But money paid under a void authority, and even money embezzled, may be recovered in indebitatus assump-sit. By suing in this form, the plaintiff waives the last and gives his assent to the contract for refunding, which the law will imply. This contract may, however, be wholly independent of some act of wrong or negligence in a third person. In this case the complaint of the plaintiff is in effect that his money has been lent by his agent without' sufficient security. By suing for the money lent the plaintiff acknowledged the validity of the loan, but made no admission as to the security. He is entitled to have the money refunded by Davenport. This he would have been entitled to, had Yincent been a mere depository who lent without authority, although in that case suing for the money lent, might have been a recognition of the loan, which would have discharged the depository's liability for lending. The agent's right in this case to lend being clear, a recognition of the loan, in a suit between the principal and the borrower, has no necessary tendency, in an inquiry between the agent and the principal, to shew the principal's approval of the security. If the plaintiff's action be well founded, his failure to collect after judgment against Davenport, only makes more plain the misconduct which he alleges against Yincent, and the loss which he has thereby sustained.
Second. The conduct of the plaintiff in receiving at New York the bill for $2,500, drawn by Davenport, as owner and holder thereof, claiming funds in Irvine's hands, and without complaint retaining the bill until this time.
So far as these matters constitute evidence upon the questions of fact, whether Winter with full knowledge did approve what Yincent had done, and whether Yincent has been in any way misled or injured by Winter's conduct, they have been considered by the jury. For the defendants, it was urged that the bill sent without bill of lading or other evidence of actual consignment, gave to the plaintiff immediate information that Yincent had departed from the previous course of dealing, and that Winter's long failure to complain, when he was in possession of all the letters, books apd papers of the Bank, shewed that he had no just ground of complaint which Yincent when living, could not explain. On the other hand the omission of the largest check in the account, and the erroneous impression thus produced by Vincent, werel dwelt upon, and it was shown that the letter of 27th May contained Vincent's direction for the plaintiff to take with the bill the course which was taken ; that this course was the one most likely to relieve Vincent from the liability he had incurred, and that by failing to use all probable means to obtain the money from Irvine, the plaintiff would have insured and discharged Vincent.
The verdict must be taken to have established that the bill was an insufficient security taken by Vincent to cover overdrafts already páid, and the question for this Court is whether the matters mentioned under this second head should necessarily have been held conclusive by either Court or jury.
By testing the value of the security which was taken, the plaintiff did not assent to its sufficiency, or acknowledge the propriety of its being taken. He was entitled to the use of all the securities which his agent took; if he was not wanting in diligence the agent has suffered nothing from his use of them. If the agent was liable for taking insufficient security, collection of part of the money by the principal would have been a relief to him pro tanto: entire failure to collect after effort made, leaves the loss of the principal and liability of the agent as they were before the effort made.
Regarding, then, the questions of fact which were submitted as decided against the defendants, this Court does not perceive that, in the matters which have been urged, there can be found a discharge of the agent, either as a conclusion of law, or as indisputable evidence of fact.
The motions are dismissed.
O'Neall, J. — Evans, J. — Frost, J. — and Withers, J.— concurred.
Motion refused.