Court Opinion

ID: 3894085
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:25:18.931412+00
Date Added: 2024-06-11T07:45:51.373903
License: Public Domain

I concur in the result reached in the above opinion, and in all the argumentation that is necessary in the disposition of the cause; but the grounds of concurrence are stated in order to put on record the fact that I do not agree to the soundness of Gallway v. Mathew, 10 East, 264, and the fact that the court is not committed as to what would be the true rule applicable in a case where, after the protest of Hoover, the bank had honored a check creating an overdraft and the proceeds had been applied by Mason on debts of the firm, already in existence to the payment of which Hoover was at the time irrevocably bound. No implication of such committal of the court is to be drawn for the reason that we are all of opinion that the burden is upon complainant bank to show that such debts were paid, and the burden is not carried further than is indicated by the opinion of the Chief Justice. We have, therefore, no such case to decide.
My view is that, when such a case arises, the protesting partner should be held to respond under the doctrine of implied ratification. The true doctrine, as I conceive, lies midway between the rule inGallway v. Mathew, and the doctrine declared by the Georgia and North Carolina courts, if indeed Gallway v. Mathew can be construed to treat of or disregard the doctrine of implied ratification in such circumstances. *Page 672 
It does not do so in terms; and since its date (1808) many rules of the common law have so far been affected by the ameliorating influence of equitable principles that it is well to pause and ask: Would Lord Ellenborough have pronounced the judgment he did, had that influence been more fully operative in his day?
It is entirely logical to hold, as was held in that and many later cases, that upon the lodgment of the protest the implied agency of Mason ceased. But, notwithstanding, there may be a ratification on Hoover's part raised by the law out of the after-occurring facts touching the use of the funds.
I do not think this implication should be raised where the money so advanced by a third person, whether upon a note, bill of exchange, or check, is used in a way that augments, or tends to increase, the hazard of the protesting partner. For example, where goods are purchased and received into the firm's stock of merchandise over one partner's protest, there should be no implication of ratification by him, since, with the benefit accruing in the pro tanto swelling of the firm's assets, there would be a concomitant hazard — that of an over-stocking which may bring or tend to bring the firm into difficulties which the protesting partner had a right to hedge against. It seems that the doctrine of ratification is carried too far by the Georgia and North Carolina courts in such a case.
But what can be said against that doctrine when limited to cases where there is no semblance of an *Page 673 
increase of the burden or risk of the protesting partner? If Mason had used the proceeds of the overdraft to pay a debt of the firm to one who at the time could have pursued Hoover, the protesting partner, how was the latter injured. Assume that the overdraft was used to pay a judgment which was a lien on the firm's property; can it be conceived that Hoover did not take a benefit without any incidental burden or hazard? It would be grossly inequitable for him to retain that benefit without having imposed on him by law a ratification; cancellation of precedent agency authority in Mason being fully granted. Hoover's real status would not be changed; no sort of detriment to him would be worked, and substance would be lacking in any defense he might urge.
Hoover is held to respond to the bank; for so much of the overdraft as is represented by the firm's checks to him honored by it, or to the extent he participated as an individual in the benefits of the overdrafts, on this principle, albeit denominated an "estoppel." By parity of reasoning he should be held to answer to the extent of existing debts, which at the time were binding upon him, if satisfied by the overdrafts.
Since the proof only shows, in a general way, that the moneys or credits obtained by the overdrafts were used in the ordinary run of the firm's business, and does not affirmatively show that debts already created were discharged thereby, the bank must fail of recovery further than is stated in the opinion of the Chief Justice.
MR. JUSTICE FENTRESS, J., joins in this opinion.
 *Page 278