Kelsey v. National Bank of Crawford Co.

The opinion of the court was delivered, October 30th 1871, by

Williams, J.

It is not necessary to decide whether the cashier ex officio had authority to offer the reward in question for the detection of the thieves that robbed the bank. If he had no authority, the bank is liable for the reward if the offer was acquiesced in and ratified by the directors. The law is well settled, that a principal who neglects promptly to disavow an act of his agent, by which the latter has transcended his authority, makes the act his own: Bredin v. Dubarry, 14 S. & R. 30; and the maxim which makes ratification equivalent to a precedent authority, is as much predicable of ratification by a corporation as it is of ratification by any other principal, and it is equally to be presumed from the absence of dissent: Gordon v. Preston, 1 Watts 387.

It was accordingly held in The Bank of Pennsylvania v. Reed, 1 W. & S. 101, that though the authority of the cashier does not extend so far as to justify him in altering the nature of the debt due the bank, or in changing the relation of the bank from that of a creditor to that of an agent of its debtor, yet a subsequent acquiescence of the bank in such an exercise of power would be conclusive upon it. In delivering the opinion of the court, Rogers, J., said: “It is a very clear and salutary rule in relation to agencies, that when the principal, with the knowledge of all the facts, adopts or acquiesces in the acts done under an assumed agency, he cannot be heard afterwards to impeach them, under the pretence that they were done without authority, or even contrary to instructions: Omnis ratihabitio mandato cequiparatw. When the principal has been informed of what has been done, he must dissent and give notice of it in a reasonable time; and if he does not, his assent and ratification will be presumed. If then the directors of the bank were informed that the cashier had offered the reward, it was their duty promptly to disavow the act, if they did not intend that the bank should be bound by it. If they had notice of the offer and did not dissent from it, their assent and ratification must be presumed. Nor was it necessary, in order to bind the bank by their acquiescence, that notice should have been given to the directors, when sitting in their official capacity as a Board. If they were personally cognisant of the offer made by the cashier, it was their duty to call a meeting of the board and disavow the act, if they were unwilling that the bank should be bound by it. It would be unjust to permit the plaintiff to spend his time and money for the detection of the thief, on the faith of the promised reward, and then to repudiate the offer, as unauthorized, when he had succeeded in apprehending the thief and restoring to the bank the stolen securities found on his person. The question of the bank’s liability for the reward turns on the fact of notice and acquiescence. If the evidence, tending to show that the directors had notice of the offer and that they acquiesced m it, was sufficient to establish the fact, if believed, the case should have been permitted to go to the jury. We think that the evidence was sufficient, and that it should not have been withheld from them.

It tended directly to show that the cashier offered the reward at the instance of one of the directors, and upon his suggestion that “the directors would bear him out in it,” and that the offer was made in the presence of three of the directors; and that the plaintiff “ separately met all the directors and talked the matter over with them,” with the exception of William Davis, Jr. If so, can there be any doubt that the evidence showing the directors’ knowledge of the offer was sufficient to go to the jury ? In a town like Meadville it could hardly have happened that the bank should have been robbed of so large an amount, and that a reward should have been offered by the cashier for the detection of the thief, and telegraphed to the police headquarters at Cleveland, Erie and Pittsburg, without the .fact being known to almost the entire community. And if so, the directors must have been informed of it. But whether so or not, the evidence touching the question was amply sufficient to go to the jury.

But it is contended that the action will not lie, because it was brought against the wrong corporation. It was the State Bank that was robbed and offered the reward, and the National Bank is the coi’poration sued. But under the provisions of the Act of the 22d August 1864, P. L. 977, “ enabling the banks of this Commonwealth to become associations for the purpose of banking, under the- laws of the United States,” upon the surrender of its charter all the assets of the State Bank were immediately, by act of law, without any conveyance or transfer, vested in the National Bank, and all its liabilities and obligations were devolved upon it. Why then should not the remedy for the liabilities incurred by the former be by action against the latter ? It was admitted on the argument that the National Bank is bound to discharge and satisfy all the obligations and liabilities of the State Bank, but it was insisted that under the proviso of the enabling act, continuing the State Bank a body corporate for the term of three years after the surrender of its charter, for the purpose of prosecuting and defending suits by and against it, that suits to enforce the payment of its obligations and liabilities must be brought against the State, and not against the National, Bank. Undoubtedly an action will lie against the State Bank for any of its liabilities, if brought within the time limited in the proviso; but it does not follow that it will not lie, if brought against the National Bank. Why compel the plaintiff to bring an action against the State Bank when it has no assets to meet and satisfy the demand ? Why not avoid circuity of action by bringing suit in the first instance against the corporation invested by act of law with all the assets, and made responsible for all the engagements of the State Bank. Why bring two suits when one will suffice ? We discover no provision in the act, making it the duty of the plaintiff to proceed in the first instance against the State Bank, and are of the opinion that the action is rightly brought against the National Bank.

But it is objected that the declaration is defective in not setting out the facts, with the necessary averments, on which the liability of the corporation sued arises. And for this reason it is urged that the nonsuit was properly entered. It is admitted that the declaration is defective, but this objection was not made in the court below as one of the grounds for the nonsuit. If it had been, the plaintiff might have amended his declaration, and therefore we will allow him to amend nunc fro tunc, and treat the case as if the amendment had been made in the court below when the motion for the nonsuit was entered.

It follows from what we have said that the plaintiff is entitled to recover if the directors had notice of the offer, and did not promptly disavow it.

Judgment reversed, and a procedendo awarded.