I concur in the result in this case as set forth in Judge KETCHUM'S opinion, but am unable to agree to some of the rulings made therein.
I agree that the chancellor erred in holding that the petitioner did not originally deposit the $2,500 in the bank. *Page 399 This deposit created the relation of debtor and creditor between him and the bank. The fact that the bank did not credit the petitioner's account with this amount is, I think, immaterial and not controlling. That he did not formally draw a check against the deposit is also immaterial. A verbal order to a bank to pay a sum of money is no less binding than a written one in the form of a check. If Partee and his associates originally took the money without authority from the petitioner, the bank would nevertheless be discharged from its obligation of a debtor if the petitioner, having knowledge of the facts, thereafter expressly or impliedly ratified that transaction, which I think the weight of credible evidence shows that he did.
I am unable to agree to the ruling that Hurt's testimony quoting Jackson to the effect that petitioner told him that he had loaned the money to the Partee Insurance Agency, should not have been considered by the chancellor. It is true that this was hearsay evidence and upon seasonable objection would doubtless have been excluded; but there was no objection of any kind, and this being true, it was proper that it be considered for whatever it was worth. The applicable rule, as I understand it, is that except where its incompetency derives from some statutory provision, incompetent evidence, admitted without objection, must be considered by the trier of fact. It was so held in Erlich v. Fisher, 114 Tenn. 711, 88 S.W. 188, and we have followed that holding a number of times. Smith v. Fisher, 11 Tenn. App. 273, 286; General Outdoor Advertising Co. v. Coley, 23 Tenn. App. 292, 296, 131 S.W.2d 305; Ward v. Gulf M. N.R. Co.,23 Tenn. App. 533, 543, 134 S.W.2d 917. In these circumstances the fact that evidence is hearsay goes to its probative value, not to its competency.
I am also unable to agree to the conclusion that the *Page 400 weight of the evidence does not support the chancellor's finding that the petitioner loaned the money to the Partee Insurance Agency. I think the weight of the evidence shows that he either loaned it to that concern originally or thereafter agreed in substance and effect to look to it instead of the Bank for payment. In short, he agreed to substitute the Partee Insurance Agency for the Bank as his debtor. Any other conclusion is necessarily based upon the testimony of the petitioner. I am unable to give his testimony any credit. He is contradicted by disinterested witnesses on practically every controverted question of fact, to say nothing of his own oaths made in connection with the bankruptcy proceedings. If his testimony is true in this case, then he was guilty of perjury in two or three instances in the bankruptcy proceedings. He not only denies that he filed a claim against the bankruptcy estate and that he joined in any of the bankruptcy proceedings, but he denies that he had ever received a dividend from those estates. As Judge KETCHUM points out, it is conclusively shown by record evidence that these denials are absolutely false.
In the same connection it is worthy of note that the petitioner received in the form of dividends from the bankrupt estate several hundred dollars. This sum he has neither returned nor offered to return. If his testimony in the present case is correct, there is no theory under which he was entitled to receive any amount from those estates. The only possible conclusion in that event is that he received it through practices involving fraud and perjury. The fact that he neither returned nor offered to return the amounts received from the bankruptcy court, considered with the other circumstances, is, in my opinion, an implied ratification of the transactions involved.
Should relief be granted in this case, petitioner would derive a wholly unwarranted benefit; for he would not *Page 401 only have recovery from the Bank and the FDIC for the full amount of his deposit, but in addition he would be ahead the several hundred dollars he received from the bankruptcy court, solely upon the theory that he had loaned to the Partee Insurance Agency the very money for which a recovery had been allowed against the Bank. In my view there is nothing in the record to warrant such an anomalous result.
But if it be true that Partee and his associates perpetrated a fraud upon the petitioner in originally taking his money without his consent, yet I think that can avail him nothing under the facts of this case. One upon whom a fraud has been practiced has the sole option of whether he will be bound by it. If, with a knowledge of the fraud, he acquiesce therein or do any act importing an intention to stand by it, he cannot afterward avoid it, for the deceit then becomes an agreed fact of the case. It has been so held a number of times. Among the cases are Kuckolls v. Lea, 10 Humph., 577; Gilbert v. Hunnewell, 12 Heisk., 289; Johnson v. Lellyett, 12 Heisk., 723.
It would be a different case if the petitioner's position in the bankruptcy proceedings had been due to ignorance or mistake, but no such claim is made. As stated, the petitioner simply denies that he had participated in the bankruptcy proceedings in any capacity, notwithstanding the conclusive evidence to the contrary.
However, all other questions aside, I agree with Judge KETCHUM that the doctrine of judicial estoppel as distinguished from equitable estoppel, is an absolute bar to the granting of any relief to the petitioner in this case. It is significant to note that nowhere in the petitioner's brief does he undertake to combat this proposition. The brief is confined wholly to equitable estoppel, which is quite a different thing, as has been pointed out in numerous *Page 402 cases by the Supreme Court. Sartain v. Dixie Coal Iron Co.,150 Tenn. 633, 266 S.W. 313, and cases cited.
The distinctions between the two doctrines arise out of the fact that whereas equitable estoppel is mainly concerned with the private rights of individuals and operates primarily upon them, judicial estoppel is based on public policy and is primarily concerned with the public interest, the rights of individuals being wholly subordinate and incidental thereto. It not infrequently happens that as an incidental consequence of the application of the latter doctrine an individual derives benefit that he would not otherwise be entitled to, yet that alone has never been thought to prevent its application. The reason is that the public interest is considered paramount, that is, that it is thought to be more important that such interest be subserved than it is that an individual be denied an undeserved benefit resulting incidentally from the application of the doctrine. It is considered that the latter is a less evil than that which would follow in the long run from allowing a man to swear one thing in one judicial proceeding and directly the opposite in another without any explanation of the inconsistency. The doctrine derives from the sanctity of an oath, the preservation of which has in this jurisdiction been considered of first importance. Black Diamond Collieries v. Deal, 150 Tenn. 474, 265 S.W. 541; Stamper v. Venable, 117 Tenn. 557, 561, 97 S.W. 812.
So it seems clear to me that if the essential basis of the petitioner's position in the bankruptcy proceedings, to-wit, that he had loaned the money to the Partee Insurance Agency and that the individuals composing that concern were his debtors, was in reality false in that he had not made or ratified the loan to them as he now claims, yet he would be estopped on the ground of public policy from *Page 403 profiting as he seeks to do by asserting the truth. Cf: Williams v. Nottingham, 19 Tenn. App. 162, 84 S.W.2d 114.
It is of course vital to the application of the doctrine that the prior position was not taken through inadvertence or mistake. Here, there is no such claim. Upon the contrary, as before stated, the petitioner simply denies that he had filed a claim in any of the bankruptcy proceedings or in any way participated therein, notwithstanding the conclusive evidence to the contrary.