BANKING BUSINESS-Continued.
to exercise ordinary care and diligence in keeping the bonds; and (4) that
the measure of damage was the value of the bonds when stolen and not
when demand of them was made. Third Nat. Bank of Baltimore v. Boyd,
545.
9. When National banks are not liable for representations of officer.] Selling
railroad bonds upon commission is not within the scope of the corporate
powers of a National bank; and therefore no action lies against such cor-
poration for false representations made by its teller to induce the plaintiff
to buy bonds. Weckler v. The First Nat. Bank of Hagerstown, 533.
10. Deposits in, as a collateral security for the performance of agreements be-
tween third parties Ultra vires when no defense.] A National bank in-
dorsed upon a contract of sale and delivery between A and B, that B had
deposited $2,500 in the bank," to be held by us as collateral security for
the faithful fulfillment of the within contract." Held, (1) that the bank had
the power to receive the deposit and enter into the said contract; (2) but
that, even if the contract was ultra vires, the bank would be estopped from
setting up that defense in an action by A, as he had performed his part of
the agreement, relying on the undertaking of the bank. Bushnell v.
Chautauqua Nat. Bank, 794.
11. Accommodation notes.] It is no defense to an action by a National bank on
a note discounted by it that the defendant made it for the benefit of the
payee, and the payee agreed to pay it at maturity, and that the bank had
knowledge of these facts. Thatcher v. West River Nat. Bank, 622.
12. "Office or banking-house.”] The provision of the National Banking Act
requiring National banks to transact their " usual business" at an office
or banking-house in the place specified in their organization certificates
does not prevent the purchase of coin by one bank at the banking-house
of another bank. Merchants' Nat. Bank v. State Nat. Bank, 47.
See ACCEPTANCE, 600; DEPOSITS FOR SAFE-KEEPING.
Taxation of.] See TAXATION, 629.
National banks not subject to.] National banks are not subject to the Bankrupt
Act, and bankruptcy courts have no jurisdiction as against such associa-
tions. If insolvent they can be wound up only in the mode provided by
the National Banking Act. In re Manufacturers' Nat. Bank, 192.
Right of assignee to recover illegal interest paid by bankrupt.] See INTEREST,
317.
See BANKING BUSINESS; CHECKS; PROMISSORY NOTES; SURETIES, 811.
1. Sureties on official bond of cashier released by negligence of directors.] De-
fendants became sureties on the official bond of a bank cashier, being
induced so to do by a statement published by the directors, according to
law, whereby the affairs of the bank appeared to be well managed. The
cashier of the bank was a defaulter when the statement was published,
of which fact the directors, by the use of slight care, might have learned.
In an action on the bond for subsequent embezzlements, held, that the
sureties were not liable; they had a right to believe that, before publish-
ing the statement, the directors had used reasonable diligence in ascer-
taining the condition of the bank, and, being misled by the statement,
were not bound. Graves v. The Lebanon Nat. Bank, 492.
2. Presumption as to date of instrument.] A bond was dated the
1869. Held, that the legal presumption was that it did not become
binding on the obligors until the last day of that year. Ib.
3. Acceptance of bond.] It is not essential that National banks shall signify
their acceptance of the official bonds of their officers in writing. Ib.
4. Liabilities of sureties on cashier's bond.] A surety on the bond of the cashier
of a National bank is not discharged by the fact that the cashier had,
before the bond was given, committed frauds upon the bank, if such
frauds were unknown to the officers of the bank, although they were
guilty of gross negligence in not discovering them. Tapley v. Martin, 611,
and note,
614.
-.] In an action by a surety on the bond of an officer of a bank to recover
an amount paid on the bond without suit, against one who had agreed
to save him harmless from all loss which he might suffer as surety,
the court instructed the jury that if the plaintiff made the payment with-
out the assent of the defendant, he must show that he was legally liable,
but if he procured the assent in good faith, he could recover. Held, that
the defendant had no ground of exception. Ib.
Deposited by bank to secure circulation
courts cannot control.] See JURIS-
By-laws prohibiting the transfer of stock by any stockholder who is indebted
Bullard v. Bank, 93; Bank v. Lanier, 70.
1. Power to certify checks.] The cashier of a National bank may, without
special authority, certify checks; but the directors may limit the exercise
of this power. Such limitation will not, however, affect one ignorant of
it and dealing with the cashier in the usual course of business. Merchants,
Nat. Bank v. State Nat. Bank, 47, and note, 61.
2. As to the powers and duties of cashiers, see note, 61.
3. Lists of shareholders.] A State statute requiring cashiers of National banks
to send, annually, lists of shareholders and the amount of their shares to
the town clerks, is valid, and a cashier is liable to the penalty imposed
for a failure to comply with the law. Waite v. Dowley, 137.
Authority of, to take special deposits.] See DEPOSITS FOR SAFE-KEEPING.
Official bond of.] See BOND.
1. Right of National bank to take chattel mortgage.] A National bank has a
right to take a chattel mortgage for the purpose of securing a previ-
ously contracted debt, and to enforce the same, Spafford v. First Nat.
Bank of Tama City, 486.
-.] National banks may take chattels as security for loans and discounts
Pittsburgh, etc., v. State Nat. Bank, 315.
1. Certification of checks by National banks.] National banks have the power
to certify checks, and this power may be exercised by the cashier with-
out special authorization. The directors may limit his exercise of this
power as they may deem proper, but such limitation will not affect a per-
son ignorant thereof who deals with the cashier in relation to matters ap-
parently within the scope of his power. Merchants' Nat. Bank v. State.
Nat. Bank, 47, and note, 61.
2. Power of cashier - question for jury.]
Whether or not a cashier has
power to certify checks in a given case is a question for the jury. lb.
3. Effect of certification of check.] A certificate of a bank that a check is
good is equivalent to an acceptance; it implies that the check is drawn
upon sufficient funds in the hands of the drawee, that they have been set
apart for its satisfaction, and that they shall be so applied whenever the
check is presented for payment. Ib.
4. When bank liable on.] A National bank is liable to the holder in good
faith of a check certified by the cashier, although the drawer had no
funds in the bank when the check was certified. Cooke v. State Nat.
Bank, 698.
5. Acceptance of checks by National banks — parol acceptance.] The act of
Congress March 3d, 1869 (R. S., § 5208) making it unlawful for National
banks to certify checks unless the drawer has at the time an amount of
funds on deposit equal to the amount specified in the check, does not in-
validate an oral acceptance of a check or promise to pay a check, there
being at the time sufficient funds of the drawer in possession to meet it.
First Nat. Bank v. Merchants' Nat. Bank, 915.
6.] A check drawn on a National bank was presented for acceptance,
whereupon the bank promised to pay it as soon as it received information
that a certain draft left with it for collection was paid. The draft was
paid and the bank informed. Held, that the acceptance was good and
binding on the bank. 1b.
7. National banks may buy checks.] A National bank has authority to buy
checks of individuals on other banks, whether payable to bearer or to
order. First Nat. Bank of Rochester v. Harris, 590.
8. Delay in presenting check for payment.] A check drawn in Boston on a
bank in Boston was sent by mail to Rochester, N. Y., and there bought by
a National bank four days after its date, and two days after was presented
for payment. Held, that there was no unreasonable delay, and that the
buyer was not subject to equities existing between the original parties. Ib.
Right of revenue collector to examine.] See EXAMINATION, 154.
1. Congress may lawfully tax the circulation of State banks used for currency
or paid out by State or National banks. Veazie Bank v. Fenno, 22.
2. Congress may restrain the circulation of notes issued by State banks. Ib.
3. National bank bills are United States currency."] The notes or bills
issued by the National banks of the United States, which are authorized
by law to circulate throughout the Union as a medium of trade, are
included in the phrase," United States currency." Larceny of such notes
is, therefore, larceny of United States currency. State v. Gasting, 508.
4. Taxation of circulation.] The circulating notes and
may be taxed by the State.
contra, Horne v. Green, 643.
bills of National banks
Ruffin v. Board, 806;
1. A National bank is a foreign corporation under a statute requiring cor
porations created by " the laws of any other State or country," to give
security for costs. Nat. Park Bank v. Gunst, 797, and note.
2. As to removal of causes.] National banks are citizens of the State where
located within the meaning of the statutes relating to removal of causes.
Davis v. Cook, 656; Cooke v. State Nat. Bank, 698; Chatham Nat. Bank v.
Merchants' Nat. Bank, 769.
1. National banks may take personal chattels as security for loans and discounts.
Pittsburgh, etc., v. State Nat. Bank, 315.
2. National banks can make loans on security of their own stocks only to pre-
vent loss on debts previously contracted. Bank v. Lanier, 70.
3. A National bank may take bonds and stocks as security for existing or future
loans and is liable for only ordinary care in preserving such security
Third Nat. Bank v. Boyd, 545.
COLLATERAL SECURITY- Continued.
4. National banks may lend money upon the personal obligation of the bor-
rower secured by a pledge of stock of a corporation as collateral security.
Shoemaker v. Nat. Mechanics' Bank, 169; Canfield v. State Nat. Bank, 312.
When one holding shares in National banks as collateral security is liable to
creditors.] See STOCKHOLDER, 406, 471, 554.
COMPROMISE.
See JURISDICTION, 181.
1. Determination of, as to proceedings against stockholders.] It is the duty of the
Comptroller of the Currency to determine when proceedings shall be taken
against stockholders to enforce their liability and to what extent such lia-
bility shall be enforced, and such prior determination must be alleged and
proved in an action to enforce such liability. Kennedy v. Gibson, 17.
2.] The determination of the Comptroller of the Currency as to when and to
what extent the individual liability of stockholders shall be conferred, is
conclusive. Kennedy v. Gibson, 17; Casey v. Galli, 142; Bailey v. Sawyer,
356.
1. Right of Congress to tax circulation of State banks.] The tax of ten per cent
imposed by the act of July 13, 1866 (14 Stat. at Large, 146, § 9) on the cir-
culation of State banks used for currency and paid out by the National or
State banks is not repugnant to the Constitution, either on the ground
that the tax is a direct tax, which must be apportioned among the sev-
eral States, or that the act impairs franchises granted by the State.
Veazie Bank v. Fenno, 22.
2. Restraint of circulation of notes of State banks.] Congress, having undertaken,
in the exercise of undisputed constitutional power, to provide a currency
for the whole country, may constitutionally secure the benefit of it to
the people by appropriate legislation, and to that end may restrain, by
suitable enactments, the circulation of any notes not issued under its own
authority. Ib.
3.] Semble, that Congress has no constitutional right to deprive State courts
of jurisdiction of actions against National banks located in other States.
Cooke v. State Nat. Bank, 698.
1. Of State bank into National bank — right of State to exact bonus.] A State
bank was by its charter required to pay the State a tax or bonus on its
capital paid in. A statute afterward authorized State banks to reorganize
as National banks, provided that all sums required by their charters to
be paid to the State continued to be paid as theretofore. Held, that a State
bank had the right to surrender its charter, and by so doing discharged
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