assistants. But the public are not supposed to know the functions of those various officers in the bank. It is the business of the receiving teller to receive all the deposits at the bank, in subordination, of course, to the cashier. Therefore the bank is liable for the teller's receipt of packages for safekeeping, where no order has been given to the contrary. He is also charged with the duty of receiving notes and drafts for collection, as a general rule; and it has been held that the bank was responsible for a note left with the paying teller for collection, although it was indorsed by a general indorsement; and the bank is also liable for a collection left with the assistant receiving teller who was temporarily acting. The paying teller is the proper officer to make payments over the counter for checks drawn upon the bank. He is the proper officer to whom to apply as to the genuineness of a certificate upon a check; but if he fails to state that a check has been stopped to one who merely inquires as to the genuineness of the signature, the bank is not bound by his failure. The note teller of the bank cannot erase a name of a maker on a note so as to bind the bank. It would seem to follow as a general principle that an act of alteration made by any officer of a bank, who had not the power to make the alteration, would be an act of spoliation by a stranger. A paying teller, or any other officer of a bank, cannot bind his bank by an act unlawful and unauthorized, unless the act be a tort. A paying teller has no authority to certify a check where the drawer of the check has not sufficient funds to meet it, although he has general authority to certify

1 See the next case.

2 Pattison v. Syracuse Bank, 1 Hun, 606. Compare, however, Lloyd v. West Branch Bank, 15 Pa. 172.

3 City Nat. Bank v. Mastin, 70 Tex. 643.

Daly, 476. The lower court made the correct decision. The bank was afterward held liable on the ground of negligence. See Clews v. Bank, 105 N. Y. 398, 114 N. Y. 70. The court reversed itself, but would not

4 Hotchkiss v. Artisans' Bank, 2 admit it. Keyes, 564.

5 Clews v. New York Banking Ass'n, 89 N. Y. 418, reversing 8

6 Marine Bank v. Terry, 40 Ill. 255. 7 Clark v. Metropolitan Bank, 3 Duer, 241.

8

checks; and it seems that the paying teller binds the bank, where a check is left with him for collection upon a depositor, where the paying teller agreed that he would cause the check to be paid during the day if the depositor should have sufficient funds during the day in the bank. But the paying teller has no authority to receive deposits, and where he takes a deposit, but embezzles it, the bank is not liable; 10 nor is the bank liable where the book-keeper takes a deposit, and enters it upon the customer's pass-book and in the ledger, but in no other place."

§ 103. Place of acting.- Every bank has a well-known place of business, and, as a general rule, any act done by an agent, unless specially authorized or ratified by the bank, away from the place of business, ought not to be binding upon the bank. But there are exceptional cases, such as that of a cashier going to another bank to buy gold,2 or going to another place to settle business of the bank. The bank

8Clarke Nat. Bank v. Albion Bank, 52 Barb. 592. It would have been good if the holder was a bona fide holder. Farmers' Bank v. Butchers' Bank, 16 N. Y. 125. But the form of the check was notice in the former case.

ferent officers; but suppose an ignorant man knowing nothing of banks should come into a bank with a

check or draft to collect and should go up to a window and hand his check or draft to the wrong clerk, who should tell him to indorse it to

9 Washington Nat. Bank v. Aver- himself, the bank would be liable for ell, 2 App. D. C. 470.

10 Thatcher v. State Bank, 5 Sandf. 121. This case cannot be justified on principle. See the next note. Compare City Nat. Bank v. Mastin, 70 Tex. 643. This latter case states the sound reason why the bank should be held.

11 Manhattan Co. v. Lydig, 4 Johns. 377. Although Chancellor Kent was one of the concurring judges, this case as well as the latter seems open to objection. Of course it may be said a man dealing with a bank is bound to know the powers of its dif

the clerk's action. See note 3, supra. But if it were money or something else for deposit these cases say the bank would not be liable. It is right that the bank should be liable, because it impliedly represents its employees to be something better than mere confidence men. See the last note.

1 Sandy River Bank v. Merchants' Bank, 1 Biss. 146. The general rule is stated in Merchants' Bank v. Rudolf, 5 Neb. 527.

2 Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604.

has been held for an indorsement or an admission made by the cashier upon the street, and other cases exceptional in their nature are likely to happen," such as torts.

§ 104. Surrendering the bank's rights. There are certain cases which use language to the effect that the officers of the bank have not the right to surrender the rights of the bank on a note by statements made at the making of it. But this statement is inaccurate. In a leading case where the language is used, the judge deciding the case did not understand the point he was deciding. The case was one where the officers of a bank represented to an indorser or agreed with the indorser that the indorser would not be liable. The real point was that the party was seeking to contradict the effect of the written document by parol evidence. But other courts have followed this deliverance,2 and it is possible that courts may go on repeating it. The rule as to parol evidence to vary a written contract is that it is not admissible except in cases of fraud or mistake. But a representation by a bank officer that a person indorsing a note would not be liable on it is, of course, not a fraudulent representation, or a representation of a fact at all, or a representation upon which the indorser had a right to rely. Yet if at the time the indorse

3 Bissell v. First Nat. Bank, 69 Pa. other party had no right to rely upon such an agreement. That is

415.

4 Kingston v. First Nat. Bank, 26 true. But the theory of the law is Wis. 663. that the note cannot be varied by

5 Pendleton v. Bank of Kentucky, such evidence. Other cases say 1 T. B. Mon. 171.

1 Bank of U. S. v. Dunn, 6 Pet. 51, by Justice McLean. He did not repeat this statement in Bank of Metropolis v. Jones, 8 Pet. 12.

2 Loomis v. Fay, 24 Vt. 240. This case advances the theory that such an agreement would be a fraud on the bank. That is no reason for not holding the bank liable. It is liable for many acts of its agents that are a fraud upon it. Other cases put forward the theory that the

that the act was beyond the scope of the officer's duty, but that is simply petitio principii. Suppose a benefit was granted to the bank for such an agreement. The other cases which follow Bank of U. S. v. Dunn are Whitehall Bank v. Tisdale, 18 Hun, 151; Mapes v. Second Nat. Bank, 80 Pa. 163; and see Comp. v. Carlisle Bank, 94 Pa. 409, which was clearly a case under parol evidence rule.

ment is given an actual fraudulent representation is made by an officer of the bank who has the power to act in regard to the note, the bank will be responsible for the fraudulent representation. This is the general rule now fully established, that a corporate officer perpetrating a tort in the performance of the business of the corporation which he is qualified to perform renders the corporation liable.1

§ 105. Special course of dealing.- Although the apparent scope of the authority of bank officers is as stated in the preceding section, that apparent authority may be greater owing to the fact that the governing authority in the corporation has permitted to the particular officer an apparent authority greater than he would otherwise enjoy. The corporation is bound by the action of its governing body. That governing body permits an agent to assume greater power than he is entitled to enjoy. From such conduct an agency by estoppel arises.1 On principle it makes no difference whether the agent's acts are authorized by the special charter or articles of agreement, or are contrary thereto; the corporation is bound as to third parties, just as the principał would be bound who defined his agent's authority in a written document and then knowingly permitted him to ex

3 First Nat. Bank v. Pegram, 118 N. C. 671. This case must decide that the cashier had power to make the representation, for it is not conceivable that the court would knowingly permit a wrong judgment to stand. Grant v. Cropsey, 8 Neb. 205. This last case is questionable as an authority. If the bank receives a benefit, the bank will be bound even though the officer's act was a fraud. But the making of the contract is, as a matter of consideration, the reception of a benefit by the bank. See Manhattan Life Ins. Co. v. Farmers' Bank, 10 Blatch. 344.

See, for the principle, Pahqui

oque Bank v. First Nat. Bank, 36 Conn. 325. See the preface to Cook on Corporations. It is not necessary here to recapitulate the authorities upon this question. Of course, to make the corporation responsible for punitive damages, the corporation must have authorized or ratified the tort. Lake Shore Ry. Co. v. Prentice, 147 U. S. 101. But other authorities are contra. See note 11 to § 96, supra.

1 This form of agency is a matter of common application in the law of principal and agent. See Bronson's Executor v. Chappell, 12 Wall. 681; Johnson v. Hurley, 115 Mo. 513.

ercise a greater authority. A corporation, by a course of dealing, can commit the whole corporate authority to one particular officer. The limitation is that the officer be not forbidden, by an express general statute or rule of law, from exercising the particular authority. So it is held that the directors of a bank, by allowing its cashier to exercise the whole corporate authority, make the bank responsible for the acts of the cashier beyond the scope of his usual authority in other banks. But in order to bind the bank, where an officer acts outside the usual scope of his authority, the bank must be a party to the circumstances, or chargeable in some way with knowledge. Since such action is by the implied authority of the board of directors, it follows that the bank is bound, where it receives a benefit, whether the act is contrary or not to the special charter or to the articles of agreement. The same result ought to follow as to any

2 See note 9 to § 120, post, and note 3 following this note. By the rule laid down in § 33, ante, the bank receiving a benefit would be held to be bound, except where the transaction was forbidden by a positive rule of law or a statute, and was not purely ultra vires. That is the doctrine of the Supreme Court of the United States, and yet it is not.

3 If he is, no estoppel arises. Burrows v. Niblack, 84 Fed. R. 111, semble; and Kennedy v. California Bank, 167 U. S. 362, applies the principle to a purchase merely beyond the corporate power. But the latter case is wrong on that point. See § 33, ante, and s. C., 101 Cal. 495. 4 Pattison v. Syracuse Nat. Bank, 80 N. Y. 82; Davenport v. Stone, 104 Mich. 521, rediscounting by cashier; City Nat. Bank v. National Park Bank, 32 Hun, 105, borrowing money by president and fraudulent representations binding on the

bank, because the president was permitted to absorb all the corporate power. See also Cox v. Robinson, 82 Fed. R. 277; Armstrong v. Cache Valley Co., 48 Pac. R. 690; National Bank v. First Nat. Bank, 79 Fed. R. 961; Carpey v. Dowell, 115 Cal. 677.

5 Wheat v. Bank of Louisville, 5 S. W. R. 305. Compare Robinson v. Bealle, 20 Ga. 575. But if the facts are on the books of the bank, knowledge of the directors is presumed. Bank of Carlisle v. Fleming, 44 S. W. R. 961.

6 Hagerstown Bank v. Loudon Sav. Soc., 3 Grant Cas. 135. This idea seems to contradict the proposition that every man dealing with a corporation is bound to know the authority of its agents as defined in the articles of agreement or charter. But the two things may be reconciled by the consideration that the representation has prevented the ascertainment of the