thorized so to do by the rules and usages of the business,25 or in payment of the bank's claim, when he may do all acts required to complete the payment; 26 he has no power to make purchases for the bank not in the line of acquiring bankable securities; 27 he has no power to assign the bank's property unless it be in the usual course of business.28 It was held in one case that he had no power to pledge the assets of the bank to secure an antecedent debt," and in another that he had no power to make acceptances at all; 30 certainly he has no power to make accommodation acceptances,31 except of course to a bona fide holder; he has no general power to receive special deposit of papers. It was held in one case that he had no power to make an answer to a garnishment. He cannot bind the bank by signing its name to an indemnity bond given upon an execution in the bank's favor; 34 nor has he power to bind his bank to defend a suit for a correspondent, where the correspondent is sued for negligence in collecting. But this prima facie power or lack of power is capable of variation by the course of dealing in a bank, as we shall hereafter see.36 291; Cocheco Nat. Bank v. Harkel, 51 N. H. 116; Hodge v. First Nat. Bank, 22 Grat. 51. 25 Ryan v. Dunlap, 17 Ill. 40. 26 Matthews v. Massachusetts Nat. Bank, Fed. Cas. No. 9286. 27 Lionberger v. Maxer, 12 Mo. App. 575; North Star Co. v. Stebbins, 2 S. Dak. 74. Contra, Crystal Plate Glass Co. v. First Nat. Bank, 6 Mont. 303, semble. The purchase was for a third party, and hence the case is wrong because the cashier had no such power. 28 Hartford Bank v. Barry, 17 Mass. 94. See Lamb v. Cecil, 25 W. Va. 288. 35 32 31 Farmers' Bank v. Troy Bank, 1 Doug. 457. 32 Lloyd v. West Branch Bank, 15 Pa. 172. 33 Branch Bank v. Poe, 1 Ala. 396. But his affidavit for a capias is proper on behalf of the bank. Wachsmuth v. Merchants' Nat. Bank, 96 Mich. 426. 34 Watson v. Bennett, 12 Barb. 196. 35 First Nat. Bank v. Manufacturers' Nat. Bank, 10 Ohio Cir. Ct. R. 233. But if the cashier had made the agreement as part of the consideration for receiving the draft for collection, there seems to be no rea son why such an act should not be 29 State of Tennessee v. Davis, 50 within the scope of his general au How. Pr. 447. 30 Pendleton v. Bank of Kentucky, 1 T. B. Mon. 171, under a statute. thority, provided the engagement § 101. Treasurer of savings bank and other general agents. The treasurer of a savings association is an officer with general powers analogous to the cashier's powers in a bank. A suit instituted on behalf of the savings association by its treasurer is presumed to be authorized.' He may authorize the attorney of the corporation to levy execution upon land and to purchase the same for the bank, and in pursuance thereof to bring a writ of entry. A manager of a branch bank has power to bind the bank as an accommodation indorser upon a draft payable at a branch bank. In fact the manager of a branch bank must necessarily represent for that branch all the corporate power. It would be difficult to find a corporate officer with as much authority, for as to the branch he must to the general public be a board of directors, a president and a cashier. An agent with a general authority binds the bank by his transfer as a matter of course. An authority given to an agent carries with it the powers necessary or fairly adapted to carrying out the authority. But a clerk acting as cashier in place of an absent cashier has authority to indorse the bank's paper only for collection." § 102. Tellers and book-keepers.- In banks where one teller acts at both the receiving and the paying counter, there can be no discrimination between the paying and the receiving teller, but in many banks the two functions are in separate officers, and in some banks these officers each have 1 Bangor Sav. Bank v. Wallace, 87 Me. 28. See also § 232, post. 2 Bristol Co. Sav. Bank v. Keavy, 128 Mass. 298. 7 Potter v. Merchants' Bank, 28 N. Y. 641. This is one of the decisions resulting from the mistaken New York doctrine that a deposit 3 Canadian Bank v. Coumbe, 47 for credit passes complete title to Mich. 358. 4 Such officers are the managers, for instance, of Wells, Fargo & Co., at Salt Lake City, or New York or London. 5 Smith v. Lawson, 18 W. Va. 212. 6 Burrill v. Nahant Bank, 2 Met. the bank. This ruling can be correct only as to one who knew a clerk was temporarily acting. A person who comes into a bank and finds a man acting as cashier has the right to assume he has the pow ers of cashier. 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 5 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. 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, or going to another place to settle business of the bank. The bank 8 Clarke 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 bet ter 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. |