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. 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 principal 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 know ingly 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. particular course of action with reference to special matters permitted by the corporate direction. The bank is likewise bound. These cases may be also treated as cases of acquiescence by the bank. § 106. Officer agent for another.- When the officer of a bank in a particular transaction acts as agent or trustee for another, and also as agent for the bank, the question involved is more frequently one of notice than of power in the agent; but it may serve a useful purpose to collect some of the cases in one section in order to illustrate the general principle. Some of the cases are decided on the question of which party has received a benefit. Thus, where the treasurer of one company was the cashier and manager of a bank, and took the bonds of the company and pledged them in the name of the bank, and secured advances to be made to the bank, the directors of the bank as well as the directors of the corporation being ignorant of the whole matter, the bank was held liable for the bonds, on the plain ground that it had received a benefit. Again, a cashier was the agent of a trustee. He received trust moneys into the bank, and knowingly allowed the trust money to be taken to pay the private debt of the trustee, and his bank was held liable. This is a simple case of notice to the bank, where the agent had acquired his knowledge while acting upon the bank's business, and his knowledge was therefore imputable to the bank. In another case a town treasurer was the cashier of a bank. He drew a note as town treasurer and discounted fact. See note 2, supra. The distinction should be that the act be not forbidden by a statute or rule of general law. 7 Caldwell v. National Mohawk Val. Bank, 64 Barb. 333; Martin v. Webb, 110 U. S. 7; Mercantile Bank v. McCarthy, 7 Mo. App. 318; First Nat. Bank v. Graham, 79 Pa. 106; Neiffer v. Bank of Knoxville, 1 Head, 162, as to president signing checks and receiving payments instead of cashier. Iowa State Bank v. Black, 91 Iowa, 490, is not contra, because there was no course of dealings. See also First Nat. Bank v. Stone, 106 Mich. 367; Winton v. Little, 94 Pa. 64. 1 Fishkill Sav. Inst. v. Bostwick, 80 N. Y. 162. 2 Loring v. Brodie, 134 Mass. 453. it at his bank and pocketed the proceeds; the board of directors of his bank was ignorant of the transaction, he alone acting. This is a case of notice, and it was rightly held that the bank could not sue on the note, the reason being that, the cashier having acted for the bank in discounting the note, whatever he knew the bank must be held to know. It will be seen from the preceding cases that where two corporations have common officers, and are dealing with each other, the question that arises is sometimes a question of power in the officer and sometimes a question of notice to the bank through an officer. If it is a question of power in the agent, two conditions of fact may arise. The two corporations may have a common officer, but the common officer does not act for either corporation. In such case the fact of the common officer existing is wholly immaterial.* Or, again, the common officer may act for the one corporation and other officers may act for the other corporation. In such case the fact of the common officer existing is wholly immaterial as to the corporation for which the common officer does not act. But where the same officer acts for both corporations, the rule to be applied is that the agent may contract with himself as agent to the extent of his power; that is to say, the binding force of the contract upon each corporation is to be determined solely by the question of the agent's power given him by that particular corporation.5 If any question of notice arises the rule is very simple. All the knowledge, though uncommunicated, that its agent had present in his mind at the time of the transaction is to be imputed to each corporation. Thus, calling the bank B. and the other corporation A., all that the officer knew, 3 First Nat. Bank v. New Milford, 36 Conn. 93. The opinion puts the case on the ground that by suing on the note it ratified the fraud. But that ground seems hardly sound. Suppose the bank had sued for money had and received, not ratifying the fraud, under the opin ion it could have recovered. But it could not because, it had notice. 4 First Nat. Bank v. Christopher, 40 N. J. Law, 435. 5 Thus Fort Dearborn Nat. Bank v. Seymour, 73 N. W. R. 724, is a question of power. whether he gained his knowledge on the affairs of the bank or the other corporation B., if the latter was present in his mind, is to be imputed to the bank A., and all that he knew as agent of the other corporation B., or as agent of the bank A., if it was present in his mind, is to be imputed to B. Thus, the cashier of a bank makes a contract with the directors of a corporation, of which he is also a director, but in regard to which he acted solely for the bank; his power is to be determined by the general scope of his authority, the particular course of dealing as to the allowance of power to the cashier in that bank in connection with the considerations of express or implied authorization or of ratification or of retention of benefits by the bank. But if the cashier of the bank makes a contract with a corporation of which he is an officer, and he acts on both sides, his power to make the contract is still to be determined by the rules of law stated as to the last illustration, with the limitation that if he knows that as officer of the bank he has not the power to make the contract, although it would generally be lawful for him to make it, his knowledge is to be imputed to the other corporation, if present in his mind, and that corporation's rights are to be treated as if he knew the cashier's lack of power; and conversely, if he knew that he, as officer of the other corporation, or the other officers with whom he was acting for the other corporation, had not the power to make the contract, his knowledge is to be imputed to the bank if present in his mind, and the bank is to be treated as if it knew that he, as the officer of the other corporation, had not the power to make the contract. The cases applicable to banks it is believed bear out this statement of the law. Thus, it is held that if the bank officer dealing as officer for another corporation with the bank does not communicate his knowledge to the bank, the bank is not bound, where the bank officer did not act in the particular transaction for the bank. 6 Murray v. Pauly, 56 Fed. R. 962, illustrates this point. But if in such a dealing of Mass. 74; Innerarity v. Merchants' 7 Corcoran v. Snow Cattle Co., 151 Nat. Bank v. Loyhed, 28 Minn. 396; |