69

68

antecedent debt; " to sell or purchase or mortgage real estate; to lease real estate; 70 to make a contract with the government for the transfer of money."1

The authority of the cashier does not extend to transactions that are without the corporate powers. 72 It is confined to transactions which are for the benefit of the bank. It does not extend, for example, to the making of accommodation paper.73 Nor does it extend to a transaction which is for the benefit of the cashier personally, and one dealing with him Iwith notice that such is the character of the transaction can acquire no rights thereby against the bank, unless the transaction was actually authorized, either expressly or by implication.74

68 State of Tennessee v. Davis, 50 How. Prac. (N. Y.) 447. See "Banks and Banking," Dec. Dig. (Key No.) § 104; Cent. Dig. § 248.

69 Bank of Gloster v. Hindman, 95 Miss. 742, 50 South. 65; Winsor v. Lafayette County Bank, 18 Mo. App. 665; Leggett v. New Jersey Mfg. & Banking Co., 1 N. J. Eq. 541, 23 Am. Dec. 728. See "Banks and Banking," Dec. Dig. (Key No.) § 104; Cent. Dig. § 248.

70 Spongberg v. First Nat. Bank of Montpelier, 18 Idaho, 524, 110 Pac. 716, 31 L. R. A. (N. S.) 736. See "Banks and Banking," Dec. Dig. (Key No.) § 104;' Cent. Dig. § 248.

71 United States v. City Bank of Columbus, 21 How. 356, 16 L. Ed. 130. See "Banks and Banking," Dec. Dig. (Key No.) § 105; Cent. Dig. § 252.

72 Farmers' & Merchants' Nat. Bank v. Smith, 77 Fed. 129, 23 C. C. A. 80; Grow v. Cockrill, 63 Ark. 418, 39 S. W. 60, 36 L. R. A. 89. Cf. L'Herbette v. Pittsfield Nat. Bank, 162 Mass. 137, 38 N. E. 368, 44 Am. St. Rep. 354. See "Banks and Banking," Dec. Dig. (Key No.) § 102; Cent. Dig. § 243.

73 West St. Louis Savings Bank v. Shawnee County Bank, 95 U. S. 557, 24 L. Ed. 490; First Nat. Bank of Duncan v. Anderson, 141 Fed. 926, 73 C. C. A. 160.

The bank is bound in favor of a holder in due course. Bank of Genesee v. Patchin Bank, 19 N. Y. 312; Houghton v. First Nat. Bank of Elkhorn, 26 Wis. 663, 7 Am. Rep. 107. See "Banks and Banking," Dec. Dig. (Key No.) § 109; Cent. Dig. § 260.

74 Anderson v. Kissam (C. C.) 35 Fed. 699 (cf. Kissam v. Anderson, 145 U. S. 435, 12 Sup. Ct. 960, 36 L. Ed. 765); State Nat. Bank v. Newton Nat. Bank, 66 Fed. 691, 14 C. C. A. 61; Lamson v. Beard. 94

Signature to Negotiable Instrument

While, as a rule, one who is not named as a party to a negotiable instrument cannot maintain an action or be charged thereon, by usage the name of the cashier of a bank, with his title, "Cashier," has become established as the alternative designation of the bank. Where paper is so payable to him, an action may be maintained thereon by the bank,75 or by the cashier; and, when indorsed by him in the same form, the indorsement is the indorsement of the bank, which may be charged thereon."

76

Fed. 31, 36 C. C. A. 56, 45 L. R. A. 822; Home Savings Bank of Iowa Falls v. Otterbach, 135 Iowa, 157, 112 N. W. 769, 124 Am. St. Rep. 267; Hier v. Miller, 68 Kan. 258, 75 Pac. 77, 63 L. R. A. 952; Langlois v. Gragnon, 123 La. 453, 49 South. 18, 22 L. R. A. (N. S.) 414; Lee v. Smith, 84 Mo. 304, 54 Am. Rep. 101; Mendel v. Boyd, 71 Neb. 657, 99 N. W. 493; Campbell v. Manufacturers' Nat. Bank, 67 N. J. Law, 301, 51 Atl. 497, 91 Am. St. Rep. 438; Ellis v. First Nat. Bank, 22 R. I. 565, 48 Atl. 936. Cf. Preston v. Cutter, 64 N. H. 461, 13 Atl. 874.

The cashier has no authority, by virtue of his office, to certify his own check, or to issue cashier's drafts to his own order in payment of his debts. Gale v. Chase Nat. Bank, 104 Fed. 214, 43 C. C. A. 496. See "Banks and Banking," Dec. Dig. (Key. No.) §§ 105, 117; Cent. Dig. §§ 252, 288.

75 Baldwin v. Bank of Newbury, 1 Wall. 234, 17 L. Ed. 534; Darby v. Berney Nat. Bank, 97 Ala. 643, 11 South. 881; Hobbs v. Chemical Nat. Bank, 97 Ga. 524, 25 S. E. 348; Nave v. First Nat. Bank of Lebanon, 87 Ind. 204; President, etc., of Commercial Bank v. French, 21 Pick. (Mass.) 486, 32 Am. Dec. 280; First Nat. Bank of Angelica v. Hall, 44 N. Y. 395, 4 Am. Rep. 698. See "Bills and Notes," Dec. Dig. (Key No.) § 123; Cent. Dig. §§ 260-267.

76 McHenry v. Ridgley, 2 Scam. (Ill.) 309, 35 Am. Dec. 110; Fairfield v. Adams, 16 Pick. (Mass.) 381. See "Bills and Notes," Dec. Dig. (Key No.) § 123; Cent. Dig. §§ 260–267.

77 Collins v. Johnson, 16 Ga. 458; Bank of State v. Wheeler, 21 Ind. 90; Bank of Genesee v. Patchin Bank, 13 N. Y. 309; Bank of New York v. State Bank of Ohio, 29 N. Y. 619; Houghton v. First Nat. Bank of Elkhorn, 26 Wis. 663, 7 Am. Rep. 107.

"Where an instrument is drawn or indorsed payable to a person as 'cashier' of a bank, it is deemed to be prima facie pay

*

TELLERS AND SUBORDINATE OFFICERS

83. The tellers and other subordinate officers are under the direction of the cashier. A receiving teller has au

thority to receive deposits, and a paying teller to to pay and usually to certify checks.

The tellers and other subordinate officers of the bank are under the direction of the cashier, and "are, as it were, the arms by which designated portions of various functions are discharged." 78 Usually there is a paying teller and a receiving teller, who are charged with the respective duties of paying checks presented for payment and of receiving deposits, although the two functions may be united in a single teller."" The receiving teller is, of course, a proper officer to receive a deposit, and it has been held that, if a deposit is made with the paying teller he becomes the depositor's agent; the transaction being outside the ordinary scope of his employment.8° of which he is such officer, and may be

able to the bank

negotiated by either the indorsement of the bank * or the indorsement of the officer." Negotiable Instruments Law, § 42. See "Bills and Notes," Dec. Dig. (Key No.) §§ 183, 197; Cent. Dig. $$ 444, 487.

78 Merchant's, Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L. Ed. 1008.

Where the cashier had entire control of the bank, and gave the teller authority to receive special deposits, the teller's act in receiving such a deposit bound the bank. Pattison v. Syracuse Nat. Bank, 80 N. Y. 82, 36 Am. Rep. 582.

As to functions of a note teller, see Marine Bank v. Ferry's Adm'rs, 40 Ill. 255. See Banks and Banking," Dec. Dig. (Key No.) §§ 102, 106, 109; Cent. Dig. §§ 239, 256, 257.

79 A receiving and paying teller had apparent authority to receive a note for collection. City Nat. Bank of Ft. Worth v. Martin, 70 Tex. 643, 8 S. W. 507, 8 Am. St. Rep. 632. See "Banks and Banking," Dec. Dig. (Key No.) § 112; Cent. Dig. § 272.

80 Thatcher v. Bank of State of New York, 5 Sandf. (N. Y.) 121. See "Banks and Banking," Dec. Dig. (Key No.) §§ 106, 121; Cent. Dig. § 298.

But a deposit with the paying teller, found behind the counter employed in the bank's business, at his request, it appearing that in the absence of the receiving teller other officers acted in his place, has been held to bind the bank. It is usually within the authority of the paying teller to certify checks.82

$1

ADMISSIONS AND REPRESENTATIONS

84. In accordance with the general rule of agency, a statement made by the cashier or other officer of a bank, in and as a part of an authorized transaction for the bank, is binding upon it, and may be the basis of an estoppel, or a ground for rescission, or for the recovery of damages in an action of deceit,

In General

It is a general rule, applicable to corporations as well as to individuals, that the statement of an agent is evidence. against his principal, when it is made with his authority, or when it is made by the agent in the transaction for his principal of some authorized business, to which it had reference and with which it was connected, so as to be part of that transaction.83 This rule applies, of course, to statements made by the officers and agents of banks. A statement made by the cashier or other officer, in and as a part of an authorized transaction for the bank, is binding upon it, and, if false, may be the basis of an estoppel, or a ground for rescinding the transaction, or for the recovery of damages in an action for deceit,

See, also, Second

81 East River Nat. Bank v. Gove, 57 N. Y. 597. Nat. Bank v. Averell, 2 App. D. C. 470, 25 L. R. A. 761. See "Banks and Banking," Dec. Dig. (Key No.) §§ 106, 121; Cent. Dig. § 298.

82 Farmers' & Mechanics' Bank v. Butchers' & Drovers' Bank, 16 N. Y. 125, 69 Am. Dec. 678; ante, p. 141. See "Banks and Banking," Dec. Dig. (Key No.) § 106; Cent. Dig. § 256. 83 Tiffany, Agency, 247.

according to the circumstances of the particular transaction.** Thus, if the cashier states to a surety on a note that it is paid, whereby the surety is induced to surrender to the bank. property of the principal debtor, the bank is estopped to deny the truth of the statement.8 85 If an officer has authority to procure a discount of paper held by the bank, and induces. another bank to discount the paper by fraudulent representations concerning it, the bank which makes the discount may rescind the transaction, or may maintain an action for damages caused by the deceit.8

On the other hand, a bank is not bound by a statement of its officer, if he is not authorized to make it, or it is not part of an authorized transaction.R 87 The declaration of a director, when he is not specially authorized in the matter, is

84 Binghampton Trust Co. v. Auten, 68 Ark. 299, 57 S. W. 1105, 82 Am. St. Rep. 295; Carr v. National Bank & Loan Co. of Watertown, 167 N. Y. 375, 60 N. E. 649, 82 Am. St. Rep. 725.

Where a bank discounted a certified check on the strength of a statement of the teller of the certifying bank that the certification was good, and the teller failed to state that payment had been stopped, the drawee bank, by failure to state that fact, was estopped to deny its liability. Clews v. Bank of New York Nat. Banking Ass'n, 89 N. Y. 418, 42 Am. Rep. 303. See "Banks and Banking," Dec. Dig. (Key No.) § 111; Cent. Dig. §§ 269, 270.

85 Franklin Bank v. Steward, 37 Me. 519; Cochecho Nat. Bank v. Haskell, 51 N. H. 116, 12 Am. Rep. 67. See "Banks and Banking," Dec. Dig. (Key No.) § 111; Cent. Dig. §§ 269, 270.

86 Binghampton Trust Co. v. Auten, 68 Ark. 299, 57 S. W. 1105, 82 Am. St. Rep. 295. See "Banks and Banking," Dec. Dig. (Key No.) § 111; Cent. Dig. §§ 269, 270.

87 Henry v. Northern Bank of Alabama, 63 Ala. 527; Merchants' Bank v. Marine Bank, 3 Gill (Md.) 96, 43 Am. Dec. 300; Union Banking Co. of Baltimore City v. Gittings, 45 Md. 181; Wyman v. President, etc., of Hallowell & Augusta Bank, 14 Mass. 58, 7 Am. Dec. 194; President, etc., of Salem Bank v. President, etc., of Gloucester Bank, 17 Mass. 21, 9 Am. Dec. 111; Mapes v. Second Nat. Bank of Titusville, 80 Pa. 163; Hazelton v. Union Bank of Columbus, 32 Wis. 34.

A statement of a teller that an indorsement was good held not