these it would be evidently improper to notice in detail, in a treatise upon the subject we are considering. The liability of a corporation as bailee is, like that of a natural person, to be determined by the nature of the bailment, the degree of care

required from it, and the degree of care or diligence used. In case of a special deposit, from which it receives no profit whatever, but which is merely for the accommodation of the bailor, a bank is liable only for gross neglect, equivalent, in its effects upon contracts, to fraud.'

In Foster and others, Executors, v. The Essex Bank,2 a case which appears to have been very fully and learnedly argued by counsel, and examined by the court, this subject came under the consideration of the Supreme Court of Massachusetts. That was assumpsit brought against a bank, to recover the amount of a large special deposit in gold, which had been fraudulently or feloniously taken from the vaults of the bank by its cashier and chief clerk, and converted by them to their own uses. There being no evidence of gross neglect on the part of the bank, the directors, who represented the company, being wholly ignorant of the nature or amount of the deposit or of the transactions of the cashier and chief clerk, and these having no right, in the course of their official employment, to intermeddle with the deposit, except to close the doors of the vault upon it, when banking hours were over; it was adjudged that the bank was not liable for the loss, inasmuch as it only warranted the skill and faithfulness of its officers in their employments, and not their general honesty and uprightness. It was said, "that the bank was no more liable for this act of his (the cashier's) than they would be if he had stolen the pocket-book of any person, who might have laid it upon the desk, while he was transacting some business at the bank." The general rule laid down was, that fraud on property deposited, committed by the depositary or his servants, acting under his authority, express or implied, relative to the subject mat

Foster, &c. ut supra, 507.

* Ibid. 479.

Ibid. 511.

ter of the fraud, is equivalent to gross negligence, and renders the depositary liable.' It should be recollected, that because one is employed generally as the agent or servant of a bank, it does not follow that a dealer with the bank may not, by trust reposed in him in a particular transaction, make him his own agent, and be burthened with any loss which may follow his neglect or fraud in the business confided to him. In Manhattan Company v. Lydig, it was considered, that, where one who was usually employed by a bank as a book-keeper, though occasionally as teller, was entrusted by a dealer with deposits to be lodged in bank for him, and falsely obtained for the dealer credits beyond the amount deposited, that the latter, and not the bank, were liable for the deficit of deposits; inasmuch as the fraud was committed by his agent in discharge of his trust. A bank cannot be charged with negligence in not detecting the frauds of its servants, if the examinations of books, papers, &c., are in the way usual with banks. A bank is bound to exhibit its books to a depositor, on proper occasions, and the officers having charge of them are quoad hoc the agents of both parties.*

3. The reasonable and established customs of banks enter into and make a part of contracts made with them, and must have due weight in expounding their contracts, when knowledge of customs can in any way be brought home to those sought to be affected by them. An usage established by proof that current deposits, made in bank, and the proceeds of notes and drafts placed for collection, are to be paid to the depositor upon demand, at the counter of the bank, would prevent the run

1 Ibid. 508.

4 Johns. (N. Y.) R. 377.

Ibid. 389.

♦ Union Bank v. Knapp, 3 Pick. (Mass.) R. 96.

'Jones v. Fales, 4 Mass. R. 252; Widgerey v. Munroe, 6 Mass. R. 450; Lincoln & Kennebec Bank v. Page, 9 Mass. R. 155; Same v. Hammatt, Ib. 159; Smith v. Whiting, 12 Mass. R. 8; Blanchard v. Hilliard, 11 Mass. R. 88; Weld v. Gorham, 10 Mass. R. 866; Whitwell v. Johnson, 17 Mass. R. 452; City Bank v. Cutter, 3 Pick. (Mass.) R. 414; Yeaton v. Bank of

ning of the act of limitations against such depositor, until payment of his claim had been refused, or some act done with his knowledge dispensing with the necessity of a demand.' A dispensation from such notice would be furnished by an express notification of the bank that his demand would not be paid,' or by the suspension of specie payments, and discontinuance of banking operations by the bank, when these were known to the depositor; and from the time of such knowledge, the statute of limitations begins to run. Where a note was made payable at a bank, it was held that the parties were bound to know its usages, and had impliedly agreed that those usages should become a part of their contract. This doctrine was afterwards adjudged to be applicable to the parties to a bill of exchange drawn on a person at Washington, on the ground that it would probably be put into a bank there for collection.' It has been decided in Tennessee, that the law presumes that all persons getting accommodations at a bank are cognizant of all provisions of its charter which fix the law of the contract. A custom of a bank not to correct mistakes in the receipt or payment of money, unless discovered before the person leaves

Alexandria, 5 Cranch R. 52; Morgan v. Bank of North America, 8 Serg. & Rawle (Penn.) R. 73; Pearson v. Bank of Metropolis, 1 Peters R. 93; Bank of Columbia v. McGruder, 6 Har. & Johns. (Md.) R. 180; Bank of Columbia v. Fitzhugh, 1 Har. & Gill (Md.) R. 239; Hartford Bank v. Stedman, 3 Conn. R. 489; Raborg v. Bank of Columbia, 1 Har. & Gill. (Md.) R. 231; Union Bank of Georgetown v. Planters Bank, 9 Gill & Johns. (Md.) R. 439; Peirce v. Butler, 14 Mass. R. 303; Renner v. Bank of Columbia, 9 Wheat. R. 585.

1 Planters Bank v. Farmers and Mechanics Bank, 8 Gill & Johns. (Md.) R. 449; Union Bank of Georgetown v. Planters Bank, 9 Gill & Johns. (Md.) R. 439; Same v. Same, 10 Ibid. 422.

• Ibid.

Ibid.

Mills v. Bank of the United States, 11 Wheat. R. 431; Cohen v.

2 Sm. & Marsh. (Miss.) R. 227.

Hunt,

* Bank of Washington v. Triplett, 1 Peters R. 25. See also Whitwell v.

Johnson, 17 Mass. R. 452.

6 Hays et al. v. State Bank, Martin & Yerger R. 179.

the room, is, however, illegal and void.' A custom of a bank to pay only half of a 'half bank note, has also been held to be bad, as unsupported by law."

Usages of banks will not be judicially noticed, but must be proved, or must have been heretofore proved, and established by courts of justice, before they will be recognized and applied.

4. A very large portion of the business of banking corporations consists in the collection by them as agents, of debts in the shape of notes and drafts; and a clause in a bank charter authorizing the bank “to deal in bills of exchange," was construed as authority to the bank to take bills of exchange, payable elsewhere, for collection merely. We need hardly say, that the law applicable to such agents, in general, applies equally to them. Where a bank, in which a note is deposited for collection, places it in a notary's hands on the party's failure to pay, and the notary omits to give notice to the indorser, so that he is discharged, the bank is not liable to the holder, although the maker is unable to pay.' But if the bank, contrary to custom, does not employ a notary in such case, but employs some other person as agent, and such person omits to give notice, the bank is liable. By failing to demand a note or bill left with it for collection, a bank makes the note or bill its own, and becomes liable to the owner for the amount." In such case the debtor's insolvency may be shown in mitigation of damages. A bank, in which bills of exchange are deposited

1 Gallatin v. Bradford, 1 Bibb. (Ken.) R. 209.

Allen v. State Bank, 1 Dev. & Bat. (N. C.) R. 3.

Planters Bank v. Farmers and Mechanics Bank, 8 Gill & Johns. (Md. R. 449.

Bank v. Knox, 1 Alabama R. 118; Bates & Hines v. The Bank of the State of Alabama, 2 Alabama R. 466.

Bellemire v. Bank of United States, 1 Miles (Penn.) R. 173. And see Bank of Owego v. Babcock, 5 Hill (N. Y.) R. 152; Frazier v. New Orleans Gas Light & Banking Co. 2 Robinson (La.) R. 294.

Ibid.

"Bank of Washington v. Triplett, 1 Peters R. 25; S. P. McKinster v. Bank of Utica, 9 Wend. (N. Y.) R. 46.

• Stone v. Bank 2 Dev. (N. C.) R. 408.

for transmission only, fulfils its duty by sending them to the bank to which they are to be transmitted for collection, and is not responsible for any laches of that bank. A bank that collects a bill of exchange, on its being transmitted by the cashier of another bank, where it was lodged for collection, is liable to the owner, and cannot set off a claim against the bank from which the bill was received. In such case, the bank transmitting, and the bank collecting, are both to be regarded as the agents of the holder of the note, and the liability of either bank to the holder, and of the holder to either of the banks paying him by mistake, is direct. It has been held in Maryland, that the exemption in the statute limitations of that state of such accounts as concern the trade or merchandise between merchant and merchant, does not apply to accounts between two banking institutions, growing out of mutual deposits and collections made by each with and for the other; the interest of banking institutions, as well as public policy, requiring that the liquidation of balances between banks should be regular and frequent.*

3

5. A very important class of cases, in which the doctrine of presumed assent has been applied to corporations aggregate, is in the acceptance of official bonds, grants, &c. In case of an individual, there has never been a question but that a paper, intended for his benefit and found in his possession, would be considered as accepted by him, his assent thereto being presumed. A different rule was thought applicable to corporations, or their managing boards; and that, inasmuch as they ordinarily express their assent by vote, a vote entered on the corporation books was the only mode by which it could be

'Mechanics Bank v. Earp, 4 Rawle (Penn.) R. 384.

'Lawrence v. Stonington Bank, 6 Conn. R. 521.

'Bank of Orleans v. Smith, 3 Hill (N. Y.) R. 560; where see case, Allen v. Merchants Bank of City of N. Y. 22 Wend. (N. Y.) R. 215, commented on and explained.

4 Farmers & Mechanics Bank v. Planters Bank, 10 Gill & Johns. (Md.) R. 422, 441.