poration will be bound.' But questions of difficulty arise over ex officio powers; and these questions are more or less peculiar to corporation law. If you are dealing with the president, or cashier, or the transfer agent, what is the authority which the corporation holds these officers out as possessing, by reason merely of their incumbency of the office? In Bank v. Armstrong, 152 U. S. 346, for illustration, it is said that the vice-president of a national bank, however general his powers, cannot borrow money for the bank unless specially authorized to do so; "and it is equally obvious that persons dealing with the bank are presumed to know the extent of the general powers of the officers." What are these general powers which the law presumes that you know? No concise answer is possible for the reason that much depends upon the nature of the corporation and its business; and because, further, there is a conflict of decision in regard to corporations of similar nature. The following are general principles :

First. The inherent, ex officio business powers of the president, vice president and secretary are few. These offices are not necessarily executive; and it is sometimes. said that the president has, officially, no more executive power than any other director, except that he and the secretary are the proper officers to sign the corporate name and affix the seal to documents previously authorized by the board. Accordingly, it has been held that the president and secretary have no inherent power to issue negotiable paper in the name of the corporation. R. R. Co. v. Bank, 31 L. R.

1 Carrington v. Turner, 101 Md. 438; Buchwald Co. v. Hurst, 111 Md. 578.

2 Compare: Anton v. Bank, 174 U. S. 125; and Aldrich v. Bank, 176 U. S. 618. The secretary has no presumptive authority to appoint agents or to ratify appointments made without authority. Carroll v. Manganese Co., 111 Md. 252.

A. 535. But while, presumptively, the president is nothing more than the presiding officer of the board and his further powers are derivative, nevertheless the authority to do a particular act may always be inferred from the acquiescence of the board in his prior performance of similar acts. And in the case of business corporations, the courts are not slow to draw the inference.1

Second. Such offices as general manager, treasurer and cashier are essentially executive and the incumbent has implied powers commensurate in scope with the business entrusted to him. Those of a general manager, for example, are co-extensive with the company's business; he may borrow money and accept bills in usual course; he may make contracts, but he has no implied authority to change a contract made by the board.3 So with regard to the other officers and customary agents, the implied power is co-extensive with the duties customarily pertaining to the office; and the conflict of judicial opinion is not over the principle, but in its application to the facts of a particular case. For illustration, in manufacturing and trading companies the treasurer has the inherent power to issue negotiable paper; but in Bank v. Citizens' Co., 159 Mass. 505, the judges differed as to whether this principle should be applied to a gas light company.

1 For a valuable note on the powers of the president and vicepresident, see Wait v. Nashua Armory Asso. 14 L. R. A. 356; Elliott, Corp. sec. 529. Compare R. R. Co. v. Bastian, 15 Md. 499.

27 Thompson Corp. sec. 8556; and compare Equitable Co. v. Fisher, 71 Md. 439.

3 Merritt v. Peninsular Co., 91 Md. 453.. See Express Co. v. Trego, 35 Md. 47.

For a general collection of the cases on the inherent powers of officers and agents, see 21 Am. & Eng. Ency. 833; 1 Wilgus Corp.

Third. It makes no difference to third parties acting in good faith that an officer or customary agent is using the authority of his position dishonestly. If he is the proper person to do the particular act when it is regularly done, the corporation will be bound. In Tome v. R. R. Co., 39 Md. 36, there was a by-law providing that all certificates of shares should be signed by the president and countersigned and sealed with the corporate seal by the treasurer, who was made the transfer agent and the custodian of all the books relating to the transfer of capital stock. It was, consequently, the duty of the treasurer to see to the transfers of shares on the corporate books and to issue new certificates to persons entitled. The book of certificates contained a number that had been signed by the president in blank. Using these and forging the president's name to others, the treasurer issued certificates to a confederate, who borrowed money from the appellant on the security of the shares. The court held that the company was liable for the appellant's loss on the shares evidenced by all the certificates,-two of the judges dissenting as to the forgeries.1

704. Machen, Corp. §1668, &c. The decisions turn upon whether a particular act is within the scope of the office; and the lesson taught by them is the wisdom of having a resolution of the board in all cases of doubt and importance. The question of the time for which contracts of employment may be made in behalf of a corporation by its officers, directors and agents, is discussed in the note to Carney v. Insurance Co., 49 L. R. A. 471. In that case the president and the actuary of an insurance company acting under a by-law which authorized them to appoint and remove employees, had made a life contract with a doctor. It was held that the contract was unreasonable and beyond the powers of the officers making it. See also West v. Camden, 135 U. S. 507.

1 In R. R. Co. v. Wilkens, 44 Md. II, a station agent had issued to himself bills of lading for grain which he did not ship. The

In R. R. Co. v. Franklin Bank, 60 Md., 36, certain certificates used by the appellant in funding its overdue mortgage coupons and issued to the holders of such coupons desiring to fund them, had been signed by the president and treasurer of the company, sealed with its seal and left with the assistant treasurer, to be filled up and used during an anticipated absence from the office, of the first named officers. As part of the funding scheme, the coupons were to be deposited with the Safe Deposit and Trust Company, and the receipt of its treasurer attached to the certificate when returned to the holder. The certificates, with the receipt attached, were regularly dealt in on the market and the appellee loaned money on certain of them which the assistant treasurer had issued to himself,-having forged to the receipt the name of the treasurer of the Safe Deposit and Trust Company. Applying the rule in Tome's Case, supra, the Railroad Company was held liable.

Fourth. It has been stated above that the fraudulent and dishonest conduct of an officer or agent in the exercise of his apparent powers does not affect third parties acting in good faith. There is, however, some difficulty in laying

appellee had cashed in good faith, a draft drawn against the bill of lading. The court held that the company was not bound, on the ground that to the rule in Tome's Case "there is and must be the exception of the recognized and well settled principle of commercial law in reference to bills of lading." By the subsequent Act of 1876, certain kinds of bills of lading were made negotiable instruments. In Lazard v. Transportation Co. 78 Md. 3, the rule in R. R. Co. v. Wilkens, supra, was applied, because the bills of lading in question did not come within the provisions of the Act. See further: Bank v. B. & O. R. Co., 99 Md. 662; and Bank v. Steamboat Co., 102 Md. 575. The whole subject is now governed by the Uniform Bill of Lading Act, Code (1911), Art. 14.

down a rule which shall determine just how far the appearances of a particular transaction operate to put third parties upon inquiry. In R. R. Co. v. Franklin Bank, supra, two of the certificates were made out in the name of the forger himself and were by him pledged to the bank, which had knowledge of the nature and scope of his employment. It was held that these facts were not sufficient to put the bank on inquiry or to deprive it of the rights of a bona fide purchaser without notice. In Moores v. Bank, 111 U. S. 156, the appellant had loaned money to her brother-in-law, the cashier of a national bank, on his agreement to give her, as security for repayment, certain shares in the bank which he represented that he owned. In point of fact, he owned no shares, but the appellant received a share certificate made out in her name in due form. It bore the genuine seal of the corporation and the genuine signatures of the president and cashier, the latter having filled up one of several certificates which the president had signed in blank to be used, if needed, in his absence. It was held that the appellant's knowledge of the fact that the cashier was acting for himself as well as in his official capacity, in the transaction requiring the issue of the certificate, was sufficient to put her on inquiry and that she could not claim the rights of an innocent holder.1

§ 69. When notice to an officer or agent is notice to the corporation. When a corporate agent is duly author

1 The court distinguishes R. R. Co. v. Bank, 60 Md. 36, but not happily. Mrs. Moores had no knowledge of the rascality of her brother-in-law; as cashier of the bank, he would naturally have been a shareholder; and the transaction on its face was precisely what it would have been had he actually owned the shares. In such a case, it is a sound rule which makes the corporation warrant its officer's honesty.