Opinion of the Court.

present position of the bank-that from 1873 to 1880, inclusive, Tomlin, as cashier, entered in the name of the bank, upon the proper records of the county, satisfaction of more than one hundred and fifty different deeds of trust executed to secure debts held by the corporation. In no instance did he receive previous orders to do so from the directors. His authority or duty to do so was never questioned to his knowledge or to the knowledge of any one having business with the bank. To all who came into the bank or had transactions with it his control seemed to be as absolute as if he were the owner of all the stock. His authority to make the arrangement with Kenney, Frank & Darrow and Remsen's trustees was never questioned by any one until February, 1880, when McFerran returned from Colorado on a visit to Missouri. Tomlin during his explanation of the details of that arrangement exhibited to him the old notes and trust deeds, they having remained in his possession in the package in which he originally placed them for Kenney. McFerran took possession of them, claiming that they were the property of the bank, although after the new deed of trust Kenney had given up the land to the bank and took back a lease from it.

The bank, having through Tomlin's, management and with the money obtained from Remsen's trustees removed the lien given by the Powers deed of trust, and the lien or the claim of lien upon a part of the lands in virtue of the judgments obtained by the Exchange Bank of Breckinridge and Ryan, now ignores the new deed of trust, and seeks to foreclose the lien given by the original deeds, thereby defeating the prior lien given to Remsen's trustees by the deed of 1879; this, upon the ground that Tomlin as cashier, without authority. and without their knowledge, had assumed to discharge the original debts, to cancel the original trust deeds, and to take a new note secured by a new deed of trust. It is to be observed that while the bank repudiates this arrangement, upon the faith of which Remsen's trustees parted with their money, it retains and does not offer to return, but has used in its business $3,110.14 of the sum loaned by those trustees through Frank & Darrow to Kenney. It is willing to accept all the benefits resulting

Opinion of the Court.

from the acts of its cashier, but endeavors to escape the burdens attached to it by the agreement of the parties.

We have stated with some fulness the circumstances disclosed by the record, so that the general expressions in this opinion may be interpreted by the facts of this case. To permit the bank, under these circumstances, to dispute the binding force of the arrangement made by its cashier in reference to Kenney's indebtedness, including the cancellation of the old note and trust deeds, and the acceptance of the new ones, would be a mockery of justice. It is quite true, as contended by counsel for appellants, that a cashier of a bank has no power by virtue of his office, to bind the corporation except in the discharge of his ordinary duties, and that the ordinary business of a bank does not comprehend a contract made by a cashier-without delegation of power by the board of directors-involving the payment of money not loaned by the bank in the customary way. United States Bank v. Dunn, 6 Pet. 51; United States v. City Bank of Columbus, 21 How. 356; Merchants' Bank v. State Bank, 10 Wall. 604. Ordinarily, he has no power to discharge a debtor without payment, nor to surrender the assets or securities of the bank. And, strictly speaking, he may not, in the absence of authority conferred by the directors, cancel its deeds of trust given as security for money loaned-certainly not, unless the debt secured is paid. As the executive officer of the bank, he transacts its business under the orders and supervision of the board of directors. He is their arm in the management of its financial operations. While these propositions are recognized in the adjudged cases as sound, it is clear that a banking corporation may be represented by its cashier-at least where its charter does not otherwise provide-in transactions outside of his ordinary duties, without his authority to do so being in writing, or appearing upon the record of the proceedings of the directors. His authority may be by parol and collected from circumstances. It may be inferred from the general manner in which, for a period sufficiently long to establish a settled course of business, he has been allowed, without interference, to conduct the affairs of the bank. It may be implied from the conduct or acquiescence of the cor

Syllabus.

poration, as represented by the board of directors. When, during a series of years or in numerous business transactions, he has been permitted, without objection and in his official capacity, to pursue a particular course of conduct, it may be presumed, as between the bank and those who in good faith deal with it upon the basis of his authority to represent the corporation, that he has acted in conformity with instructions received from those who have the right to control its operations. Directors cannot, in justice to those who deal with the bank, shut their eyes to what is going on around them. It is their duty to use ordinary diligence in ascertaining the condition of its business, and to exercise reasonable control and supervision of its officers. They have something more to do than, from time to time, to elect the officers of the bank, and to make declarations of dividends. That which they ought, by proper diligence, to have known as to the general course of business in the bank, they may be presumed to have known in any contest between the corporation and those who are justified by the circumstances in dealing with its officers upon the basis of that course of business.

These principles govern the case before us, and lead necessarily to an affirmance of the decree adjudging the surrender cancellation of the old deeds and the notes given by Kenney, and declaring the liens in favor of Remsen's trustees and Frank -& Darrow to be superior to that of the bank.

It is so ordered.

HOLLAND v. CHALLEN.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF NEBRASKA.

Submitted December 13th, 1883.-Decided January 7th, 1884.

Equity-Nebraska-Statutes.

1. A statute of Nebraska provided that an action may be brought and prosecuted to final decree, judgment, or order, by any person or persons,

Argument for the Appellee.

whether in actual possession or not, claiming the title to real estate, against any person or persons who claim an adverse estate or interest therein, for the purpose of determining such estate or interest, and quieting the title to such real estate: Held, That it dispensed with the general rule of courts of equity, that in order to maintain a bill to quiet title, it is necessary that the party should be in possession, and in most cases that his title should have been established by law, or founded on undisputed evidence, or long continued possession. Clark v. Smith, 13 Pet. 195, with reference to a Kentucky statute in some respects similar, approved.

2 Jurisdiction over proceedings to quiet title and prevent litigation is inherent in courts of equity; and although the courts have imposed limitations upon its exercise, it is always competent for the legislative power to remove those restrictions.

3. While it is true that alterations in the jurisdiction of State courts cannot affect the jurisdiction of the Circuit Courts of the United States, so long as the equitable rights themselves remain ; yet an enlargement of equitable rights may be administered by the Circuit Courts as well as by the courts of the State.

4. Under the Nebraska statute cited above, a bill to quiet title which, on its face, presented a good title in the complainant, gave him the right to call upon the defendant to produce and disclose whatever estate he had in the premises in question, to the end that its validity might be determined, and, if adjudged invalid, that the title of the plaintiff might be quieted.

Bill in equity to quiet title. Plaintiff claimed under a tax sale, but did not aver possession. Defendant was owner prior to the tax sale. The bill charged:

"That said defendant is contriving now to wrong and injure your orator in the premises by claiming to be the owner of said real estate, and by trying to obtain, take, and keep possession thereof, and by denying and slandering your orator's title to and his right of possession thereof, all of which acts, doings, and pretences of said defendant are contrary to equity and good conscience, and tend to the manifest wrong, injury, and oppression of your orator in the premises."

The defendants demurred, and the court below dismissed the bill. The plaintiff appealed.

Mr. Lewis A. Groff and Mr. C. S. Montgomery for appellant.

Mr. T. W. Marquett and Mr. Geo. W. Doane for appellee. -I. This bill is exhibited by the holder of the tax titles to

Opinion of the Court.

have the same established as against the true owner, who claimed the fee-simple title, before the complainant acquired any interest in the property described in the bill, and who still claims it. The title so held by complainant, and the only title which he holds, as shown by the averments of his bill, is at best a very doubtful title, and the principle applied by courts of equity is, that where a complainant has himself a doubtful title, he cannot have the relief sought in a bill quia timet. West v. Schuebley, 54 III. 523; Huntington v. Allen, 44 Miss. 654; Low v. Staples, 2 Nev. 209.-II. The bill states no facts constituting grounds for equitable relief. It sets forth the tax deeds held by complainant, the adverse fee-simple title claimed by the defendant, that complainant is entitled to possession and that defendant is keeping him out of possession, or in the language of the bill, "trying to obtain, take and keep possession thereof," and denying the right of possession of complainant. These allegations are sufficient as the basis of an action at law to recover possession, but there is not an allegation in the bill showing any ground for equitable jurisdiction.

MR. JUSTICE FIELD delivered the opinion of the court.

This is a suit in equity to quiet the title of the plaintiff to certain real property in Nebraska as against the claim of the defendant to an adverse estate in the premises. It is founded upon a statute of that State which provides:

"That an action may be brought and prosecuted to final decree, judgment, or order by any person or persons, whether in actual possession or not, claiming title to real estate, against any person or persons who claim an adverse estate or interest therein, for the purpose of determining such estate or interest and quieting the title to such real estate."

The bill alleges that the plaintiff is the owner in fee simple and entitled to the possession of the real property described. It then sets forth the origin of his title, particularly specifying the deeds by which it was obtained, and alleges that the defendant claims an adverse estate or interest in the premises;

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