Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/223

 PART n.] ACTS WITHIN THE CORPORATE POWERS. [§ 240. of a cash- ier. § 239. Fully as important in his functions as a president is the cashier of a bank or other moneyed corporation. A h. The cashier is the financial officer of the bank, hav- ing, in accordance with general custom, authority to transact its ordinary current business, 1 and in the performance of his duties his acts bind the bank. 2 As Justice Story said, in Wild v. Bank of Passamaquoddy : 3 " The cashier of a bank is, virtute officii, generally intrusted with the notes, securities, and other funds of the bank, and is held out to the world by the bank as its general agent in the negotiation, management, and disposal of them. Prima facie, therefore, he must be deemed to have authority to transfer and indorse negotiable securities held by the bank for its use, and in its behalf. No special au- thority for this purpose is necessary to be proved. If any bank choose to depart from this general course of business, it is cer- tainly at liberty so to do ; but in such case it is incumbent on the bank to show that it has interposed a restriction, and that such restriction is known to those with whom it is in the habit of doing business." 4 § 240. Accordingly, a bank will be liable to an outsider act- ing in good faith, for the contracts as well as for the frauds of its cashier made or committed while acting within the ordinary 1 It is not negligent for a bank to intrust its cashier to select and pay out of his salary all the clerks and other servants employed in the bank- ing room ; no negligence appearing in the selection of the cashier. Smith o. First National Bank, 99 Mass. 605. 2 Lloyd v. West Branch Bank, 15 Pa. St. 172 ; First Nat. Bk. of Bir- mingham v. First Nat. Bk. of New- port, 116 Ala. 520. 3 3 Mason, 505, 506. 4 See, also, State v. Commercial Bank, 14 Miss. 218. That a cashier has authority to transfer and indorse negotiable paper belonging to his bank is undoubted. City Bank v. Perkins, 29 N. Y. 554 ; Hartford Bank v. Barry, 17 Mass. 94. See Caldwell v. Nat. Mohawk Valley Bank, 64 Barb. 333 ; Robb v. Ross County Bank, 41 Barb. 586 ; Burn- ham v. Webster, 19 Me. 234 ; Potter v. Merchants' Bank, 28 N. Y. 641. Cf. Re Assignment of Bank of Ore- gon, 32 Or. 84. Likewise a cashier has general authority to superintend the collection of notes under pro- test. Bank of Pennsylvania v. Reed, 1 Watts & S. 101. Where a vice-president who was also a director, with the knowledge of the president and the cashier, but without notice to the board of direct- ors, guarantees on behalf of the bank the payment of a note belonging to it, the bank, by using the proceeds of the note, renders the act of the vice-president as binding as if ex- pressly authorized. People's Bank ». National Bank, 101 U. S. 181. See, also, Hutchins v. Bank, 128 N. C. 72. 203