Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/224

 § 240.] THE LAW OP PRIVATE CORPORATIONS. [CHAP. VII. scope of the powers and duties pertaining to his office, 1 or within the scope of such further authority as may have been conferred on him by the constitution of the bank, or by the action or acquiescence of the directors or shareholders. 2 Con- sequently, notice to the cashier in regard to the ordinary busi- ness dealings of the bank is notice to it; 3 and it is affected with the knowledge of its cashier who takes a note knowing 1 See e. g., Phillips v. Mercantile Nat. Bank, 140 N. Y. 556. A cashier h;is the implied power to borrow on behalf of his bank and pledge its property to secure the repaymeut of the loan. Coats v. Donnell, 94 N. Y. 168. In order to show a cashier's authority to borrow for his bank, special power from the directors is not essential. His acts in the ordi- nary course of his employmeut are evidence. Ringling v. Kohn, 6 Mo. App. 333; Donnell v. Lewis County Savings Bank, 80 Mo. 165. Sernble contra, West. Nat. Bk. v. Armstrong, 152 U. S. 346; First Nat. Bk. of Corunna v. Michigan City Bk., 8 N. Dak. 608. But see Aldrich v. Chemical Nat. Bk. 176 U. S. 618, distinguishing Western Nat. Bk. v. Armstrong, 152 U. S. 346. The cash- ier of a bank as its executive officer has authority to take such measures as he deems proper for the securing and eventual collection of a debt, and to compromise a debt according to the course of business. Briden- becker ». Lowell, 32 Barb. 9; see Wakefield Bank v. Truesdell, 55 Barb. 602. But see Sandy River Bank v. Merchants', etc., Bank, 1 Biss. 146. The fact that a cashier of a national bank, at the time of receiving a de- posit, makes an agreement that the bank shall invest the same in stocks and bonds, is no defence to an ac- tion to recover the money without interest, even though the agreement was invalid, and the money was in fact appropriated by the cashier. 204 L'Herbette v. Nat. Bk., 162 Mass. 137; see, Hanson v. Heard, 69 N. H. 190. It is, in general, within the au- thority of a cashier to sign a blank transfer on a certificate of stock held by the bank as collateral se- curity, and to deliver the certificate to the pledgor; and thus signing a transfer warrants the genuineness of the certificate, so that a bona fide transferee for value from the fraudu- lent pledgor can hold the bank liable. Matthews v. Massachusetts Nat. Bk. 1 Holmes, 396. So a bank was held liable where a cashier negotiated, through an agent, a certificate of de- posit, although no deposit had been made and the cashier embezzled the proceeds of the transaction. Barnes v. Ontario Bank, 19 N. Y. 152. Com- pare Reynolds u. Kenyon, 43 Barb. 515; Mapes ». Second Nat. Bk., 80 Pa. St. 163; Foster v. Essex Bk., 17 Mass. 479 ; State v. Atherton, 40 Mo. 209; Morris Canal, etc., Co. v. Van Vorst, 21 N. J. L. (1 Zab.) 100; Lor- ing r. Brodie, 134 Mass. 453. 2 Thus, when the cashier has gen- eral charge of stock transfers, his acts in regard thereto bind the hank, which will be liable for his wrong- ful refusal to permit a transfer. Case v. Bank, 100 U. S. 446; see Na- tional Bank v. Watsontown Bank, 105 U. S. 217. Cf. Wing v. Bank, 103 Mich. 565. 3 New Hope, etc., Bridge Co. v. Phoenix Bank, 3 N. Y. 156; Harris v. Am. B. & L. Assn., 122 Ala. 545;