Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/228

 § 243.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. with instructions received from those who have the right to control its operations. 1 § 242. In concluding the discussion of the powers of cashiers, it will be convenient to consider the liability of banks Certifica. on checks certified by the cashier, or, as nowadays is ti,,n i,f checks. more usual, by the paying teller. 2 § 243. The leading case on the power of a cashier to certify checks is Merchants' Bank v. State Bank. 3 That case decided that if a cashier is shown to have frequently pledged in writing the credit of his bank for large amounts in the usual course of business, with the knowledge of the directors — borrowing and lending its money, and buying and selling exchange — doing all this usually on the cashier's own checks, though sometimes by certificates of deposit, and sometimes by memoranda, the trans- actions being uniformly made on the faith of the implied powers of the cashier, without inquiry as to special authorization, and such is shown to be the usage of other banks, this is evidence from which a jury may infer that the cashier is authorized to pledge the bank's credit by certifying a check to be " good ; " even though it is not shown that any cashier of any bank in the place where the transaction occurred ever made such a cer- tification. In this case the certified check was given by the cashier of the defendant bank to the cashier of the plaintiff bank, on receipt by the defendant's cashier from the plaintiffs cashier of the equivalent of the check in gold. Whether the gold actually went into the defendant bank did not appear; but the plaintiff bank acted in entire good faith, and the cir- cumstances of the transaction warranted the assumption that the gold was destined for the defendant bank. Giving the opin- ion of the majority of the court, Justice Swayne said : 4 "The cashier is the executive officer, through whom the whole finan- cial operations of the bank are conducted. He receives and i Martin v. Webb, 110 U. S. 71, which held that the cancellation by the cashier of trust deeds belonging to the hank, without receiving for it payment in full, bound the bank un- der the circumstances. A cashier has no authority to assign discount- ed bills and notes to a depositor in 208 payment of his deposit. Lamb v. Cecil, 25 W. Va. 288. 2 The liability of banks for special deposits and for the frauds or felon- ies of their cashiers regarding the same, is discussed in §§ 161, 337. 3 10 Wall. 604.
 * 10 Wall. 650.