Noah Haynes Swayne

“ A natural person may appoint an agent to do what he may do himself. Not so with corporations. They can exercise no powers not delegated, and must use them in the mode prescribed by their charter. He who relies upon a contract as binding upon a corporation, when such contract can be made only by its directors, must show affirmatively not only that the directors made it, but that it is within the scope of their powers and duties. ”

“ The considerations, as to the power of the cashier to enter into contracts by certifying the checks, already suggested, apply with equal force here. The cashier had no authority to make the purchase; none under the act of Congress, none under the by-laws, none under any vote of the directors, none under the oral consent of the directors, or any one of them, none under any practice or any one precedent of his own. There is no evidence that the State Bank ever engaged in the business of buying and selling gold, or so held themselves out to the public. ”

“ Though such presumption may attach to payments made or received by the cashier over the counter of the bank, or other acts within the scope of his ordinary business and duties, it is limited to them. No rule of law is better settled than that a party contracting with a corporation of limited and defined powers, or the servant or agent of such corporation of limited agency, is always put upon his inquiry as to the extent of the power of both principal and agent. ”

“ In view of such proofs, we ask if it ought to be determined that there was no legal competent evidence proper to be submitted to a jury, from which they might infer that, as among the wide powers openly exercised by Smith, the defendants' cashier, in numerous instances and for large amounts, was the authority to purchase exchange, he had or not also intrusted to him the power to purchase gold, and thus to find their verdict for the plaintiffs upon the counts framed upon such purchase? ”

“ Bank checks are not inland bills of exchange, but have many of the properties of such commercial paper; and many of the rules of the law merchant are alike applicable to both. Each is for a specific sum payable in money. In both cases there is a drawer, a drawee, and a payee. Without acceptance, no action can be maintained by the holder upon either against the drawer. The chief points of difference are that a check is always drawn on a bank or banker. ”

“ If the power to borrow money, at all times, for the purposes of the bank, and give notes therefor, can be delegated by the directors to the cashier, the power to purchase exchange and gold, in pursuance of the charter, can be so delegated. Whether the power to delegate to a cashier authority to certify checks exist, has nowhere been settled. ”

“ A bank incurs no greater risk in certifying a check than in giving a certificate of deposit. In well-regulated banks the practice is at once to charge the check to the account of the drawer, to credit it in 'a certified check account,' and when the check is paid to debit that account with the amount. ”

“ The Bank of Columbus, [18] recognizes and affirms as settled law, that the making of a contract involving the payment of money, or the purchase or sale of property, is not within the ordinary business of a cashier, and that if a party relies upon such contract by a cashier, he must show (at the least) a special delegation of power from the directors. ”

“ But a cashier, the offspring of modern commerce, is, as stated by Baron Parke of bill brokers, 'not a character known to the law with certain prescribed duties, but his employment is one that depends entirely on the course of dealing. ”

“ As to conferring such authority on tellers by usage, the power is negatived in Massachusetts, [13] while in New York it is settled that such power may be conferred, [14] and a statute of the United States recognizes certified checks, and makes them in common with the circulation subject of taxation.
Whether the control of the great leading business for which a bank is created, viz., loans and discounts, can be delegated, may be doubted. The prevailing practice known and acted upon by the public, is to apply to a board of directors for discounts. ”

“ The questions which it is our duty to examine are questions of law. None are made upon the pleadings, and it is unnecessary to consider them. It is sufficient to remark, that the declaration is so framed as to meet the case in every legal aspect which it can assume.
On the 26th of February, 1867, Fuller, the plaintiff's cashier, received from the Second National Bank of Boston $200,000 of gold certificates, and paid the bank, upon their delivery, the amount of their face and a premium of 25 per cent. Payment was made in currency and legal tender notes. ”

“ The practice of certifying checks has grown out of the business needs of the country. They enable the holder to keep or convey the amount specified with safety. They enable persons not well acquainted to deal promptly with each other, and they avoid the delay and risks of receiving, counting, and passing from hand to hand large sums of money.
It is computed by a competent authority that the average daily amount of such checks in use in the city of New York, throughout the year, is not less than one hundred millions of dollars. ”

“ As to the defendants' other proposition, that the arrangement between the plaintiffs and Mellen, Ward & Co. must in law be held to be a loan, with a pledge of the gold as security, it is submitted, that if there be any evidence of the amount of their capital stock upon which to rest the averments that if it were a loan, it exceeded the quantum permitted by the 29th section of the National Currency Act, such evidence was for a jury and not for a court. ”

“ The cashier is the executive officer, through whom the whole financial operations of the bank are conducted. He receives and pays out its moneys, collects and pays its debts, and receives and transfers its commercial securities. ”

“ But a like rule of agency applies even to natural persons. Under certain circumstances an authority arises to an agent to do a certain act, but you must show the occurrence of the circumstances before you can count upon his act. ”

“ Where a party deals with a corporation in good faith-the transaction is not ultra vires-and he is unaware of any defect of authority or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. ”

“ Doubtless there exist classes of commercial agencies, whose powers and duties are so fixed and defined by the common law, after ages of judicial proof and investigation, that they are not only no longer the subject of inquiry but cannot be varied and controlled as against the public by proof of special contract limiting those powers. Such are partners, shipmasters, brokers, factors, &c. ”

“ Customs have sprung from the necessities and the convenience of business and prevailed in duration and extent until they acquired the force of law. This mass of our jurisprudence has thus grown, and will continue to grow, by successive accretions. ”

“ The master may sell in case of necessity; the purchaser must show the necessity. The master may give a bill of lading for goods put on board; the holder must show that the goods were on board. So a power to draw and indorse bills for and in the name of the principal will not authorize a drawing or indorsing in his name for the accommodation of thrid persons. ”

“ It is not contended by the plaintiffs that a power to buy may be inferred from an exercise of a power to sell, however frequent that exercise may have been, nor that a power to indorse may be shown from numerous instances of signature as promissor. ”

“ Green v. London Omnibus Co., 7 C. B. N. S. 290; Life and Fire Ins. Co. v. Mechanic Fire Ins. Co., 7 Wendell, 31.↑ Ranger v. The Great Western Railway Co., 5 House of Lords Cases, 86; Thayer v. Boston, 19 Pickering, 511; Frankfort Bank v. Johnson, 24 Maine, 490; Angel and Ames on Corporations, §§ 382, 388.↑ Swan v. The British North Australasian Company, 7 Hurlstone & Norman, 603; Hern v. Nichols, 1 Salkeld, 289.↑ Dezell v. Odell, 3 Hill, 216.↑ Farmers' and Mechanics' Bank of Kent Co. v. Butchers' and Drovers Bank, 16 New York, 133 ”