bank when the money came in, and left his signature with the bank as the one on which the money should be drawn. The court said that the directors did not in fact intend to give the president any such power, nor had he such power ex officio. The bank officers had no right to presume from Brown's position that he had a right to check out the corporate funds. But there was proved a custom of the New York banks, upon opening an account, whether by corporate or other person, for the one making the deposit, or who was to draw the money, to leave his signature on the signature-book, and that all payments were made on that signature; and as the company was negligent in not sending a deposit ticket or requiring a certificate of deposit in the company's name, the deposit must be considered as made by the president, or under his direction, and the loss must be considered that of the company. The case is very unsatisfactory. The bank credited the amount to the company, and not to the president, and the bank knew that the president had no authority, by virtue of his office, to draw the money, and his authority surely cannot be determined by his own representations.

Suppose the porter had brought the money, telling the bank it was company money, and left his name as the signature on which the money should be paid. Would the bank have been justified in paying? It seems clearly, No. Yet the cases differ in no essential.

The case cited by the court in this Fulton Bank decision to support the above idea, is entirely aside. A husband gave his wife money to deposit for him. She deposited in her own name, leaving her signature as the one upon which the money should be drawn, and the bank had no notice that the money was not hers, nor even that she was married.4 Here the bank knew the money was not that of the president.

In England, the deed of settlement, as they style the corporate charter, often specifically requires all corporate checks to be signed by three directors.

4 Dacy v. New York Chemical Manufacturing Co., 2 Hall's Super. Ct. R. 550.

(e) In whatever form the cheek may be drawn, it would seem at least that it should be clearly signified, by some words.

upon its face, that it is designed to be and is the See Signacheck of the corporation. It is by no means ne- ture, above, $365. cessary that the signature should be that of the corporate name; but the corporate nature of the act must be clearly apparent. In the case of Serrell v. Derbyshire Railroad Company, where the signature of three directors was required, a check was introduced which was signed by three persons, who were as matter of fact directors, but who did not so style themselves on the face of the check. Neither was there upon it any further reference to the corporation than was comprised in the impression of a stamp, which bore the corporate name and a date. It was decided that the check did not sufficiently purport to be the check of the company, and would not bind the company, even in the hands of a bona fide holder for value. It is an unavoidable corollary from this, that the bank having the corporate funds on deposit would not have been protected in paying this check, and could not have had credit for the amount in its account with the corporation, had the money been misapplied. But how far in such a case it would avail the bank to show that, in the usual course of its previous dealing with the corporation, checks drawn in this form had always been cashed without question, no authorities enable us to say. Grant puts it as a quære, but apparently inclines to think that evidence to this effect might materially benefit the bank, provided the transaction were in no part tainted with any approach to bad faith. But the authorities which he cites must be acknowledged not to be very conclusive or satisfactory.

If a bank can show that the money paid out on checks

59 C. B. 811; 19 L. J. C. P. 377.

But see Bickford v. First National Bank of Chicago, 42 Ill. 238; Carpenter v. Farnsworth, 106 Mass. 561.

Grant on Bankers and Banking, p. 35.

* Barber v. Gingell, 3 Esp. 60, which holds that the fact that one has habitually paid forged bills may be shown, as constituting an adoption by him of a similar bill, against which he seeks to set up the forgery. Levy v. Pyne, Car. & M. 453; Bult v. Morrell, 12 Ad. & El. 745.

signed by directors, but not as directors or not in proper form, really went to the corporation, it can charge the same to the company.9

§ 440 A. Successors in Office. When money is officially deposited by an officer or a board of officers, their successors command the deposit.1

In case of

destination.

§ 440 B. Substance cures Form. - If no substantial injustice results, the bank is not liable, though a payment has been made upon an order not in proper form. For expayment on ample, if in any case a check has been paid by the wrong signature, bank bank upon an insufficient signature, yet there is aureleased if the funds thority to support the doctrine that, if the bank can really went to the proper show that the money so paid was actually applied in good faith, and according to the requirements of law, in the due course of the execution of the trust or administration or bankruptcy proceedings, or of the business of the corporation or partnership, from the funds of which it was paid, then the bank, in the absence of any fraud in the transaction, may be held acquitted by the payment. If the cestuis que trustent have really received the sums due to them under the trust; if the heirs at law and legatees of one deceased and the creditors of a bankrupt have in fact received all the moneys to which the amount of the estate entitled them; if the corporators and copartners have really enjoyed the benefit of the money taken from the bank through its application in the necessary course of the conduct of their affairs, - there is no reason why they should be extraneously enriched from money obtained by mulcting the bank in a second disbursement of a sum which it has once paid, though without a due regard to legal formalities. Provided the sum was honestly paid by the bank, was honestly applied, and has reached its proper destination, doubtless the bank is absolved. It may not be a very valuable method of defence for the bank, which is not likely often to have the means of tracing the money, and affording satisfactory legal proof of its use after the payment; but such

In re Norwich Yarn Co., 22 Beav. 143.

1 § 440 A. Lewis v. Park Bank, 42 N. Y. 463; Carman v. Franklin Bank, 61 Md. 467; Tay v. Concord Savings Bank, 60 N. H. 277.

as the privilege may be, it is one which enures to the bank. for whatever it may in any case be worth.1

So if any payment has been ratified by a person who could have objected, such person can thereafter hold the bank to no liability on that account. As where a deposit was Ratification. made in a savings bank to the credit of "Olive J.,

David, Agt.," evidence that at the times of entry of balances the book was in possession sometimes of Olive and sometimes of David, and that part of the money drawn out by David was used in Olive's business, was held to establish a ratification by Olive of the payment to David.2

§ 441. Cases in which Checks have been held Stale. A draft was drawn October 15, 1881, indorsed the same day to E., who held it (there is no explanation of the reason) until March 8, 1882, when he indorsed it to J. Held that the lapse of four months and twenty-three days after issuance made the draft overdue.1

Mem. check

Where a person took a check two and one half years old, and having the abreviation "mem." written on its face, it was held that these facts were sufficient to put him upon his inquiry, and that in default of in- two years quiry the check in his hands was subject to such equitable defences as the drawer could maintain against the payee.2

old stale.

In a case where the payee of a check lost it, and the finder, five days after the date of the check, tendered it to a shopkeeper in payment for goods, and the shopkeeper Five days received it and gave change for it, and then ob- stale.

1 § 440 B. In re Norwich Yarn Co., 22 Beav. 143. The deed of settlement required a check to be signed by three directors. The court said that, though money had been had by the directors on a check not so signed, yet it should be allowed to them in passing their accounts if it had been bona fide applied to the purposes of the company. Can v. Read,

3 Atk. 695; quare, whether payment to one of several assignees of a bankrupt estate, unless he brought the sum to account, would discharge the debtor.

2 Wilcox v. Onondaga County Savings Bank, 40 Hun, 297.

1 § 441. La Due v. First National Bank of Kasson, 31 Minn. 33 (1883). 2 Skillman v. Titus, 3 Vroom, 96.

tained its amount from the banker on whom it was drawn, the payee was allowed to recover the amount from the shopkeeper in an action for money had and received; the court holding that the person who tendered the check had no title, and could transfer none, the check being overdue at the time of the tender.3

Since then, however, in a closely similar case, where the check was taken six days after its date, the court held that no such flaw could be imported into the title by reason of the age of the check; for that the rule, which could not be questioned as to bills of exchange and promissory notes, did not obtain concerning checks.4

§ 442. Checks held not Stale. - It has been held that a person receiving a check several days after it is drawn (ten days in this particular case) receives it without being subject to any equities or defences, as between the drawer and the payee or any previous holder, of which he had no notice at the time when, or before, his title accrued.1

To like effect was the decision given in the case of a check which, in the hands of the payee, might have been avoided as in contravention of the Bankrupt Act, but which an innocent indorsee for value, receiving it fourteen months after its date, was allowed to enforce against the drawer.2

A holder who takes a check six, or seven, or ten days after date, is not subject to equities between prior parties, of which he had no notice.3

A check given on Saturday is not to be considered stale on Monday, for the purpose of affecting the party who takes it

3 Down v. Halling, 4 Barn. & Cr. 330.

4 Rothschilds v. Corney, 9 Barn. & Cr. 389, 391; see Ames v. Meriam, 98 Mass. 294.

1 § 442. Ames v. Meriam, 98 Mass. 294; so Rothschilds v. Corney, 9 Barn. & Cr. 389, 391, where the time was six days; and see Lancaster Bank v. Woodward, 18 Pa. St. 357; Serrell v. Derbyshire Railroad Co., 9 C. B. 811; Poorman v. Mills, 39 Cal. 345; but see, contra, the earlier case of Down v. Halling, 4 id. 330.

2 Cowing v. Altman, 71 N. Y. 435; 79 N. Y. 167; see 1 Th. & C. 494. Ames v. Meriam, 98 Mass. 296, First National Bank v. Harris, 108 Mass. 514; Stewart v. Smith, 17 Ohio St. 82.