of the bank requiring payments made and received to be examined at the time. A dispute between the depositor and bank, as to the correctness of the entry, raises a question of fact for the jury. A depositor owes no duty to a bank which requires him to examine his bank-book or vouchers, with a view to the detection of forgeries of his name. He has a right to assume that the bank, before paying his checks, will ascertain the genuineness of his signature.9

1 See Sullivan v. Lewiston Inst. for Savings, 56 Me. 507; Schoenwald v. Metrop. Sav. Bank, 57 N. Y. 418; post, § 229.

2 Asher r. Park Bank, 7 Alb. L. J. 43; Shaw v. Dartnall, 6 Baru. & C. 57; Commercial Bank v. Rhind, 1 Macq. 643.

3 Shaw v. Pieton. 4 Barn. & C. 715.

4 Mechanics' etc. Bank r. Smith, 19 Johns. 115; and see Godin v. Bank of Commonw. 6 Duer, 76.

5 Mechanics' etc. Bank v. Smith, 19 Johns. 115; and see First Nat. Bank v. Haight, 55 III. 191.

6 Mechanics' etc. Bank v. Smith, 19 Johns. 115; and compare Galla tin v. Bradford, 1 Bibb, 209; Seneca County Bank v. Lamb, 26 Barb. 595. 7 Snead v. Williams, 9 L. T. N. S. 115.

8 Weisser v. Denison, 10 N. Y. 68.

9 Welsh v. German American Bank, 73 N. Y. 424; Salt Springs Bank r. Syracuse Sav. Inst. 62 Barb. 101; and see § 224, ante. That a depositor has a right to inspect the books of the bank on proper occasions: see Union Bank v. Knapp, 3 Pick 96. Compare Hardy v. Veasey, Law R. 3 Ex. 107.

- Reasonable and

§ 228. Usages and customs. established usages and customs of banks enter into and constitute a part of contracts made with them, and must have due weight in expounding such contracts; but the usage or custom must be so far known to the party to be affected by it, as to render it probable that the contract was made with reference to it. To give a usage of a bank the force of law requires an acquiescence and notoriety, from which an inference may be drawn that it is known to the public, and especially to those who do business at the bank. Banking usages will not be judicially noticed by the courts, but must be proved, excepting, perhaps, the usage of "banking hours." 5 But the usage of banks generally, or of an individual bank, may be

11

proved by parol testimony; and any witnesses who actually know of the existence of the usage, as a matter of fact, are competent to testify to it. A single case, though insufficient to establish a general usage of a bank, is, if known to persons dealing with the bank, sufficient notice to them of the existence of a usage already established.9 But the custom of a bank to take notes signed by the promisors, without a distinction thereon as to who is principal and who surety, will not bind a surety, known by the bank to be such, after it has extended the time of payment without the surety's consent, although the surety had knowledge of the custom.10 A by-law is neither a usage, nor proof of one, and cannot affect the rights or interest of third persons.12 Hence, a by-law of a bank, which provides that payments made and received must be examined at the time, does not prevent a party dealing with the bank from afterward showing a mistake in his account. 13 And a custom of banks not to correct mistakes in the receipt or payment of money, unless discovered before the party leaves the room, is held to be illegal and void. 14 So of a custom to pay only half of a half bank-note.15 The usage of the bank's notary is not to be deemed the usage of the bank; 16 and the usage by a bank teller to issue certificates of deposit is not proof of a usage to certify checks.17 The custom of a bank is no evidence to establish a contract where an express agreement would be necessary; 18 but it may be proved for the purpose of interpreting the contract.19

1 Smith v. Whiting, 12 Mass. 6: Neiffer v. Bank of Nashville, 1 Head, 162; Curtis v. Leavitt, 15 N. Y. 9, 168; Hartford Bank v. Stedman, 3 Conn. 489; Warren Bank v. Suffolk Bank, 10 Cush. 582.

2 Pierce v. Butler, 14 Mass. 303; Walls v. Bailey, 49 N. Y. 464; 10 Am. R. 407; Sipperly v. Stewart, 50 Barb. 62; Farmers' etc. Nat. Bank v. Sprague, 52 N. Y. 605; Mills v. Bank of U. S. 11 Wheat. 431.

3 Adams v. Otterback, 15 How. 539, 545; and see Marine Rank of Chicago v. Rushmore, 28 Ill. 463.

4 Planters' Bank v. Farmers' etc. Bank, 8 Gill & J. 449. Compare Citizens' Bank v. Grafflin, 31 Md. 507.

5 See Hare v. Henty, 10 Com. B. N. S. 65; Par er v. Gordon, 7 East, 388; Salt Springs etc. Bank v. Burton, 58 N. Y. 430.

6 Mills v. Bank of U. S. 11 Wheat. 431; Renner v. Bank of Colum. bia, 9 id. 581.

7 Griffin r. Rice, 1 Hilt. 184.

8 Duvall v. Farmers' Bank, 9 Gill & J. 31.

9 Dorchester etc. Bank v. New England Bank, 1 Cush. 177.

10 Lime Rock Bank v. Mallett, 42 Me. 349.

11 Piscataqua Exchange Bank v. Carter, 20 N. H. 246; Central Bank v. Davis, 19 Pick. 373.

12 Mechanics' etc. Bank v. Smith, 19 Johns. 115; and see Samuels v. Central etc. Exp. Co. McCahon, 214.

13 Mechanics' etc. Bank v. Smith, 19 Johns. 115.

14 Gallatin v. Bradford, 1 Bibb, 209.

15 Allen v. State Bank, 1 Dev. & B. 3.

16 Bank of Alexandria v. Deneale, 2 Cranch C. C. 488.

17 Mussey v. Eagle Bank, 9 Metc. 306. Compare Mechanics' Bank v. Butchers' etc. Bank, 16 N. Y. 125.

18 Harper v. Calhoun, 8 Miss. 203; and see Marine Bank of Chicago . Chandler, 27 Ill. 525.

19 Jones v. Fales, 4 Mass. 245.

§ 229. Savings banks.-The ordinary functions of a savings bank are to receive deposits of money, invest them for the security of the depositors, and repay them with interest.1 Such an institution is said to be a general or public trustee, and as such, it is subject to the jurisdiction of the courts over trusts.2 But it is held not to be a benevolent or charitable society within the meaning of a statute relating to such societies. It is unlawful for a savvings bank to prosecute business as a bank of discount,4 without being expressly empowered by statute to do so.5 Savings banks having a capital stock, or which transact any other business than receiving deposits, to be loaned or invested for the depositor's sole benefit, may be taxed under the internal revenue laws. And the usual entry of a deposit in the pass-book of a depositor, or of a payment to him, is held to be a certificate of deposit, or a check or draft, and so liable to a tax imposed by law on deposits in banks. A depositor in a savings bank may maintain an action against the corporation to reclaim his deposits. And a trustee of a savings bank is liable at common law to the corporation for a misapplication of the funds of the bank; and a receiver can enforce such

liability.10 If part of the funds on deposit are lost, what remain belong to all the depositors proportionately." A by-law, assented to by the depositors, that the pass-book of each shall be transferable to order, does not render such pass-book a negotiable instrument, and especially as to third parties. 12 But a certificate of deposit issued by a savings bank, and payable to the depositor or order, is a negotiable instrument 18 In making payments to persons who present a depositor's book, the bank is responsible only for the exercise of reasonable care and diligence; and if the officers of the bank, using such care and diligence, make a payment upon presentation of a book by one apparently in the lawful possession of it, as owner, the true depositor is bound by the payment. 15 A regulation that, on repayment of deposits, the passbook shall be produced, is not unreasonable; 16 subject, however, to the qualification that if the depositor makes proof of the loss or destruction of the book, he will be entitled to his money on demand. 17 A mere temporary suspension of payment by a savings bank will not be deemed an absolute cause of forfeiture; 18 but it is other. wise as to a fradulent suspension of payment. 19 Managers of a savings bank have no right to profits, as such.20 1 West's Appeal, 64 Pa. St. 186; Bank for Savings v. Collector, Wall. 495; and see Beaver v. McGrath, 50 Pa. St. 479.

2 Matter of Newark Sav. Inst. 28 N. J. Eq. 552.

3 West's Appeal, 64 Pa. St. 186; Sneren v. Mendenhall, 23 Minn. 92; and see People v. Nelson, 46 N. Y. 477.

4 Re Jaycox, 12 Blachf. 209; and see Pratt v. Short, 79 N. Y. 437. 5 See Pape v. Capitol Bank of Topeka, 20 Kan. 440.

6 Oulton v. Sav. Inst. 17 Wall. 109; and see Bank for Savings . Collector, 3 id. 495; Dollar Sav. Bank v. United States, 19 id. 227.

7 Oulton v. Sav. Inst. 17 Wall. 109.

8 Jochumsen v. Suffolk Sav. Bank, 3 Allen, 87; and see Makin v. Sav. Inst. 23 Me. 350; Eaves v. People's Sav. Bank, 27 Conn. 229.

9 Van Dyck v. McQuade, 57 How. Pr. 62; and see Hun v. Cary, 82 N. Y. 65.

10 Van Dyck v. McQuade, 57 How. Pr. 62.

11 Bunnell v. Collinsville Sav. Soc. 38 Conn. 203.

12 Witte v. Vincenot, 43 Cal. 325; and see Stewart v. State, 42 Tex

13 Fells Point Sav. Inst. v. Weedon, 18 Md. 320.

14 Hayden v. Brooklyn Sav. Bank, 15 Abb. Pr. N. S. 297; Sullivan v. Lewiston Inst. for Savings, 56 Me. 207.

15 Sullivan v. Lewiston Inst. for Savings, 56 Me. 507; Kelly v. Emi grant etc. Sav. Bank, 2 Daly, 227; Schoenwald v. Metrop. Sav. Bank, 57 N. Y. 418; Levy v. Franklin Sav. Bank, 117 Mass. 448. But compare Appleby v. Erie County Sav. Bank, 62 N. Y. 12. The gift of a savings bank book, with an intention to give the deposits, is a valid gift: Tillinghast v. Wheaton, 8 R. I. 536; 5 Am. R. 621; Camp's Appeal, 36 Coun. 88; 4 Am. R. 39.

16 Warhus v. Bowery Sav. Bank, 21 N. Y. 543.

17 Warhus v. Bowery Sav. Bank, 21 N. Y. 543. Compare Heath v. Sav. Bank, 46 N. H. 78; Levy v. Franklin Sav. Bank, 117 Mass. 448; Wallace v. Lowell Inst. for Savings, 7 Gray, 134.

18 State v. La. Sav. Co. 12 La. An. 568. 19 State v. La. Sav. Co. 12 La. An. 568.

20 Huntington v. Sav. Bank, 96 U. S. 388. Compare Sav. Bank v. New London, 20 Conn. 111.

§ 230. Creation of national banks.-Congress may by appropriate legislation establish a national currency; 1 and to this end the creation of the national banking associations is authorized under the National Banking Law.2 The states cannot exercise control over banks created under this law, nor in any way affect their operation, except to the extent that Congress may see proper to permit; and a state law which forbids the establishment of banking companies, without legislative authority, has no application to national banks created by act of Congress.4 So a bank existing under a special or a general state law may become a national banking association, under the provisions of the National Banking Act,5 without assent or permission from the state; and the state cannot afterward continue to exact a bonus imposed by the charter granted to the bank by the state legislature, for the exercise of the franchise. A national banking association may be formed by any number of persons not less than five. They must enter into articles of association to be signed by them, and filed in the office of the comptroller of the currency; and the certificate of the comp. troller is conclusive as to the validity of the organization of such corporation.10

9

1 Veazie Bank v. Fenno, 8 Wall. 533; Thomp. Nat. B'k Cas. 22; and see Osborn v. Bank of U. S. 9 Wheat. 788; First Nat. Bank v. Lamb, 57 Barb. 429.

BOONE CORP.-29.