it retained the bonds and ratified the cashier's fraud.14 Two cases that are at first glance irreconcilable decide the effect of a cashier's act in receiving money into the bank and then wrongfully passing it out. Thus the president of a bank discounted his notes to another bank, claiming that his bank would not pay the notes. The money was deposited with his bank to the president's credit. It was held that the bank was not liable for the loan, as there was no evidence that it retained the proceeds. It was simply the medium of transference.15 In the other case the vice-president made a loan in the bank's name and the money was put to the bank's credit and the cashier notified. The vice-president thereupon caused the cashier to put the money to his (the vice-president's) credit, and he used the money for private purposes. It was held that the bank having received the money was liable.16 A yet different case was caused by the astute operation of a couple of tellers and a broker. The paying teller of the first bank was short in his accounts. A complaisant broker drew a check on the first bank. The paying teller marked it good. Then the broker took the check to the teller of a second bank, who cashed it. The broker took the money to the paying teller of the first bank, who deposited it amongst his cash. It was held that the second bank could recover the money from the first bank The first bank by retaining the money ratified the fraud.1

§ 110. Admissions of bank officers.- The general rule is that the admission of an agent while he is acting within the scope of his authority and in regard to a matter then depending, or, as it is expressed, dum fervet opus, is binding upon his principal.

An admission that is merely a state

14 Ringling v. Kohn, 4 Mo. App. 59. 15 First Nat. Bank v. Hanover Nat. Bank, 66 Fed. R. 34, 13 C. C. A. 313. Compare Western Nat. Bank v. Armstrong, 152 U. S. 346.

16 Stewart v. Armstrong, 56 Fed. R. 167.

Bank, 10 Gray, 532. Accord, Skinner v. Merchants' Bank, 4 Allen, 290. Contra, Bank of Charleston v. State Bank, 13 Rich. Law, 291, an indefensible ruling.

1 Another statement of the rule which amounts to the same thing

17 Atlantic Bank v. Merchants' is that the admission must be a

ment or narration of a past occurrence is not admissible, because the agent is not authorized to make admissions of that character. But if the agent has authority to act about a particular matter, his statements made while acting as agent in regard to the matter are binding upon the bank, whether the statements are an admission as to a past or a present occurrence. It must be shown that the declaration was in regard to a matter within the legal sphere of action of the corporate agent. It is upon this ground, perhaps, that it has been held that the admission of the genuineness of an indorsement by the bank teller is not binding upon the bank; and the admission by a single director not authorized to act for the bank has been held not to be binding upon the bank. In one case of doubtful authority it has been held that a bank cashier who rented premises for the bank did not bind the bank by admissions as to the purpose of the bank in renting the premises, or as to the terms of a previous renting. It would seem, too, that the statement sought to be considered an admission must have been made to the party relying upon it, or to some one for him; but this statement is not entirely free from doubt. Stockholders are not authorized merely in their capacity as stockpart of the res gesta. Railroad to a signature of a drawer of a Co. v. O'Brien, 119 U. S. 99; Idaho check. Forwarding Co. v. Insurance Co., 8 Utah, 41. Courts sometimes stretch the rule as to what is a part of the res gestæ to an unwarranted length. See Huffcutt on Agency, secs. 136-139.

6 East River Bank v. Hoyt, 41 Barb. 441.

7 Union Banking Co. v. Gillings, 45 Md. 181. Compare Merchants' Bank v. Marine Bank, 3 Gill, 96. 84 Thompson on Corp., sec. 4918;

2 Franklin Bank v. Steward, 37 Carrol v. Railroad Co., 82 Ga. 452. Me. 519.

3 Morse v. Railroad Co., 6 Gray, 450; Malecek v. Tower Grove R. R. Co., 57 Mo. 17.

4 Wyman v. Hallowell Bank, 14 Mass. 58; Salem Bank v. Gloucester Bank, 17 Mass. 21.

5 Walker v. St. Louis Nat. Bank, 5 Mo. App. 214. But the principle

of the decision could not be applied

9 Keysor v. Railroad Co., 66 Mich. 390; but this case is so confused that the reporter of the court despaired of a syllabus. See also Linderberg v. Crescent Mining Co., 9 Utah, 163, which case was a most laughable judicial aberration, and is now overruled. People v. Kessler, 13 Utah, 69.

holders to bind the corporation in any way; but when the stockholders are assembled as the ultimate governing body of the corporation in a stockholders' meeting, an admission made by such a body is under some circumstances an admission binding upon the corporation.10

§ 111. Notice to a bank. This question is frequently of controlling importance in the law of banking, because much of the bank's business consists of dealings with negotiable instruments, or collateral deposited as security. If the bank is that of a private banker or a partnership, notice to the banker himself, or notice to one of the partnership, is, of course, notice to the bank. It is the case of notice to any other individual. This is so in the case of an unincorporated association, even though the particular partner has an interest in the transaction adverse to the partnership.1 But both private bankers and corporations, the former by choice and the latter by necessity, deal with the public through agents. A private banker may receive notice through an agent, the incorporated bank can receive notice only in this way. The rules governing the question in the case of both private bankers and corporations are identical. The first inquiry must always be whether the agent received the notice in the line of his duties in the bank, or whether he obtained his knowledge in his private capacity. At the outset it is necessary to lay down the principle clearly that where the agent receives notice of a fact while he is acting upon the bank's business, being duly authorized to act, he is identical with the corporation, and notice received by the agent under such circumstances is notice once for all to the corporation. Secondly, where an agent acts for the corporation, and the corporation insists upon his act as giving it a right, it adopts his act in toto. It cannot adopt what is favorable to itself and repudiate what is not favorable. If the notice was received by the agent in the line of his duty, the bank will be bound by notice so received. Within this

10 4 Thompson on Corp., sec. 4919. Stockdale v. Keyes, 79 Pa. 251.

2 Ihl v. St. Joseph Bank, 26 Mo. App. 129. If the notice is commu

rule it is held that notice of facts to the general officers of the bank, such as cashier, president, or any active managing officer, received while such officer was acting in regard to the bank's business, is notice of such facts to the bank itself.3 So notice of facts stated in a letter received at the bank and there opened by the head book-keeper, whose duty it was to open and distribute the mail, is imputable to the bank. And notice to a receiving teller as to the disposition of a check received by him is notice to the bank. It is also true that notice of facts to an officer of the bank, whose duty it is to act upon such notice or to transmit it to the bank, will be considered as notice received in the line of his duty, however it was received, unless the officer received the notice not in his official capacity and has an interest in the matter adverse to the bank itself. This proposition leads us to the second consideration, and that is whether the knowledge was received by the officer of the bank in his official capacity. Mere private knowledge of some officer of the bank is not necessarily imputable to the bank. It is imputable to the bank when such officer communicated the knowledge to some officer or officers of the bank, whose duty it was to act upon the notice, or in whose line of duty in the

nicated to the officer for the bank, the bank is bound. National Bank v. Norton, 1 Hill, 578.

3 As to cashier. McLeod v. Fourth Nat. Bank, 20 Fed. R. 225; New Hope Co. v. Phoenix Bank, 3 Comst. 156; Stebbins v. Lardner, 2 S. D. 127; Fall River Bank v. Sturtevant, 12 Cush. 372; Loring v. Brodie, 134 Mass. 453; Gaston v. American Ex. Bank, 29 N. J. Eq. 98; Veasy v. Graham, 17 Ga. 99; Bank of America v. McNeil, 10 Bush, 54. As to president. Bartlett v. Woodbine Bank, 57 Ill. App. 425; Louisiana State Bank v. Senecal, 13 La. 525; McCann v. State, 4 Neb. 324; Porter v. Bank of Rutland, 19 Vt. 410; Merchants' Nat. Bank v. McAnulty,

31 S. W. R. 1091. As to any active managing officer. Second Nat. Bank v. Howe, 40 Minn. 390; Savings Bank v. Holt, 58 Vt. 166; Newport Nat. Bank v. Tweed, 4 Houst. 225; Branch Bank v. Steele, 10 Ala. 915.

4 First Nat. Bank v. Fourth Nat. Bank, 16 U. S. App. 1, 56 Fed. R. 967. 5 Strauss v. Tradesmen's Nat. Bank, 122 N. Y. 379.

6 Fulton Bank v. New York Canal Co., 4 Paige, 127; National Bank v. Norton, 1 Hill, 572; Bartlett v. Woodbine Bank, 57 Ill. App. 425. If received by him officially, his adverse interest is wholly immaterial. See Atlantic State Bank v. Savery, 82 N. Y. 291.

bank the reception of such notice lay. Another statement of the rule would be that the knowledge must be received by the agent in his official capacity. The private knowledge gained by a director, outside of his duties at the bank, unless communicated to the board or to some officer whose duty it was to receive the notice, is not binding upon the bank. But this latter statement must be taken with the limitation that the particular officer who has the private knowledge did not act in the particular transaction in regard to which notice of the facts within such officer's private knowledge is sought to be imputed to the bank. This distinction between the reception of knowledge by the bank officer in the line of his official duty in the bank and the reception of knowledge on his private affairs is one of the greatest importance. In the first instance the knowledge of the agent is imputed to the bank on the principle of identity. The agent, while acting in the line of his duty, is the bank. Notice so received by the bank is absolute. It cannot be disputed; it binds all other officers of the bank in their dealings; 10 it is binding upon all subsequent boards of directors." But in the second case, where the agent's knowledge is gained in his private affairs and wholly outside of the scope of his duties as an officer of the bank, the fact of knowledge on the part of the principal depends upon

7 Merchants' Nat. Bank v. Clark, 139 N. Y. 314; Bank of U. S. v. Davis, 2 Hill, 452; Washington Nat. Bank v. Pierce, 6 Wash. 491; Westfield Bank v. Cornen, 37 N. Y. 320. Goodloe v. Godley, 13 Smedes & M. 233, is a case in accord with the general rule, where agent was not authorized to act.

8 First Nat. Bank v. Christopher, 40 N. J. Law, 435; Farmers' Bank v. Payne, 25 Conn. 444; Shaw v. Clark, 49 Mich. 384; Mercer v. Canonge, 8 La. Ann. 37.

9 Bank of U. S. v. Davis, 2 Hill, 452; National Security Bank v.

Cushman, 121 Mass. 490; Clerk's Sav. Bank v. Thomas, 2 Mo. App. 367. These cases are wrong if they mean to hold that the presumption of notice is absolute. As we will see later on in this section the presumption of the communication of an officer's private knowledge may be rebutted by proof. See Fairfield Sav. Bank v. Chase, 72 Me. 226. Some cases deny this presumption. 10 Gibson v. National Park Bank, 98 N. Y. 87.

11 Merchants' Bank v. Seton, 1 Pet. 299.