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the note in good faith before maturity, or that Twining had anything to do with, or indeed knew of, its discount. Now in Willard v. Denise, 50 N. J. Eq. 482, 26 Atl. 29, 35 Am. St. Rep. 788, it is held that to visit a bank with knowledge of its officer, gained in another relation, two things are necessary: First, possession by the agent of pertinent information; and, second, such agent's participation in the discount or purchase on behalf of the corporation. In view of that case and of First National Bank v. Christopher, 40 N. J. Law, 439, 29 Am. Rep. 262, and Barnes v. Trenton Gaslight Co., 27 N. J. Eq. 33, we hold the trust company was not visited with the knowledge of its president, Twining, and was, therefore, an innocent purchaser.

The remaining question relates to a dispute as to whether the trust company paid a certain check of the Fraser Mountain Copper Company, and charged that company with such payment. The plaintiff in error contends there was evidence tending to show that the sum of $6,678.81 (being the amount for which the check is alleged to have been given) was, after February, 1905, fraudulently entered as a debit item in the account of the Fraser Mountain Copper Company, and that the trial court erred in not submitting that evidence to the jury on the question of alleged fraud. Now such question of fraud rests wholly on the testimony of Percival Kroehl, who says he examined the ledger account of the Fraser Mountain Copper Company in February, 1905; that the foregoing item of $6,678.81 was not in it at that time, and that he then made a copy of the account which shows that fact. An examination of the proofs shows to a demonstration that he overlooked that item in making his copy. Without going into a full analysis, it suffices to say that Kroehl's copy shows a credit balance of $184.02 when he made it. Now that balance cannot be obtained from the items in his copy unless the item of $6,678.81 is placed in the debit column. When to this is added the uncontradicted testimony of the accountant of the banking department of the state of New Jersey that he examined the books in February, 1903, and not only then found the item in the account, but that he found it also in a check list kept by the trust company, it conclusively appears that the item had been paid on the check above mentioned. There being no evidence upon which the court could have sustained a verdict in favor of the defendant, direction to find in favor of the plaintiff was not error.

Randall v. Baltimore & Ohio R. R. Co., 109 U. S. 478, 3 Sup. Ct. 322, 27 L. Ed. 1003.

The judgment is affirmed.


Knowledge or Notice Acquired by Officer, or Agent of Bank, in
Private Business or Outside Scope of Duties, as Affecting

Its Liability.

I. IN GENERAL. [a] (U. S. 1898) A president of a national bank has no power, in the ordinary course of business, to certify to the fidelity or integrity of the cashier for the purpose of enabling him to procure a bond insuring his tidelity: iud hence the bank cannot be deemed, merely by virtue of the president's relation to it, to have any knowledge of the giving by him of such certificate.-American Surety Co. of New York v. Pauly, 170 U. S. 133, 42 L. Ed. 977, 18 Sup. Ct. 552.

[b] (Md. 1903) Notice to a director of a banking corporation privately, or acquired by him generally through channels open to all persons, and which he does not communicate to his associates in the management of the corporation, is not binding on the same.—Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88.

[C] (Mo. 1898) Knowledge of the cashier of a bank, obtained by reason of his interest, and connection with other parties, but not obtained in the performance of any duty he owed to the bank, is not notice to the bank.-National Bank of Commerce v. Fitze, 76 Mo. App. 356.

[d] (N. Y. 1833) Notice to a bank officer binds the bank only when it is the duty of such officer to act on the information, or transmit it to the bank.Fulton Bank v. New York & Sharon Canal Co., 4 Paige, 127.

[e] (N. Y. 1841) Notice of the dissolution of a firm with which bank has business relations, where published in a newspaper, and accidentally reaching a director, who has no power to act for the bank except in conjunction with others, is not equivalent to actual notice to the bank. National Bank v. Norton, 1 Hill, 572.

[f] (N. Y. 1842) Notice to a bank director, or knowledge obtained by him wbile officially not engaged in the business of the bank, will not affect the bank.–Bank of United States v. Davis, 2 Hill, 452.

[g] (N. Y. 1867) Notice to a director of a bank as an individual, and not acting as such director, cannot operate to the prejudice of the bank.-Westfield Bank v. Cornen, 37 N. Y. 320, 93 Am. Dec. 573.

[h] (Pa. 1840) Knowledge of a material fact communicated by a bank director to the board at a regular meeting is notice to the bank.-Bank of Pittsburgh v. Whitehead, 10 Watts, 397, 36 Am. Dec. 186.

[i] (Pa. 1848) Notice to a bank director, not being an organ of communication with the corporation, is not notice to the corporation, though he is present when the corporate act is afterwards done which is sought to be affected by the notice.—Custer v. Tompkins County Bank, 9 Pa. (9 Barr) 27.

[j] (Tenn. 1843) Where notice of the dissolution of a firm is communicated to a bank director for the purpose of being communicated to the board of directors, or where he is called upon to act as a director in a transaction affecting the interests of the members of the dissolved firm, he is bound to communicate that knowledge to the bank, and, if he do not, the bank is by law charged with notice of the facts so withheld.—Union Bank v. Campbell, 23 Tenn. (4 Humph.) 394.

[k] (Tenn. 1901) Notice acquired by the president in a private transaction is not chargeable to the bank.-Smith v. Carmack, 64 S. W. 372.

[1] (Wash. 1893) Notice of facts concerning transactions which it is the duty of the cashier of a bank to conduct is not binding on the bank when received by the president in conducting business of another company, of which the president was director, and which business was in no way connected with the bank.-Washington Nat. Bank v. Pierce, 6 Wash. 491, 33 Pac. 972, 36 Am. St. Rep. 174.

[m] (Wis. 1896) On an issue whether the plaintiff bank had knowledge of the preference of a creditor of its debtor, it was proper to charge that the bank was not chargeable with knowledge of its directors acting individually, but that the jury might consider the knowledge of the directors as tending to prove knowledge on the part of the bank.-Continental Nat. Bank v. McGeoch, 92 Wis. 286, 66 N. W. 606.

II. DISCOUNTS. [a] Where an officer or director of a bank is also an officer of a corporation discounting a note at the bank, his knowledge, acquired in the latter capacity, is not chargeable to the bank. -(Mass. 18990) Corcoran v. Snow Cattle Co., 151 Mass. 74, 23 N. E. 727;

(Minn, 1881) First Nat. Bank v. Loyhed, 28 Minn. 396, 10 N. W. 421;
(Mo. 1894) Benton v. German-American Nat. Bank, 122 Mo. 332, 26 S.

W. 975;
(N. C. 1892) Commercial Bank v. Burgwyn, 110 N. C. 267, 14 S. E. 623,

17 L, R. A, 326;

(N. Y. 1893) Casco Nat. Bank v. Clark, 139 N. Y. 307, 34 N. E. 908, 36

Am. St. Rep. 705, affirming (1892) 64 Hun, 634, 18 N. Y. Supp. 887;

(Pa. 1886) Wilson v. Second Nat. Bank, 7 Atl. 145. CONTRA, see

(Neb. 1887) First Nat. Bank v. Erickson, 20 Neb. 580, 31 N. W. 387;

(N. M. 1895) Oak Grove & Sierra Verde Cattle Co. v. Foster, 41 Pac. 522. [b] Where a person having a note discounted at a bank for his personal benefit is an officer of the bank, the bank is charged with his knowledge of defenses to it. -(U. S. 1894) First Nat. Bank v. Blake (C. C.) 60 Fed. 78; (Mich. 1880) Tilden v. Barnard, 43 Mich. 376, 5 N. W. 420, 38 Am. Rep.

197; (N. C. 1892) Le Duc v. Moore, 111 N. C. 516, 15 S. E. 888; (S. D. 1893) Black Hills Nat. Bank v. Kellogg, 4 S. D. 312, 56 N. W. 1071;

(1895) Taylor v. National Bank, 6 S. D. 511, 62 N. W. 99. CONTRA, see

(Mass. 1894) First Nat. Bank v. Babbidge, 160 Mass. 563, 36 N. E. 462; (Mo. 1892) National Bank v. Lovitt, 114 Mo. 519, 21 S. W. 825, 35 Am.

St. Rep. 770; (Neb. 1894) Buffalo County Nat. Bank v. Sharpe, 40 Neb. 123, 58 N. W.

734; (N. Y. 1828) City Bank v. Barnard, 1 Hall, 70. [c] Where a director of a bank is a member of a firm discounting a note at the bank, his knowledge in respect to the note, not actually communicated to other officers or directors, does not charge the bank. -(N. J. 1878) First Nat. Bank v. Christopher, 40 N. J. Law (11 Vroom)

435, 29 Am. Rep. 262; (N. Y. 1880) Atlantic State Bank v. Savery, 82 N. Y. 291, affirming (1879)

18 Hun, 36. [d] (U. S. 1897) Knowledge by a member of a firm of the true consideration of a certificate of deposit, which the firm discounted at a bank in payment of individual notes of one of its members, and which had been negligently altered in making out a duplicate certificate, held to be imputable to the bank, where the other member of the firm was its president, and, as such, acted as the sole representative of the bank in accepting the certificate. 74 Fed. 1000 (1896) atfirmed.-Niblack v. Cosler, 80 Fed. 596, 26 C. C. A. 16.

[e] (U. S. 1898) That the president of a corporation for which a bank discounted notes, in the ordinary and usual course of its business, was vice president of the bank, and that the secretary, who represented the corporation in the transaction, was also a director of the bank, do not charge the bank with notice of a secret infirmity in one of such notes, where neither of such officers represented the bank in the transaction.—Holm v. Atlas Nat. Bank, 84 Fed. 119, 28 C. C. A. 297.

[f] (U. S. 1881) Where a bank director is also president of a railroad company, his knowledge, in respect to notes discounted at the bank by the railroad company, is not chargeable to the bank, where he refused to take any part in the proceedings of the discount committee.—Waynesville Nat. Bank v. irons (C. C.) 8 Fed. 1.

[g] (U. S. 1882) Where a bank discounts a note for a director, he not being present, it is not charged with his knowledge of antecedent illegalities.—Third Nat. Bank v. Harrison (C. C.) 10 Fed. 243.

[b] (Conn. 1857) The knowledge of a director of a bank, as to the object for which certain bills of exchange were delivered to a party applying to the bank for a discount thereof, such director not being present at the meeting of the directors at which such application was made and such bills discounted, and not having communicated his knowledge to any other director or officer of the bank, is not to be regarded as notice to the bank.-Farmers' & Citizens' Bank v. 'Payne, 25 Conn. 444, 68 Am. Dec. 362.

[i] (Ga. 1895) Where the president and cashier of a bank, being also members of a partnership composed of themselves and another person, to the capital stock of which they had, under the partnership articles, agreed to contribute a given sum, without the knowledge or consent of the other partner executed and delivered to the bank a note in the name of the partnership, for the purpose of raising the money they had agreed to pay into the partnership business, the bank was affected with notice that the transaction was for the private benefit alone of the two parties raising the money, and hence could not hold the partnership itself, nor the remaining partner, liable on the note. -Brobston v. Penniman, 97 Ga. 527, 25 S. E. 350.

[j] (Ga. 1901) Notice or knowledge of failure of consideration of a nego. tiable note, which the director of a bank sells to it before the maturity of the paper, is not imputable to the bank, when in the transaction the seller did not act for it at all, but exclusively for himself, and the bank was represented by another of its officials, who alone acted for it.-English-American Loan & Trust Co. v. Heirs, 112 Ga. 823, 38 S. E. 103.

[k] (La. 1858) Where a note is discounted by a bank, at the instance of a director, who knows, but fails to disclose, a condition on which it was given, the bank will not be considered cognizant of the condition.--Louisiana State Bank v. Senecal, 13 La, 525.

[1] (Mass.) The circumstance that an indorser of a discounted note was a director in the bank by which it was discounted will not be deemed constructive notice to the bank that the note was made for his accommodation.—(1837) Commercial Bank v. Cunningham, 41 Mass. (24 Pick.) 270, 35 Am. Dec. 322; (1839) Washington Bank v. Lewis, 39 Mass. (22 Pick.) 24.

[m] (Mass. 1877) Although the mere fact that a director knew of fraud or illegality in the inception of a note discounted by his bank will not prevent the bank from recovering thereon, yet, if he also acts for the bank in discounting the note, the bank is affected by his knowledge.- National Security Bank v. Cushman, 121 Mass. 490.

[n] (Mich. 1882) The fact that one who recommends to the managing officers of a bank to discount certain negotiable paper is a director of the bank does not charge the bank with knowledge which the director possessed. Shaw v. Clark, 49 Mich. 384, 13 N. W. 786, 43 Am. Rep. 474.

[0] (Mich. 1902) Where a bank purchased a note from a corporation which had received it without consideration, the fact that its cashier, who discounted the note after consultation with the directors, was the president of such corporation, and knew all the facts, did not bind the bank with notice of the infirmities.—People's Sav. Bank v. Hine, 131 Mich. 181, 91 N. W. 130.

[p] (Mo. 1882) Where a bank director procures a note on which he is indorser to be discounted for his benefit at a bank, his knowledge of illegality in the consideration does not charge the bank.Third Nat. Bank v. Tinsley, 11 Mo. App. 498.

[9] (N. J. 1878) A bank discounting a note before maturity is not chargeable with knowledge of illegality or want of consideration acquired by one of its directors in other than his official capacity, if such director did not act with the board in making the discount.–First Nat. Bank v. Christopher, 40 N. J. Law (11 Vroom) 435.

[r] (N. Y. 1893) To charge a bank discounting a note with the president's knowledge of equities between the parties, it is necessary that the knowledge should have come to him in his official capacity.- Merchants' Nat. Bank v. Clark, 139 N. Y. 314, 34 N. E. 910, 36 Am. St. Rep. 710.

[s] (Ohio, 1857) Where the payee of a note happens to be a director of the bank that discounts the note for his benefit, without notice of the maker's claim for recoupment, the bank can recover as an innocent bona fide holder without notice. The private knowledge of an officer is not the knowledge of the bank.-Loomis v. Eagle Bank of Rochester, 1 Disn. 28).

[t] (R. I. 1905) D., who was president of a trust company, was also the controlling stockholder in a manufacturing corporation and the principal partner of D. & Co., a firm acting as the corporation's selling agent. At D.'s dictation, the president and treasurer of the corporation drew drafts on D. & Co., which were accepted by that firm and discounted at D.'s instance by the trust company. Just prior to the discount, the president of the corporation, at D.'s instance, opened an account with the trust company in the name of the corporation, and on the day before the discount was made two checks were drawn on the trust company by the corporation, payable to D. & Co., and cashed through another New York bank, the drafts being discounted to meet the checks. The discounts made by the trust company were authorized by D. under a provision of the trust company's by-laws declaring that the president generally might make investments between meetings of the excutive committee, reporting the transactions to the committee on the succeeding day, and, after the discounts were made, the minutes showed the approval of loans made by the trust company. Held, that the trust company was thereby charged with knowledge that the discounts were part of a fraudulent scheme on the part of its president to obtain money for his individual purposes.—Cook V. American Tubing & Webbing Co., 28 R. I. 41, 65 Atl. 641, 9 L. R. A. (N. S.) 193.

[u] (S. C. 1881) A manufacturing company having sold out all its property, thereby determining the agency of its officers, a bank, the president of which was also a director of the corporation, was bound by the legal effect of its president's knowledge in receiving a note executed to it by the officers of the corporation after the sale.—Union Bank v. Wando Min. & Mfg. Co., 17 S. C. 361.

[v] (S. D. 1897) Where a partner sells to a bank of which he is cashier a note due the firm, and the bank acts wholly through its discount committee, of which he is not a member, it is not affected with knowledge possessed by him of intirmities in the note.- National Bank of Commerce y. Feeney, 9 S. D. 550, 70 N. W. 874, 46 L. R. A. 732.

[w] (Tex. 1906) A bank, purchasing a note subject to certain defenses in the hands of the payee, is not bound by the knowledge or information of such defenses that may have come to its officers at a time when they were not engaged in its business, but when they were acting for themselves individually.-Grayson County Nat. Bank v. Hall, 91 S. W. 807.

[x] (Vt. 1898) Where a bank director and a cashier executed a note as makers, the director being in fact only a surety for the cashier, who obtained a loan on it from the bank, without any other bank official having knowledge of the suretyship, the director was liable as principal, since knowledge to him and the cashier, in such case, was not knowledge to the bank.-First Nat. Bank v. Briggs' Assignees, 70 Vt. 594, 41 Atl. 580.

III. DEPOSITS OF MONEYS OR BONDS. [a] (Ky. 1890) A bank duly selected as a depository of money collected by way of taxes to satisfy county bonds issued in aid of a railroad company cannot be held responsible for money which it pavs out by order of the committee having charge of the fund on the ground that an excess of bonds has been issued, in the absence of fraud or collusion between it and the committee, although the president of the bank was the president of the railroad company, and one of the committee was cashier of the bank, and secretary of the railroad company.- Deposit Bank of Owensboro v. Daviess County Court, 12 S. W. 930, 13 S. W. 101, 11 Ky. Law Rep. 681.

[b] (N. Y. 1879) Plaintiff's husband took a bond of hers and her bank book to the cashier of a bank. The cashier put the bond in the bank safe, and wrote on plaintiff's bank book a memorandum showing a receipt of the bond from plaintiff. Held, that the bank could not claim that the cashier was acting in his individual capacity alone, and that the bank bad no notice of plaintiff's title.--Zugner v. Best, 44 N. Y. Super. Ct. (12 Jones & S.) 393.

IV. COLLATERAL. [a] (Mass. 1839) Where one of the directors of a bank obtained possession of a note under the pretense of getting it discounted for the maker, and pledged it to the bank for a loan to himself, and to secure a prior existing debt due from such director, it was held that, as he did not act in his capacity of a director in procuring the discount and making the pledge, the bank was not affected by his knowledge of the circumstances under which he received the note, and might recover against the maker the amount of the whole note, provided it did not exceed the amount of the money advanced and the prior debt.-Washington Bank v. Lewis, 39 Mass. (22 Pick.) 24.

[b] (Mass. 1885) The fact that one who pledged to a bank, as security for a loan to him, goods consigned to him for sale, was a director of such bauk,

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