First National Bank of Lyons v. Ocean National Bank. of an undertaking to act as a depositary of them, for an indefinite time, or for any time beyond that necessary to accomplish the precise agency assumed. It is one thing to act as an agent in the purchase and sale of property, and quite another and a different thing to receive it on deposit and assume the responsibilities of a bailee. The case is also barren of evidence that other banks were in the habit of receiving deposits of a like character and under like circumstances. There was no attempt to prove a general custom or usage upon the subject, even if that could have affected the liability of the defendant, or been given in evidence as tending to prove the authority of the bank officers in the premises. Both the plaintiff and the defendant were banking corporations incorporated pursuant to the act of Congress entitled "An act to provide a National currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June 3, 1864, known as the "National Currency Act," and the officers and agents of each must be assumed to be familiar with the powers of the other, and the general powers and duties of its officers. The governing body of National banks is the board of directors, authorized by section 9 of the act, and such board has the management and control of the affairs of the corporation, and may do and transact any and all business within the limits of the powers conferred by the act of Congress. To the extent of the powers given by the act the directors may bind the corporation, and the shareholders, who are the constituent body; and the shareholders, who are, by section 12, made personally responsible for all contracts, debts and engagements," of the association, to the extent of the amount of their stock therein, in addition to the amount invested in such shares. This responsibility is necessarily limited to such contracts, debts and engagements as may lawfully be made or incurred in the exercise of the corporate powers as limited and prescribed by the act of Congress. The managing officers of corporations formed under the act, those who transact the current business of the association, are appointed by the corporation, which has power to appoint them and define their duties. They are a president, vice-prosident, and a cashier, and such other officers as may be found necessary, but by whatever name known they only possess such powers as are delegated by the governing body, or the corporation, either in terms or by implication. Act, supra, § 8. There is no evidence that the powers and duties of the managing officers First National Bank of Lyons v. Ocean National Bank. of the defendant were specifically defined by any act or resolution of the corporation or the board of directors. It must be assumed, therefore, and the public and those dealing or having business transactions with the bank had the right to assume, that they had and exercised the powers and performed the duties usually devolved upon and performed by persons occupying the same position in other banks, and such as they were in the habit of performing in the transaction of the current and ordinary business of the bank, and within this limit the corporation would be bound by their acts in the absence of proof that their powers were limited or restricted, and that such restriction and limitation was known to the person dealing with them. Story on Agency, § 114, and cases cited in notes. Whatever may be the extraordinary or incidental powers of the corporation under its charter, power to bind the corporation can only be presumed to exist in its executive agents and officers within the scope of its ordinary business and their ordinary duties. Life and Fire Ins. Co. v. Mech. Fire Ins. Co., 7 Wend. 31; Minor v. Mech. Bank of Alexandria, 1 Pet. 46; Hoyt v. Thompson, 1 Seld. 320; Leggett v. N. Y. Manf. Co., Sandf. Ch. 541. The powers of the corporation defendant are banking powers only, with such incidental powers as may be necessary to carry on the business of banking, with the privilege of buying and selling exchange, coin and bullion. This does not necessarily include the business of a safe deposit company, or business of receiving for safe-keeping, and storing for hire, or without compensation, jewelry and valuables, or property of any kind. If the power exists in the corporation as part of its franchise, it is only as an incident of its principal business. The duties of the executive officer of a banking corporation, who is ordinarily the cashier, are very well understood, and while those of the president are not so well defined, he is but the executive agent of the board of directors, to perform such duties as may be devolved upon him, and is not the corporation, and cannot take the place of the governing board, and make contracts or incur liabilities outside of the ordinary business of the bank, without special authority. The corporations formed under the Currency Act are banks of deposit as well as circulation. They are authorized to issue their own notes for circulation, and to receive from others their money and circulate it. Money so received from others is termed a deposit, although it has none of the quali fications of a bailment. There is no trust or promise to re-deliver First National Bank of Lyons v. Ocean National Bank. the same money. By the deposit the money becomes the property of the bank, and the relation of debtor and creditor is created between the depositor and the bank. Commercial Bank of Albany v. Hughes, 17 Wend. 94; Marine Bank v. Fulton Bank, 2 Wall. 252. This is the character of the deposit which, by the Currency Act, the defendant was expressly authorized to receive, and in receiving such a deposit the cashier would be acting within the scope of his authority, and the bank, by his act, would become a debtor to the depositor. The principal attributes of a bank are, the right to issue circulating notes, discount commercial paper, and receive deposits of money. Per SPENCER, J., 15 Johns. 390; N. Y. Firemen's Insurance Co. v. Ely, 2 Cow. 678, 710. The act of Congress under which the plaintiff and defendant became incorporated makes them banking corporations, and confers upon them banking powers, and all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; by obtaining, issuing and circulating notes, according to the provisions of the act. The statutory powers and franchise are entirely coincident with the attributes of banking corporations as defined by the law-merchant. The National banking associations are required, by law, to have on hand, at all times, lawful money to a prescribed amount as a reserve fund; and are permitted to "keep one-half of the lawful money reserve in cash deposits" in the city of New York, but the bonds in controversy were not, and could not have been, deposited with or received by the defendant under this provision of law. Act, supra, §§ 31, 32. The deposit of these bonds cannot be distinguished from a deposit of jewelry or plate, or other valuable property, and was a special transaction not within the ordinary course and business of banking, or necessarily incident to it. If authorized, it added greatly to the risk of loss to the shareholders, without adding to their gains. It was a holding out of greater inducements to burglars and robbers from without, and might prove of greater temptation to dishonesty, on the part of clerks and employees, within the bank. As a business, it could not have been undertaken at the risk and responsibility of the corporation by the executive officers, or without the First National Bank of Lyons v. Ocean National Bank. special authority of the board of directors, and a single transaction. was without the general scope of the powers and duties of the executive officers of the institution. Giblin v. McMullen, L. R., 2 P. C. Cases, 327, was an appeal from the Supreme Court of Victoria. The defendant represented the Union Bank of Australia, and no question was made as to the authority of the manager of the bank to receive the special deposit; and it is expressly said that the railway debentures, which were stolen by the cashier, were placed in the defendant's care by a customer, in the ordinary course of their business as bankers. The case turned upon the liability of the bailee for a theft by the officers of the bank, and the court, following Foster v. Essex Bank, 17 Mass. 479, held the defendant not liable. Foster v. Essex Bank was a special deposit of coin, and the bank was held to be the depositary, rather than the cashier or other officers, although not held liable in the action, on the ground of a general recognition and authorization of the practice by the directors; and PARKER, C. J., places the responsibility of the defendant solely on that ground, and applying the principles of master and servant, and deducing the relation of bailor and bailee, says: "Not so, if the servant secretly, and without the knowledge, express or implied, of the master, he not having authorized or submitted to the practice, receives the goods for such purpose, for no man can be made the bailee of another's property, without his consent; and there must be a contract, express or implied, to induce a liability. The knowledge and permission, expressly found or legally to be presumed in this case, establishes a contract between the parties." Scott v. National Bank of Chester, 72 Penn. St. 471 (post), followed the case last cited, in principle. A case very analogous to, if not in all respects like this in principle, was Lloyd v. West Branch Bank, 15 Penn. St. 172, and it was adjudged that the cashier had no authority to receive, as a special deposit, a sealed package of small notes, issued by a corporation, without authority of law, and that if so received, without the permission of the directors, or their knowledge of any usage or practice to receive such packages on deposit, the law would not imply a contract on the part of the corporation with the depositor for the safe-keeping of the package. COULTER, J., says, that "it was never designed by the provisions of the statute that the bank should be converted into a kind of pawnbroker shop." The case turned upon the point First National Bank of Lyons v. Ocean National Bank. 66 as expressed by the court, that there was no evidence that the bank made any contract with Oliver (the depositor), express or implied." The whole tenor of authority is in favor of holding corporations for the acts of their officers, especially executive officers and general agents within the general scope and apparent sphere of their duties, and not holding them for acts done without special authority in the cases without such general scope and sphere of duty. The cases are all reconcilable and sustainable on this principle and no other. Courts and judges have spoken cautiously on the subject, but the language has been uniform, limiting the responsibility of corporations for the acts of their officers and agents, in the absence of an express authority to do the particular act, to those performed in the discharge of their ordinary duties in the usual course of business, and within the sphere and scope of such duties. Such are presumed to be by authority of and within the knowledge of the directors; and within the rule are included such acts as are shown to have been performed with the knowledge and implied consent of the directors, although out of the line of ordinary duty and usual course of business. The duties of the cashier are well understood, and as recognized judicially are restricted to the care and management of the property and fiscal concerns of the bank, in the conduct of its business as a bank, in the usual and ordinary way. Story on Agency, §§ 114, 115; Badger v. Bank of Cumberland, 26 Me. 428; Merchants' Bank v. State Bank, 10 Wall. 604; Bank of Genesee v. Patchin Bank, 3 Kern. 309. The president and cashier of a bank cannot assign the choses in action of the corporation to its creditors as a security for the payment of a precedent debt, without authority from the board of directors. They can do no act outside of their ordinary duties in the conduct and management of the banking business, unless by authority, either express or implied, from the fact that they have been permitted to do the like acts without objection. Hoyt v. Thompson, 1 Seld. 320. Judge WAYNE, in United States v. City Bank of Columbus, 21 How. (U. S.) 356, says: "The court defines the cashier of the bank to be an executive officer by whom its debts are received and paid, and its securities taken and transferred, and that his acts, to be binding upon a bank, must be done within the ordinary course of his duties. His ordinary duties are to keep all the funds of the bank, its notes, bills and other choses in action, to be used from time to time, for the ordinary and |