First National Bank of Carlisle v. Graham. they, or their value, according to the form of action adopted, might have been recovered. White v. Franklin Bank, 22 Pick. 181. If the bank had destroyed them or had thrown them. into the street, whereby they were lost to the plaintiff, the liability of the bank would have been the same. To have kept them with gross negligence, whereby the same consequence to the plaintiff was incurred, involved necessarily the same result to the depositary. The only way of escape from liability open to the latter would have been to return the property to the owner or to get rid of its possession otherwise in some lawful way. Gross negligence on the part of a gratuitous bailee, though not a fraud, is in legal effect the same thing. Foster v. Essex Bank, 17 Mass. 479. It is a tort, and an action on the case is the appropriate remedy for such a wrong. In many cases where there is a valid contract, it may be regarded only as inducement and as raising a duty, for the breach of which an action may be brought ex contractu or ex delicto, at the option of the injured party. 1 Ch. Pi. 151. Corporations are liable for every wrong they commit, and in such cases the doctrine of ultra vires has no application. They are also liable for the acts of their servants while such servants are engaged in the business of their principal, in the same manner and to the same extent that individuals are liable under like circumstances. Merchants' Bank v. State Bank, 10 Wall. 645. An action may be maintained against a corporation for its malicious or negligent torts, however foreign they may be to the objects of its creation or beyond its granted powers. It may be used for assault and battery, for fraud and deceit, for false imprisonment, for malicious prosecution, for nuisance and for libel. In certain cases it may be indicted for misfeasance or non-feasance touching duties imposed upon it in which the public are interested. Its offenses may be such as will forfeit its existence. P. W. & B. R. R. Co. v. Quigley, 21 How. 209; 2 Wait's Actions and Defenses, 337, 338, 339; Angell & Ames on Corp., §§ 186, 385; Cooley on Torts, 119, 120. Recurring to the case in hand, it is now well settled that if a bank be accustomed to take such deposits as the one here in ques First National Bank of Carlisle v. Graham. tion, and this is known and acquiesced in by the directors, and the property deposited is lost by the gross carelessness of the bailee, a liability ensues in like manner as if the deposit had been authorized by the terms of the charter. Foster v. Essex Bank, 17 Mass. 479; Lancaster Co. National Bank v. Smith, 62 Penn. St. 47; Scott v. National Bank of Chester Valley, 72 id. 471; s. c., 17 Am. Rep. 711; Thomp. N. B. Cas. 864; First Nat. Bank of Carlisle v. Graham, 79 Penn. St. 106; s. c., 21 Am. Rep. 49; Thomp. N. B. Cas. 875; Turner v. First Nat. Bank of Keokuk, 26 Iowa, 562; Thomp. N. B. Cas. 454; Smith v. First Nat. Bank of Westfield, 99 Mass. 605; Chattahooche Nat. Bank v. Schley, 58 Ga. 369; Thomp. N. B. Cas. 375. The only authorities in direct conflict with these adjudications, to which our attention has been called, are Wiley v. Nat. Bank of Vermont, 47 Vt. 546; s. c., 19 Am. Rep. 122; Thomp. N. B. Cas. 905; and Whitney v. Nat. Bank of Brattleboro, 50 Vt. 389; s. c., 28 Am. Rep. 508. The case first cited (Foster v. Essex Bank) was argued exhaustively by the most eminent counsel of the time and decided by a court of great judicial learning and ability. Their opinion is marked by careful elaboration. The special deposit there was a cask containing gold coin. While it was maintained that the bank would have been liable for its loss by gross negligence, it was held that such negligence in that case had not been shown. Here gross negligence is conclusively established. The depos itor kept an account in the bank. The cashier cut off and collected the coupons and placed the proceeds to her credit. The bonds therefore entered into the legitimate and proper business of the institution. But it is unnecessary to pursue this view of the subject further, because we think there is another ground free from doubt upon which our judgment may be rested. The 46th section of the Banking Act of 1864, re-enacted in the Revised Statutes of the United States, § 5228, declares that after the failure of a National bank to pay its circulating notes, etc., "it shall not be lawful for the association suffering the same to pay out any of its notes, discount any notes or bills, or other First National Bank of Carlisle v. Graham. wise prosecute the business of banking, except to receive and safely keep moneys belonging to it, and to deliver special depos its." This implies clearly that a National bank, as a part of its legitimate business, may receive such "special deposits," and this implication is as effectual as an express declaration of the same thing would have been. United States v. Babbit, 1 Black, 61. The phrase "special deposits," thus used, embraces deposits such as that here in question. Patterson v. Syracuse Nat. Bank, Court of Appeals, New York (recently decided and not yet reported).* In that case it was said, "a reference to the history of banking discloses that the chief, and in some cases the only deposits received by the early banks were special deposits of money, bullion, plate, etc., for safe-keeping and to be specifically returned to the depositor; and such was the character of the business done by the Bank of Venice (the earliest bank) and the old Bank of Amsterdam, and the same business was done by the Goldsmiths of London and the Bank of England, and we know of none of the earlier banks where it was not done." It would undoubtedly be competent for a National bank to receive a special deposit of such securities as those here in question either on a contract of hiring or without reward, and it would be liable for a greater or less degree of negligence accordingly. We do not mean that it could convert itself into a pawnbroker's shop. That subject involves topics alien to the case before us and which in this opinion it is unnecessary to consider. The judgment of the Supreme Court of the Commonwealth of Pennsylvania is affirmed. NOTE BY THE Reporter.— We give below the main portion of the opinion in Whitney v. National Bank, disapproved in the principal case: The case as now presented is substantially the same as before. The only difference between the case as then and now before the court is this: the plaintiff, upon the last trial in the county court, produced several additional witnesses, whose testimony tended to prove that the cashier of the defendant bank was in the habit of receiving special deposits of United States government bonds for safekeeping, and keeping them in the vault of the bank for the benefit of the owners or depositors, without charge to them, and that such habit, or usage, was known to the directors, and not objected to by them. The defendant is a banking corpora tion, incorporated pursuant to the act of Congress, entitled 'An Act to pro* Post. First National Bank of Carlisle v. Graham. vide a National Currency,' etc., approved June 3, 1864. It was conceded by the learned counsel for the defendant, that if the bank had the power and authority conferred upon it by the act of Congress to become a party to the alleged contract of bailment as depositary, then by the act of its cashier, in receiving and keeping the bonds in question in the manner it was done in this case, the bank became subject to the duties and liabilities of that relation to the plaintiff. This proposition was not questioned in Wiley v. Bank, supra. WHEELER, J., who delivered the opinion of the court in that case, says: 'There is no controversy, and could not probably be any, but that if the taking of these bonds, to keep, as they were taken by the cashier, was within the scope of the corporate business of the bank, then the bank did become the depositary of them and subject to the liabilities of that relation.' But we have no occasion to consider or decide this question. The court held, when this case was before them in 1875, that the acceptance of such a bailment was beyond the scope of the corporate powers of the bank, and hence the defendant was not subject to the liabilities of a depositary of the bonds in question. It therefore follows that the usage of the cashier, with the approval of the directors, could not confer upon the bank this power. The directors are trustees of the shareholders, and their authority is limited by the act of Congress in question, to such powers as are thereby directly conferred upon them, and such, in addition thereto, as are necessarily incidental to the business of banking. Although this action is in form ex delicto, so far as it rests upon contract, it is governed by the same rules as though ex contractu; and it was so held in Wiley v. Bank, supra." the judgment of the county court. But a very able and ingenious argument has been made by the learned counsel for the plaintiff, to show that Wiley v. Bank, supra, ought to be overruled; and numerous cases have been cited which, it is claimed, are in conflict with it; among which are Foster v. Essex Bank, 17 Mass. 479; Coffee v. Bank, 46 Mo. 140; s. c., 2 Am. Rep. 488; Thomp. N. B. Cas. 644; Leach v. Hale, 31 Iowa, 69; s. c., 7 Am. Rep. 112; Scott v. Nat. Bank of Chester, 72 Penu. St. 471; s. c., 13 Am. Rep. 711; Thomp. N. B. Cas. 864; First National Bank v. Graham, 79 Penn. St. 106; s. c., 21 Am. Rep. 49; Thomp. N. B. Cas. 875; and Chattahooche National Bank v. Schley, 58 Ga. 369; s. c., Thomp. N. B. Cas. 379. But owing to the importance of this question to the public, we thought it behooved us to examine the cases above cited, to which our attention was specially called in the argument for the plaintiff. The case of Foster v. Essex Bank was ably reviewed by WHEELER, J., in Wiley v. Bank, supra, and is not in conflict with that case. The Essex Bank was incorporated by that name, with power to contract; but there was no enumeration of its powers in its charter. It always had been the practice of the bank to receive special deposits of money and other valuable property with the knowledge and approval of the directors, as was found by the special verdict of the jury. The court might therefore with propriety, hold as they did, that the corporation and not its officers became the bailee of the special deposit of coin in question; but a large portion of the same having been fraudulently taken from the bank by the cashier and converted to his own use, the bank being a mere depositary, the court also held that the bank was not liable to the depositor for the value of the coin so [Omitting a discussion of the form taken. of the action.] Coffee v. Bank was an action brought "We might well stop here, and affirm to recover a special deposit of gold First National Bank of Carlisle v. Graham. which the bank had converted to its own use. No question was made as to the authority of the bank to become the bailee of special deposits of this kind, and the bank was held liable, as it should have been, for the conversion of the gold to its own use. In Leach v. Hale, the cashier advertised that the bank would convert 7-30 United States government bonds into 5-20 bonds without charge. The plaintiff deposited in the bank 7-30 United States bonds to be converted into 5-20 bonds, and thereafter made a demand for the return of one of the other class of bonds, which was refused. The court held that the bank was not a mere mandatary, or bailee, acting without compensation, but was liable to the depositor for the value of the bonds, on its refusal to deliver them on demand; and that the business of receiving one class of United States bonds to be converted into another is within the scope of the powers conferred upon National banks by the act of Congress under which they are organized. The court say: The transaction, in the light we are now considering it, amounts to the deposit of certain securities, with an undertaking to return those of a different class, and was within the scope of the general business of the bank.' The court omitted to find, whether, in this particular instance, the bank received compensation, although they found that generally for such business it was in some form compensated. We should also infer, although it is not stated, that the bank converted the bonds in question to its own use, which would make it liable in any event. We cannot see why converting one class of United States government bonds into another class, at the request of the owner, is not one of the incidental powers' specifically conferred upon National banks by the 8th section of the act of Congress in question, such bonds being evidences of debt.' In Scott v. National Bank of Chester, the court held that the bank, which was a mere depositary of United States government bonds, without special contract or reward, and having exercised the degree of care bestowed on its own goods, was not liable for the larceny of the deposit, even by its own officers. It was assumed by the plaint. iff that the bank itself was the bailee, instead of the officer receiving the bonds, and no question was made as to the authority or powers of the bank to become such bailee, by the defendant's counsel, and the case does not show that that question was ever considered by the court. The only case we have seen in which this exact question was raised in conflict with Wiley v. Bank is National In that case Bank v. Graham, supra. the facts are substantially the same as in the case at bar. The court held that the mere act of the cashier in receiving the plaintiff's securities would not subject the bank to liability. But if the deposit was known to the directors, and they acquiesced in its retention, a contract relation was created by which the defendants should be held bound.' The court cited Foster v. Essex Bank, supra, as authority for the above proposition, but made no allusion to the difference between the charter of the Essex Bank and the act of Congress under which the defendant corporation was organized, as to the powers thereby respectively conferred upon each corporation. In the act of Congress the powers of National banks are enumerated. This is not the case with the charter of the Essex Bank; and its powers were to be determined by implication and usage, and were therefore more or less dependent upon the action of its directors. WOODWARD, J., who delivered the opinion of the court in this case, Bank v. Graham, says: The rule above stated has been uniformly applied by this court in cases involving the rights and duties of National banks. The principle announced in the recent New York and Vermont |