« AnteriorContinuar »
be compounded thereon, but must be calculated at simple rates, as in all cases of ordinary mortgage debts.
When a judgment is recovered by the bank against the customer for overdrafts or advances, interest will be allowed at the same rate which the bank itself was paying upon deposits on the same account.2 But where the banker and the customer arrange that all indebtedness of either to the other shall bear interest at a certain rate per cent, yet upon the death of the customer, or upon his closing his dealings with the banker, being at the time indebted to him, or upon his insolvency, or upon the death of the banker, or his ceasing to carry on business, or becoming bankrupt, the special arrangement at once ceases to operate, and from the date of such occurrence the balance of indebtedness then due from either to the other carries only such simple interest as is carried by any other ordinary contract debt.3
In casting interest or making the charge to the drawer, it is clear that the banker must debit the drawer of a check, not from the date of the drawing but from the date of the actual payment of the check. If the banker accepts the check some time before actually paying it, it has not been decided whether he may debit the drawer from the date of the acceptance or from that of the paying. But it has been said that the accepting of a check payable at a day future is equivalent to a loan, by the drawer to the banker, of the amount named, for the interval. Following this principle, it would practically amount to a debiting at the time of payment. For if the debit were made at the time of acceptance, yet the acceptance, creating at once a loan from the depositor to the banker for the interval, would cause interest to run on the same sum, for the same period at the same rate per cent, from the banker to the customer, and the one amount would exactly offset the other. But since the acceptance only binds the banker, at his own peril, to have funds enough of the depositor to meet it when payment is demanded, and as until such demand he has the full use of such funds, it would seem interest should in reason be calculated to the date when demand may be made.
| Mosse v. Salt, 82 Beav. 269. 2 Gwyn v. Godby, 4 Taunt. 346 ; Ikin v. Bradley, 5 Price, 536. & Crosskill v. Bower, 32 Beav. 86. • Goodbody v. Foster, cited to this point in Byles on Bills, Sharswood's ed., 1 Pott v. Clegg, 16 M. & W. 321; Foley v. Hill, 2 H. L. Cas. 40.
From the rule laid down at the opening of this chapter, that the banker is in no sense a trustee, or quasi trustee, for the benefit of his customer, it follows that under an agreement to allow interest, he is under no obligation annually to balance the account and credit the interest, so as to prevent the running of the Statute of Limitations.
POWERS, DUTIES, AND LIABILITIES OF OFFICERS AND AGENTS.
Conduct of the Corporate Business through Agents or Officers.
The old rule of law was, that a corporation could do no act save by a deed executed under its corporate seal. But this ancient principle has of late years been done away with by the compulsion of the practical necessities of business; and in our land and our time corporations without number transact their affairs with a very infrequent use of this once indispensable formality. In the case of The Bank of Columbia v. Patterson's Administrator, the Supreme Court of the United States first absolutely declared that the old rule could no longer be regarded as law, and the same has been since consistently and frequently held, in cases not only of banks but of various other species of corporations. But the practical effect of the old rule is reduced to a low point by the doctrine, that the class of corporations which are creatures of a statute, whether general or special, are not within the force of the common-law rule. If the statute provides that the management shall be in the hands of a board, or if it orders or authorizes the election of certain officers for the fulfilment of certain familiar functions, all acts done by such board or by such officers within the scope of their authority are to be regarded as done directly under and in pursuance of a power vested in them by the legislative enactment, and therefore as relieved from those formalities which otherwise the common law might demand. Then, too, the ancient rule simply required that when the corporation itself performed an act, that act should be done by deed and with the seal. This rule, strictly construed, still leaves the corporation free to create agents to whom it may delegate power to act for it, and the acts of such agents, though binding the corporation, are yet not primarily the acts of the corporation, and so need not be performed by deed nor evidenced by seal. Such are the two favorite methods which jurists have adopted for annulling without breaking an ancient and time-honored principle. Either artifice accomplishes sufficiently satisfactorily the desired end. Though to make the former apply it is essential that there should be a statutory enactment, which is not wholly silent concerning the government or appointment of officers of the corporation; and the latter is available only when the deed and corporate seal appear somewhere in the chain of proceedings. For the corporation must act somewhere and at some time in creating the original agency and making the primal delegation, and this act must be accompanied by the common-law formalities, since it cannot receive the protection of the agency theory. But the simple truth is, that the elastic expansion of modern business has irrevocably snapped the clumsy and useless ligament, which older generations found less intolerable. Judges, in evading the rigidity of an antiquated dogma of the law, have simply yielded to that pressure of invincible necessity which the developments in the conduct and systems of the business world are every day bringing to bear upon old-world legal technicalities. It would only drag the law into contempt to declare that it requires every check or draft, every loan or discount, every indorsement or transfer, made by a bank, to be evidenced by a corporate deed and seal.
17 Cranch, 299.
? Fleckner v. Bank of United States, 8 Wheat. 338; Mechanics' Bank of Alexandria v. Bank of Columbia, 5 id. 326; Stamford Bank v. Benedict, 15 Conn. 437; Ridgway v. Farmers' Bank, 12 Serg. & R. 256; Fishmongers' Com. pany v. Robertson, 12 L. J. N. s. 185; 6 Man. & Gr. 286 ; 6 Scott, N. R. 56.
The business of an incorporated bank 1 can of course be conducted only by agents of the corporation, or, as they are commonly styled, officers of the bank. It is in the corporate shape that nearly all the banking business in the United States is carried on; though the English system, by which private individuals and partnerships enter into the banking business, is by no means unknown among us. Even in this latter species of arrangement, however, the individual or partnership, if the business be tolerably large, must appoint clerks or agents, who must perform the functions, and may often assume the titles, of certain of the bank officers, - not of president or directors, of course, but of cashier, teller, book-keeper, and the like. In either case, the official or clerk is in fact strictly the agent of the corporation, partnership, or individual; and in general terms it may be stated that the ordinary rules of the law of agency will apply for the settlement of all appropriate questions. These rules will govern all transactions in which the corporation or its official are parties, just as much as they govern all transactions in which the individual and his clerk are parties. It makes no difference that the principal is a corporate body and that the agent has an official designation. His title serves only to show in what class of dealings, for what purposes, and with what powers he is accredited as an agent; and the simple legal relationship of principal and agent, as it is well understood in its constant occurrence between individuals, is to be found with precisely the same legal attributes beneath the corporate impersonality and the official dignity.
associations of New York, organized under the statutes of that State, differ only in some slight and insignificant particulars from ordinary corporations. For all the purposes of the matters now under discussion they may be regarded as corporations. The National Banking Act, sec. 8, especially declares that all organizations under its provisions, though called “associations," shall yet have the legal character of corporations.
So all acts done by an agent, with the essential proviso that they be done officially, and that they fall within the scope of his powers and duties,3 are in law the acts of the corporation itself. Whether these be rightful or wrongful, innocent third parties have the right to regard them in this light, and the law will thus construe them. In like manner, knowledge obtained by the agent in his official capacity, and within the scope of his agency, will affect the corporation; and declarations made by himn in the like manner and within the like range will bind the
1 Frankfort Bank v. Johnson, 24 Me. 490; Atlantic Bank v. Merchants' Bank, 10 Gray, 632.
Hughes v. Bank of Somerset, 6 Litt. 45. • New Hampshire Sav. Bank v. Downing, 16 N. H. 187.