Merchants' National Bank v. State National Bank. the Merchants' Bank he thought it would go through some other bank or banks." The assent of Mellen, Ward & Co. to the sale to the State Bank by the Merchants' Bank extinguished their claim upon the latter. The Merchants' Bank certainly had a title of some kind, and whatever it was it passed to the State Bank, unless the contract was void, because the State Bank had no corporate power, or its cashier had no authority to make the purchase. The act of Congress expressly authorizes the banks created under it to buy and sell coin. No question of ultra vires is therefore involved. If the Merchants' Bank held the certificates as a pledge it had a special property which might be sold and assigned. The assignee in such cases becomes invested with all the legal rights which belonged to the assignor. Such is the rule of the common law, and it has subsisted from an early period. Mores v. Conham, Owen, 123; Anon., 2 Salkeld, 522; Coggs v. Bernard, 3 id. 268; Whitaker v. Sumner, 20 Pickering, 399, 405 Thompson v. Patirick, 4 Watts, 415; Story on Bailments, § 324. But we are entirely satisfied with the other view we have expressed upon the subject. Modus et conventio vincunt legem. It is insisted by the defendants' counsel that the transaction was a loan to Mellen, Ward & Co. As the bank parted with its title, if there were a loan in the eye of the law, it would not in any wise affect the conclusions at which we have arrived. Recurring to the subject of the authority of the cashier of the State Bank to make the purchase and excluding from consideration for the present the certified checks, three views, we think, may be properly taken of the case in this aspect: 1. If the certificates and the gold actually went into the State Bank, as was admitted by Smith to Havens, then the bank was liable for money had and received, whatever may have been the defect in the authority of the cashier to make the purchase, and this question should have been submitted to the jury. 2. It should have been left to the jury to determine whether, from the evidence as to the powers exercised by the cashier, with the knowledge and acquiescence of the directors, and the usage of other banks in the same city, it might not be fairly inferred that Smith had authority to bind the defendant by the contract which he made with the Merchants' Bank. 3. Where a party deals with a corporation in good faith-the transaction is ultra vires-and he is unaware of any defect of author Merchants' National Bank v. State National Bank. ity or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. If the contract can be valid under any circumstances, an innocent party in such a case has a right to presume their existence, and the corporation is estopped to deny them. The jury should have been instructed to apply this rule to the evidence before them. The principle has become axiomatic in the law of corporations, and by no tribunal has it been applied with more firmness and vigor than by this court. Supervisors v. Schenck, 5 Wall. 772; Knox Co. v. Aspinwall, 21 How. 539; Bissell v. Jeffersonville, 24 id. 288; Moran v. Commissioners, 2 Black, 722; Gelpcke v. Dubuque, 1 Wall. 203; Mercer Co. v. Hackett, id. 93; Mayor v. Lord, 9 id. 414; Royal British Bank v. Turquand, 6 Ellis & Blackburn, Q. B. & Ex. 327; The Farmers' Loan and Trust Co. v. Curtis, 3 Selden, 466; Stoney v. American Life Ins. Co., 11 Paige, 635; Society for Savings v. New London, 29 Conn. 174; Commonwealth v. City of Pittsburg, 34 Penn. St. 497; Commonwealth v. Allegheny County, 37 id. 287. Corporations are liable for every wrong of which they are guilty, and in such cases the doctrine of ultra vires has no application. Philadelphia & Baltimore Railroad Co. v. Quigley, 21 How. 209 ; Green v. London Omnibus Co., 7 C. B. (N. S.) 290; Life and Fire Ins. Co. v. Mechanics' Fire Ins. Co., 7 Wend. 31. Corporations are liable for the acts of their servants while engaged in the business of their employment in the same manner and to the same extent that individuals are liable under like circumstances. Ranger v. The Great Western Railway Co., 5 House of Lords Cases, 86; Thayer v. Boston, 19 Pick. 511; Frankfort Bank. V. Johnson, 24 Me. 490; Angell & Ames on Corporations, §§ 382, 388. Estoppel in pais presupposes an error or a fault and implies an act in itself invalid. The rule proceeds upon the consideration that the author of the misfortune shall not himself escape the consequences and cast the burden upon another. Swan v. The British North Australian Co., 7 Hurlstone & Norman, 603; Hern v. Nichols, 1 Salkeld, 289. Smith was the cashier of the State Bank. As such he approached the Merchants' Bank. The bank did not approach him. Upon the faith of his acts and declarations it Merchants' National Bank v. State National Bank. parted with its property. The misfortune occurred through him, and as the case appears on the record, upon the plainest principles of justice the loss should fall upon the defendant. The ethics and the law of the case alike require this result. Dezell v. Odell, 3 Hill, 216. Those who created the trust appointed the trustee and clothed him with the power that enabled him to mislead, if there were any misleadings, ought to suffer rather than the other party. Farmers and Mechanics' Bank of Kent Co. v. Butchers and Drovers' Bank, 16 N. Y. 133; Welland Canal Co. v. Hathaway, 8 Wendell, 480. In the Bank of the United States v. Davis, 2 Hill, 465, NELSON, Chief Justice, said: "The plaintiffs appointed the director and held him out to their customers and the public as entitled to confidence They placed him in a position where he has been enabled to commit this fraud." The director has fraudulently appropriated the proceeds of a bill discounted for the drawer. It was held the drawer was not liable. The reasoning of Justice SELDEN in the Farmers and Mechanics' Bank of Kent County v. The Butchers and Drovers' Bank, supra, is also strikingly apposite in the case before us. He said: "The bank selects its teller and places him in a position of great responsibility. Persons having no voice in his selection are obliged to deal with the bank through him. If, therefore, while acting in the business of the bank and within the scope of his employment, so far as is known or can be seen by the party dealing with him, he is guilty of misrepresentation, ought not the bank to be responsible?" The same principle was applied in the New York and New Haven Railroad Co. v. Schuyler, 38 Barb. S. C. 536; S. C. affirmed, 34 N. Y. 30. It was explicitly laid down by Lord HOLT, in Hern v. Nichols, 1 Salkeld, 289. He there said: "For seeing somebody must be a loser by this deceit, it is more reason that he that employs and puts trust and confidence in the deceiver should be a loser than a stranger, and upon this the plaintiff had a verdict." Smith, by his conduct, if not by his declaration, avowed his authority to buy the certificates and gold in question from the Merchants' Bank, and the bank, under the circumstances, had a right to believe him. Merchants' National Bank v. State National Bank. We have thus far examined the controversy as if the certified checks were void or had not been given. It remains to consider that branch of the case. Bank checks are not inland bills of exchange, but have many of the properties of such commercial paper; and many of the rules of the law merchant are alike applicable to both. Each is for a specific sum payable in money. In both cases there is a drawer, a drawee, and a payee. Without acceptance, no action can be maintained by the holder upon either against the drawer. The chief points of difference are that a check is always drawn on a bank or banker. No days of grace are allowed. The drawer is not discharged by the laches of the holder in the presentment for payment, unless he can show that he has sustained some injury by the default. It is not due until payment is demanded, and the statute of limitation runs only from that time. It is by its face the appropriation of so much money of the drawer in the hands of the drawee to the payment of an admitted liability of the drawer. It is not necessary that the drawer of a bill should have funds in the hands of the drawee. A check in such a case would be a fraud. Grant on Banking, 89, 90; Keen v. Beard, 8 C. B. (N. S.) 373; Serle v. Norton, 2 Moody & Robinson, 404, n.; Boehm v. Sterling, 7 Tenn. 430; Alexander v. Berchfield, 7 Manning & Granger, 1067. All the authorities, both English and American, hold that a check may be accepted, though acceptance is not usual. Robson v. Bennett, 2 Taunton, 395; Grant on Banking, 89; Chitty on Bills (10th ed.), 261; Boyd v. Emmerson, 2 Adolphus and Ellis, 184; Kilsby v. Williams, 5 Barnewall and Alderson, 816; Story on Promissory Notes, §§ 489, 490. By the law merchants of this country, the certificate of the bank that a check is good is equivalent to acceptance. It implies that the check is drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for payment. It is an undertaking that the check is good then and shall continue good, and this agreement is as binding on the bank as its notes of circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. The object of certifying a check, as regards both parties, is to enable the holder to use it as money. The transferee takes it with the same readiness and sense of security that he would take the notes of the bank. It is available also to him for all the purposes of money. Thus it continues to perform its important functions Merchants' National Bank v State National Bank. until in the course of business it goes back to the bank for redemption and is extinguished by payment. It cannot be doubted that the certifying bank intended these consequences, and it is liable accordingly. To hold otherwise would render these important securities only a snare and delusion. A bank incurs no greater risk in certifying a check than in giving a certificate of deposit. In well-regulated banks the practice is at once to charge the check to the account of the drawer, to credit it in "a certified check account," and when the check is paid, to debit that account with the amount. Nothing can be simpler or safer than this process. The practice of certifying checks has grown out of the business needs of the country. They enable the holder to keep or convey the amount specified with safety. They enable persons not well acquainted to deal promptly with each other, and they avoid the delay and risks of receiving, counting, and passing from hand to hand large sums of money. It is computed by a competent authority that the average daily amount of such checks in use in the city of New York, throughout the year, is not less than one hundred millions of dollars. We could hardly inflict a severer blow upon the commerce and business of the country than by throwing a doubt upon their validity. Our conclusions as to their legal effect are supported by authorities of great weight. Bickford v. First National Bank, 42 Ill. 238; Willets v. Phoenix Bank, 2 Duer, 121; Barnet v. Smith, 10 Foster (N. H.), 256; Meads v. Merchants' Bank, 25 N. Y. 146 ; Farmers and Mechanics' Bank v. Butchers and Drovers' Bank, 4 Duer, 219; affirmed, 14 N. Y. 624; Brown v. Leckie et al., 43 Ill. 497; Girard Bank v. Bank of Penn Township, 39 Penn. St. 92. Congress has made them the subject of taxation by name. Stat. at Large, 278. 13 But it is strenuously denied that the cashier has authority to certify the checks in question. To this there are two answers: 1. In considering the question of his authority to buy the gold, the evidence that he had given his checks for loans to his bank, and for the proceeds of discounts, was fully considered. Our reasoning and the authorities cited upon that subject apply here with equal force. We need not go over the same ground again. The questions whether the requisite authority was not inferable, and |