to suppose that he was asked for such an opinion, and because he did give an opinion that the check was good in the only points of which he knew anything, it would be illogical to hold the bank liable on the ground that the response meant good absolutely and for all purposes."

The Supreme Court of Nebraska, in the case of Grant v. Cropsey, 8 Neb. 205, holds that it is a firmly established rule that when one by his words or conduct willfully causes another to believe in the existence of a certain state of things and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time.38

Where the cashier admits that the drawer of the check has sufficient funds to pay the same, the bank is bound. It is an act within the scope of his authority and is equivalent to the verbal certification of the check.

Where a cashier was asked about the solvency of a firm and he reported that the firm "was good, was perfectly solvent," afterward the firm failed and it was shown that at the time of the inquiry the firm was insolvent and the bank, with the bankrupt, was sued, held that the bank was not responsible for the statements of the cashier; that he was not employed by the bank to give such information.

"A cashier of a bank who is also a director of a manufacturing company, and as such director assisting in promulgating false statements as to the financial condition of the company, for the purpose of defrauding all of its creditors, including the bank, was not the agent of the bank in such matter so as to affect the validity of its claims against the company.'

§ 145. Cashier's acts away from bank.

" 39

A cashier may draw checks while away from the bank; and may also indorse paper while away from the bank. 40

He may also pay or certify checks away from the bank.41

38 Pickard r. Sears, 33 Eng. Com. Law Rep. 469; Davis . Handy, 37 N. H. 65; Merchants' Bank v. Rudolph et al., 5 Neb. 527.

39 Hadden v. Dooley, 92 Fed. Rep.

40 Bissell v. First National Bank of Franklin, 69 Pa. St. 415.

41 Bullard v. Randall, 1 Gray (Mass.) 605.

If the cashier can bind the bank by representations made while in the bank, he may, while absent, if representing the bank and upon the bank's business, bind it.42

$146. Limitation of power.

Ordinarily the cashier of a bank has no authority to discharge its debtors without payment, or to bind the bank by an agreement that a surety should not be called upon to pay a note he had signed or that he would have no further trouble from it.43

Under section 5136 of the National Banking Act the cashier of a national bank has no power to bind it to pay the draft of a third person on one of its customers, to be drawn at a future day, when it expects to have a deposit from him sufficient to cover it, and no action lies against the bank for its refusal to pay such a draft."

Where a statute creating a banking corporation provides that its affairs shall be managed by a board of directors who shall have power to appoint and remove a cashier and other employees of the bank, the power to discharge a surety on a note cannot be exercised unless expressly delegated to him by the directors.45

The cashier of a national bank has not in the absence of special authority from the board of directors or a usage or practice so to do, power to receive on behalf of the bank property for safe keeping."

46

The cashier has no authority by virtue of his office to bind the bank by certification of his own check. The certification i invalid.47

In the case of State National Bank v. Newton National Bank, 66 Fed. Rep. 691, it is held that a cashier of a bank has no implied authority, to bind the bank by a pledge of its credit to secure a discount of his own notes for the benefit of a corporation in which he was a stockholder.

A bank may become liable for the cashier's deceit.

42 Houghton 1. First National Bank of Elkhorn, 26 Wis. 663.

43 Cochecho National Bank r. Haskell et al., 51 N. H. 116.

44 Flannigan et al . California National Bank et al., 56 Fed. Rep.

959.

45 Peoples Savings Bank r. Hughes, 1 Mo. Att. 549.

46 First National Bank of Lyons r. Ocean National Bank, 60 N. Y. 278.

47 Gale . Chase National Bank, 104 Fed. Reep. 214.

The cashier of a bank is the proper officer to receive deposits and to give certificates in respect thereto, which may properly include (with the consent of the depositor), a statement of the source from which the deposit arose; and for a false statement in that respect made to subserve the interests of the bank, the latter is liable in tort to one injured thereby, although the cashier was not expressly authorized to make such statement by the board of directors.48

The cashier has no power to release a security upon a note given to the bank.

He cannot execute or bind the bank by execution of a mortgage on the real estate of the bank.

The bank's property cannot be mortgaged only by resolution directing the same, emanating from the board of directors.

The cashier cannot plead the Statute of Limitation to his own note due the bank, unless the board of directors had knowledge of the due date of the note and knew it was unpaid.*

In the case of First National Bank v. Ocean National Bank, 60 N. Y. 278, it is held that a cashier of a national bank has no authority as such to receive special deposits, and thus bind the bank for their safe keeping. It is also held that a cashier cannot bind his bank by any contract, express or implied, concerning the taking of special deposits taken for the mere accommodation of the depositor, as such act is not within the authorized business of the bank.50

A cashier of a bank has no legal authority by virtue of his position to compromise a claim of the bank or to execute a composition agreement and release therefor. Such a power is discretionary, calling oftentimes for the exercise of considerable reflection and a high degree of judgment. It is strictly a sacrifice at least of nominal property of the bank, and is a function of the board of directors and not of an executive officer.5

48 Hindman 2. First National Bank of Louisville, 112 Fed. Rep. 931.

49 Harrisburg Bank v. Forster, 8 Watts (Pa. St.) 12.

50 Wiley v. First National Bank, 47 Ver. 546; First National Bank v. Graham, 79 Pa. St. 106.

51 Chemical National Bank v. Kohner, 58 Howard Prac. Rev. 207.

CHAPTER XI.

PAYING AND RECEIVING TELLERS

§ 147. Functions of the paying teller.

The functions of the tellers, receiving and paying, are respectively to receive and pay out the moneys of the bank, deposited or drawn out from it; and as a rule one cannot discharge the duties of the other.

The paying teller usually receives a higher salary than any other clerk, because the responsibility put on him to scrutinize signatures and to pay money is peculiar and very great.

To his care is committed the custody and disbursement of the bank's funds. He must know the signatures of the bank's customers, and be ready to decide upon the payment or refusal of all checks when presented. His position is very responsible.

The refusal of payment, of a genuine check, or the payment of a forged check, in either case may be a serious matter. A great variety of checks are, during a day's business, drawn and presented for payment, and each one requires more or less. examination. Many of them are required to be endorsed, and before passing his hands he must see that the proper endorsement is made. Frequently checks are post-dated, and may be presented for payment before the time fixed by the drawers. Sometimes the dates are altered, and the teller must satisfy himself whether the alteration is material or not.

In the payment of checks, the teller must think of and decide many important things: First, is the signature genuine? Second, is the account of the drawer good? And third, is the person holding and presenting the check entitled to receive the money? Fourth, is the check raised or altered?

"A teller," says an eminent jurist, "is an agent acting under a special or express authority, and not one so appointed by a principal that there can arise any implication of defined power. By the nature of the teller's employment, his duties. are defined with an approach to exactness. Such a one is

sometimes called a special agent, though the phrase is open to objection. The principal holds out to the public as an agent with limited powers, and with such a one third persons deal peviculo."

A teller, known to be such by one doing business with him, cannot bind the bank by an agreement to pay interest to a depositor in excess of the rate which the bank through its board of directors have authorized, and especially so where the rate of interest agreed to be paid was entered as a stipulation in the passbook.

The teller has no authority to make contracts for the bank, and when he attempts to do so, if the party dealing with him has the knowledge of the fact that his position in the bank is that of a teller, the bank is not bound by the contract where the same is outside of his duty and authority to act. The rule, however, is different where persons dealing with him and in good faith, without notice of any want of authority in such officer, and the act done is in the apparent scope of his authority, whether clothed with such authority or not, the party so dealing with him would be protected.

The acts of a teller, if not within his authority, may be ratified like those of other officers. The powers of a teller to act in the absence of the cashier is one of considerable importance. In Potter v. Merchants Bank, 28 N. Y. 641, p. 650, Justice Mullin says: "The cashier cannot clothe him with any more of his power than was necessary to enable the latter to carry on the usual and ordinary business of the bank." In that case the teller "in the absence of the cashier had authority undoubtedly to receive payments of notes and surrender them to the person entitled, and, in a word, to do whatever was necessary and proper to be done in the ordinary course of business." "I do not doubt," the court continued, “but that the teller had power to transmit notes owned by the bank or held by it for collection and payable in other places, or at other banks, to its agent for that purpose, and as, in order to do so it becomes necessary to endorse the paper of the bank, he had power to make such endorsement. But he had no power to pledge its securities unless they became pledged by the mere act of transmitting for collection."

The paying teller's duties necessarily bring him in contact