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ceeding that on which payment might have been first legally demanded, lb,

20. Forged ohacks and draftSi Where a bill or check is payable to order,
a banker has authority to pay to any person who becomes holder by a genuine
indorsement ; but the l>anker cannot charge his customer with payments made
otherwise, unless (1) the drcumstanoes amounted to a direction from the cus-
tomer to the banker to pay the paper without reference to the genuineness of
the indorsement, or (2) were equivalent to a subsequent admission that the in
dorsement was genuine, in reliance on which the banker was induced to so
alter his position as to preclude the customer from showing the indorsement to
be forged. 1870. Dodger, NoHonai Exchange Bank {^ Ohio ^i.2l^\'V,^^

21. Plaintiff being the owner of a certificate of indebtedness of the United

States, indorsed it in blank and mailed it to a paymaster. It was stolen from
the mail and presented to a paymaster by the thief, who represented himself
to be plaintiff, and requested a check, saying that he could identify himself at
the bank. The pajrmaster accordingly gave him a check, payable to plaintiff's
order, on defendant bank. The bank paid the check to the bearer without
inquiry, on the forged indorsement of the plaintiffs name. The paymaster,
with notice of plaintiffs claim, subsequently lifted the check, and was charged
with its amount in his settlement with the bank. HM, (1) that plaintiffs claim



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BANKS AND BANKING, 35

Against the defendant bank was not affected by the paymaster's negligence in
^ not requiring the person to whom the check was given to identify himself;
(2) that plaintiff's claim was not affected by the subsequent settlement of the
paymaster with tlie bank ; and (8) that plaintiff could ratify the giving of the
check in his name, thus making it his own, and maintain an action against the
bank for the amount. 1870. Id,

22, The payee of a forged check, drawn payable to his order, took it from'

a third person, without inquiry, although in good faith and for value, and in-
dorsed it for collection ; and the drawee paid it. JSeld, that the drawee could
recover the amount so paid from the payee. 1871. 2f(Uumal Bank of North
America Y,%anff» (106 Mass. 441), VIII, 849.

23. The responsilility of the drawee, who pays a forged check, for the

genuineness of the drawer's signature, is absolute only in favor of one whohaa
not, by his own fault or negligence, contributed to the success of the fraud or
to mislead the drawee, lb,

24. A genuine diaft was fraudulently altered by increasing the amount-
by changing th& name of the payee, and by erasing and rewriting the name of
the drawer. It was afterward presented to plaintiff, the drawee, by defendant, a
bona fide indorsee, and paid. Held, that plaintiff, on discovering the forgery,
could not maintain an action against defendant for repayment. 1871. Nat*
Park Bank v. Ninth National Bank (46 N. Y. 77). VU, 810, and noU, 818.

26. Where the drawee of a bill to which the name of the drawer has

been forged accepts or pays it in the hands of a bona fide holder, he is bound
by the act, and can neither repudiate nor recover the payment. lb,

26. Plidntiffs book-keeper forged plaintiffs signature to a check on

defendant's bank, which was paid. On hearing of the fact, plaintiff ratified
the act and retained the book-keeper in his employ. He afterward again forged
plaintifTs signature to a check which defendant paid and deducted from plain-
tiff 's deposit. Held, that plaintiff had helped to mislead the bank and oould
not recover the amount. DeFnret v. Bank of America (28 La. An. 816), YIII,
597.

27* Days of grace are not allowed on a check payable at a future day named.
Champion v. G<yrdon (70 Penn. St. 474) X, 681 ; but see ante, p. 10.

IV. Cebtifioate of deposit.
28. 0«rtificata of deposit — mistake in — bona fide holder. On receiving
a deposit of $700, the defendants, bankers, issued a certificate of deposit, pay-
able to the order of the depositor. By a mistake in fiUing up the body of the
certificate, the sum was written " fifteen hundred," instead of seven hundred
and fifty. The figures on the upper left-hand comer were for the correct
amount. On the same day the payee transferred the certificate to an indorsee
for value, and the indorsee transferred it to plaintiff to be credited, and a por-
tion to be applied on an indebtedness, which was done. In an action to recover
the full amount named in the certificate, Md, that the plaintiff, being a bona
fide holder, was entitled to recover the full amount. 1870. Poorman v. MiUa
(89 OsL 845), n, 461.



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36 BANKS AND BANKING,

v. Cbbtificatioh of chbokb.

29. In an action by a bona fide holder of a check drawn on defendant, a

national bank, and certified bj its caahier, hM, that the defendant was liable,
although the drawer had no funds in the bank when the check was certified.
1873. Cook ▼. 8taU National Bank (52 N. Y. 96), XI, 667.

30. The defendant drew his check to the order of D., which was dis-
counted bj the plaintiff. It was presented when due to the bank on which it
was drawn for certification, and was certified as good. In the afternoon of the
same day it was presented for payment, and payment refused, the drawee hay-
ing in the intermediate time suspended. BM, that the certification operated
as a payment of the check, as between the holder and the drawer, and the
latter was discharged from liability. 1878. First National Bank of J&noy
aUy ▼. Leach (62 N. Y. 850), XI, 708.

VI. NATIOKAIi BAinc

31. By laws — stock. A national bank has the i>ower, under the National
Currency Act of Congress of 1864, chapter 106, to make by-laws providing that
the shares of its capital stock shall be transferable only on its books ; that no
stockholder shall be allowed to sell or transfer his stock while indebted to the
bank, without the assent of its directors ; and that the stock of any stockholder
shall be held pledged and liable for the payment of any debt due or owing
from such stockholder, and may be sold at public auction for the satisfac-
tion of such debt, on default of payment thereof. 1869. Lockwood ▼.
MeehanM National Bank (9 R. L 808), XI, 253.

32. In all cases where an act is to be done by a corporate body or a part of

a corporate body and the number is definite, a majority of the whole number is
necessary to constitute a legal meeting, although at a legal meeting, where a
quorum is present, a majority of those present may act. Hence, a by-law
adopted at a meeting of six ad interim directors of a national bank, which had
twelve directors before its conversion, is invalid, because not adopted by a
majority or quorum of the board, lb,

33. Failure of — action against. Where a national bank fails and the
United States comptroller of the currency, proceeding under sections 46 to 50
of the currency act, finds it to be in default, declares the bonds deposited with
the government to secure the circulation forfeited, and appoints a receiver,
such proceedings do not dissolve the corporation to such an extent as to bar
an action against it by a creditor to test the validity of a claim disallowed
by the receiver. 1870. Pahquioque Bank v. Bethel Bank (86 Conn. 825), IV, 80.

34. Re-organization of State banks. When a bank, organized under the
laws of a State, re-organizes as a national bank under the act of Congress,
it escapes none of its liabilities by the change. 1870. Coffej/ v. National
Bank of the State of Missouri (46 Mo. 140), U, 488.

3 6. Liability for bonds deposited. Where a national bank received on deposit
United States bonds of one class, for the purpose of converting the same
into bonds of another class, ?ield, (1) that the bank was not a mere man-



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BANKS AND BANKING. 37

datoiy or bailee, acting without compensation, bat was liable to the depos-
itor for the value of the bonds on its refusal to deliver them on demand ;
(3) 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.
1870. Uach v. Hale (31 Iowa, 69), VII, 112.

36. Uability of shareholder. A person who appears upon the books of
a national bank as the the legal owner of shares of its stock is, upon the
failure of such bank, liable for the debts of the association to the extent
of the shares held bj him, although he received and holds such shares as
collateral security for a loan to a shareholder. 1871. Hale v. Walker (31
Iowa, 344), VII, 187.

37. Interest — State usury laws. The usury laws of the State of New
York are applicable to national banks organized under the act of Congress
of June 3, 1864. Accordingly, held, that in an acti9n upon a promissory ^
note, bought by a national bank, the defense of usury in taking more than
seven per cent for the loan of the money for which the note was given, was
available to the defendants. 1872. Firet National Bank of Whitehall v.
Lamb (60 N. Y. 95), X, 438.

38. National banks organized under act of Congress are not bound by

the usury laws of the State in which they are situated. 1872. First NaHonal
Bank v. GarHnghouse (22 Ohio St. 492), X, 751.

39. The discounting of a promissory note by a national bank, at an

unlawful rate of interest, does not render the note void in toto, but only
to the extent of the interest. 1872. lb,

40. Under section 80, of the National Currency Act (18 Stat, at Large, 106)

the taking or charging a rate of interest greater than six per cent per annum,
in advance, by a national bank located in Ohio, is a forfeiture of the entire
interest which the note or other evidence of the debt carries with it, or which
has been agreed to be paid thereon ; as well as the interest accruing after
maturity and before judgment, as the interest which accrued before the matur-
ity thereof. 1872. tihunk v. Firtt NaHonal Bank (22 Ohio St. 508), X, 762
and note, 768.

4L A national bank is limited, in its right to take or charge interest on its

loans and discounts, to the rate of interest allowed by the State laws to banks
of issue organized under those laws, if the rate so allowed is different from
the general rate allowed by the laws of the State. lb„ see contra, note, 768.

42. Aotions against A banking assodation organized under act of congress
of 1864, chapter 106, can be sued in a State court, only in the dty or county
where it is located. 1869. Crocker v. Marine National Bank (101 Mass. 240).
m, 886. See, also, Bank of Bethel v. Pahquioque Bank, 14 Wall. 883.

43. Actions against — Jurisdiction — removal of cause to Federal oonrt

Action brought by a citizen of New York, in a State court of New York,
against a national bank locate<f in Boston. Held^ (1) that the court was not
ousted of jurisdiction by section 57, of the National Currency Act (13 Stat, at



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38 BANKS AND BANKING,

Large, 99), that statute being pennissive and not.mandatorj as to the courts in
which a national bank may be sued ; and, aemble^ that congress had not the
power to deprive State courts of jurisdiction in such cases ; (3) that the defend-
ant was a citizen of Massachusetts, within the meaning of the acts relating to
the remoTal of causes to the Federal courts ; (8) that the joinder in the action
as defendants, of the drawers of the check, would not deprive the bank of the
right to alone apply for a removal of the case to the Federal court, the causes
of action being distinct and only properly joined by virtue of a State statute ;
(4) by a divided court, that the cause could not be removed by the bank into
the Federal court, under the act of congress of March 2, 1867, as being a cor-
poration, it could not make the affidavit required by the act. 1878. Cook ▼.
8UUe National Bank (52 N. Y. 96), XI, 667.

44i Damages in aotion for gold deposit In an action of trover against a
bank, after its re-organization as a national bank, for the value of certain
special deposits in coin made prior thereto hAd, that the measure of damage
was the value of the coin at the date of its conversion with interest thereon.
1870. Coffey v. National Bank (46 Mo. 140), U, 488.

46. Taxation o£ The circulating notes of national banks are not exempt
from taxation by a State. 1869. Commisnoneri v. El^on (82 Ind. 27), II, 827.

46. The owner of shares of the stock in a national bank should be taxed

therefor, in the city or town where he resides, and not in the city or town
where the bank is located. 1870. Clapp v. City of Burlington (42 Vt. 679), I
865.

47. By an act of the Indiana legislature, passed In March. 1867, shares of

the capital stock of national banks within the State were taxed for that year,
and the cashier of each bank was required to represent each stockholder in
listing and valuing his stock, ffeldf that the statute took effect from the first
day of January, 1867, and that it was a valid exercise of the taxing power, and
that it did not conflict with the constitutional requirement of '* a uniform and
equal rate of assessment and taxation." 1870. WkUney v. Bagtdale (88 Ind.
107), V, 185.

Taaation of tharea in national banks, 806 Gokbtitutiokal La.w.

VIL SAYINOS BAITKS.

418. Deposits. A father dei>osited, in a savings bank« a sum of money in
his own name and a like sum in his daughter's name, though for his own bene-
fit, and retained the pass-books in his own possession. The father died, and
the daughter brought suit against the bank to obtain the amount deposited by
him in her name. Held, (1) that parol evidence was admissible to show that
the father deposited the money (which was his alone) in the manner he did
because the law would not permit the bank to hold so large a sum as both
deposits for a single depositor; (2) that the daughter could not recover, not-
withstanding the by-laws of the bank provided that a depositor and his legal
representatives should be bound by a condition annexed to a deposit, designat-
ing the name of the person for whose benefit it was made. 1870. Brabrook v.
Boston Five Cents Savings Bank (104 Mass. 228), VI, 222.



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BETTING AND GAMING. 39

49. Agent of depositon. A sayings bank met with a loss which was bj vote
of the directors, apportioned pro rata among the depositors. In an action by a
depositor to recover the fall amonnt of his deposit, hM, that the bank was
merely the agent of depositors, and that plaintiff coald not recover. 1871.
BuntUU ▼. The CMUMviUe Samngs Society (88 Conn. 208), IX, 880.

60. Hm gift of a savings bank book, with an intention to give the deposits,
is a vaUd gift. Camp's Appeal (86 Conn. 88), IV, 89 ; TiXUnghast v. WheaUm
(8 R. I. 586), V, 621.

8ee Bills and Notbs; Forgbrt; Qift.

BAB TO ACTION ^ Bee Bankbuftct ; JuDanKNT.

BABOAIN AND SALE.

L Of LAKD8— i6^ CONTBTANOB.

XL Of goods — See Salb.

BARRATRY — /SSm Insubanob.
BEQUEST — See Wills.

BETTING AND GAMING.

1. On eldotion — reoorery of stako. Plaintiff and defendant made a wager
as to the result of a presidential election in another State, and deposited the
monejr with a stakeholder. The plaintiff lost, and the stakeholder paid the
monejr to the defendant. In an action to recover the monejr back, heid, (1) that
the wager was against pablic policj and void ; (2) that the plaintiff coold not
recover back the money. 1871. Qregcvy ▼. Eing (58 111. 169), XI, 66, and
fk7<e,68.

2. Wager on hors^-xaoe. A wager upon the resolt of a horse-race is Ulegal,
and money bet thereon can be recovered of the stakeholder by the loser, if
before paying it over to the winner the stakeholder has been notified not to pay
it over, and the loser has demanded its retom. 1871. WiJOwMwi ▼. TouA«g,
(16 Minn. 299), X, 189.

3. Oo n trao ts lor gambling oonaid«ratlon void. A statute provided that all
promises, notes, bills, contracts, etc., made upon any gambling consideration
should be void, that a court of equity might set aside any such promise, etc.,
and that no assignment of any bill, note, agreement or other security, as
aforesaid, should in any manner affect the remedies of any person interested
therein. The plaintiff indorsed certain drafts payable to his order, staked them
at faro and lost. The drafts were subsequently transferred in the usual course
of business, and without notice, and for a valuable consideration, to the defend-
ant. In a suit to cancel the indorsements, and to have the drafts delivered to
the plaintiff, A«M, that the indorsements were void ; that the defendant acquired
no title to the drafts, and that the plaintiff was entitled to the remedy sought.
1870. CAoptn v. Bake (57 111. 295)| XI, 15.

4. When gambling transaction not void. In an action on a certificate of deposit
by a second indorsee and botuiflde holder, held, that the fact that the transfer



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40 BILL OF LADING — BILLS AND NOTES.

to the first indorsee was made in a gambling room and in a gambling transac-
tioD, did not render the transfer yoid under an act against gaming, there being
no evidence that the consideration therefor was money or other thing of valae
lost or won at the games prohibited. 1870. Poorman y. MUU (89 CaL 845),
II, 451.

BELLIGERENT RIGHTS — fiw Wab.

BIGAMY — See Mabbiage.

BILL OF LADING.

Possession of goods acquired under a bill of lading is sufficient to maintaJa
an action against one who does not show a better title. 18d8. Adame r,
aOonner (100 Mass. 515). 1, 187.





BILLS AND NOTES.


I.


Pabtibs.








2. Agents.




8. Corporation,




4. Drunkard.




5. Fictitious Maker,




6. Ouarantor,




7. fftuband and Wife.




8. Joint Owners,




f . Sureties.


n.


FOBM AND OpBBATXOH.


nL


CONBIDEBATION.


IV.


Tbansfbb.


V.


Demand.


VL


Notice of Pbotest.


vn.


RiaHTS OF HOLDEBS IN GOOD FaITH.


vin.


Altbbations.


IX.


ACTIONB ON.


X.


Defenses.


XL


Payment.


XM.




XUL


Law of Place.


XIV.


Lost and Stolen Pafeu.


XV.


NoN nbootiablb Pafbb.


XVL


FOBOED PaFEB.


xva


Stamps — See Stamps.



I. Pabtibs.
1. AeeommodcUion indorser.
1. Indorsement of a third person. The mere signature of a third person on
the back of a negotiable note, before its indorsement by the payee, creates por



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BILLS AND NOTES. 41

M, no implied or commercial contract whatever. The iiabilitj of such third
person will be that of a second indorser, or of surety for the maker, according
to the intention with which he became a party to the note, and parol evidence
is competent for the purpose of showing what such intention was. 1872. Ohad-
dock V. Vdnness (85 N. J. 517), X, 256.

2. One not named as payee, who puts his name on the back of a note, before
delivery to the payee, will be held liable on it as an original promisor, if it be
proved that he wrote his name on the note aa surety for the maker, upon the
faith of which money was loaned, or credit given by the payee to the maker.
His liability is that of a joint and several maker of the note. Forbearance of
a precedent debt of the principal is a sufficient consideration for such under-
taking. And though the payee afterward indorses his name on the note, and
uses it for his own purposes for discount at a bank, he may, if compelled to
take up the note, erase his own indorsement, and recover of the other parties
as makers, upon proof of the original contract under which the note was
given. Id.

3. If a person not a party to a note places his name in blank on the back

thereof before delivery, he is to be regarded as an indorser, and demand and
notice are necessary in order to fix his liability. 1870. Jonet v. Goodwin (89
Cal. 498), II, 478, and note, 475.

4. A promissory note signed by B., and indorsed in blank by C, was deliv-
ered to D., to secure a loan. Held, that, by conclusion of law, C. was respon
■ible as joint maker. 1871. Ives v. Boaley (85 Md. 262), VI, 411.

6. Defendant put his name on the back of a negotiable promissory note,

the payee not having indorsed it, and subsequently wrote letters to the payee
stating that if the maker did not pay the note he (defendant) would pay it.
In an action by the payee, hM, that although, in the absence of legal evidence,
the position of defendant was that of second indorser, yet the letters were
admissible in evidence to prove that the agreement upon which the indorse-
ment was made was a guaranty that the note should be paid to the payee.
1871. JSmeH V. FinfAeiner (68 Penn. St. 243), VUI, 176.

6. A bill of exchange was indorsed by one person for the accommodation

of another, to enable the latter to raise money, the indorser having no interest in
the application of the money. The bill was used by the party for whom it
was indorsed, in payment of a pre-existing debt. Held, that such application
of the bill constituted no defense to an action brought upon the bill against
the accommodation indorser by the party receiving it in payment, with full
knowledge of these facts. 1870. FrtUrs v. T?i6 MuncU National Bank (84
Ind. 251), VU, 225, and note, 228.

7. A note payable to the order of J. E. 6. was, before delivery to the payee,

indorsed by S. 6. Prior to maturity, the payee transferred the note to H., who,
before it fell due, transferred it to the plaintiff abeolutely, without any condi-
tion, for a valuable consideration. At the time of such transfer the note had
upon it an indorsement of J. E. 6.. written above the indorsement of S. B.,
by which said J. E. 6. made the same payable to the order of S. 6. ** without
reoourse " to said J. E. 6. as indorser. Held, that in the absence of proof that
6



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42 BILLS AND NOTES.

S. B. indorsed with intent to become soretj for the maker, to the payee, the
legal presumption was that he stood in the position of subsequent indorser,
and that the payee could neither maintain an action against S. B/s executor,
upon the indorsement, nor transfer a right of action thereon to a purchaser,
with notice, except upon assuming the responsibility of first indofser. 187d.
Phelps V. Vischer (60 N. Y. 69), X. 488.

8. Action by pledgee. A pledgee of negotiable paper has generally a right
to collect the whole amount of securities pledged to him, and account to the
pledgor for the surplus over his debt. But in case of accommodation paper
pledged, the pledgee can recover of the maker only the amount of the debt
due him from the pledgor. 1868. AUas Bank v. DoffU (9 R. I. 76), XI, 219.

2. AgenU.

9. — Office of company The secretary of an incorporated company gave a
promissory note, using the words " We promise to pay," etc., and signed it
with his own name with " Rec'y " aflBixed, and impressed thereon the seal of
the corporation. Held, that he was not personally liable thereon. 1869. Means
V. SwartMtedt (82 Ind. 87), II, 830, and note, 882.

10. A bank check, with the words "iBtna Mills " printed on the maigin,

was given in payment of a debt due from the mills, and signed by F., the treaa-
urer. Held, that it was the check of the mills, and not the personal check
of F. 1871. Carpenter v. FametDorth (106 Mass. 661), Vm, 860.

11. A promissory note was made payable " to tl\e order of C.W. S., treasu-
rer of the L M. B. Ck>." Held, that the legal intendment was that the contract
was made with the company and not with the treasurer individually, and that
the maker of the note, in an action thereon, was estopped from alleging the
non-existience of the corporation at the time he made his contract. 1871,
Vat&r V. Letm (86 Ind. 288), X, 29.

12. Parol evidence to show intent A promissory note read as follows :
*' Four months after date, we, the president and directors of the Dyilaney's Val-
ley and Sweet Air Turnpike Ck>mpany, of Baltimore county, promise to pay
to William F. Pierce, or order, one thousand dollars with interest, for value
received;" and was signed by C. T. H., '* president," J. N. H. and J. G. D.
•* directors," and B. R. S., " secretary." In ah action to recover on the note,
?ield, that parol evidence was admissible to show that the drawers of the note
signed it as agents of the company and not as individuals, and that the note
was accepted as the note of the company. 1869. HaUe v. Fieirce (82 Md. 827)
III, 189. '

13. A promissory note in the form : " I promise to pay to the order of S.

& Co.," etc., * * * and signed " John T. Hull, Treas. St. Paul's Parish,"
is the note of Hull, and parol evidence is inadmissible to show that it was the



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