The bank president by virtue of his office, has the authority to represent the bank in a general way, and to conduct its litigation and employ counsel. By custom or usage very broad powers may be conferred upon him.
A President of a bank is supposed to exercise a sort of general supervision over its affairs, and by some authorities is said to be presumed to be its manager having very broad powers. Yet it seems to be the weight of authority that while by usage, by by-law or by some sort of conferring of authority, the President may be given any sort of power, yet in the absence thereof his office is to a large extent merely honorary and he cannot bind the bank, except in a narrow compass. It seems to be admitted that by virtue of his office alone, he may handle the litigation of the bank, bringing suits, employing counsel, etc.160
So it has been held he may bind the bank by offering a reward for the purpose of securing the arrest of a defaulting officer as within the President's power, in the absence of any limitation on such power.161 But aside from acts of this sort, looking to the bank's general protection, the cases usually hold that the president has no authority of any specific sort, except as is actually conferred on him by the bank in each case. As a matter of fact he frequently has a very general and broad authority, being in effect the bank's managing officer.
160. Citizens Nat. Bank v. Berry, 53 Kans. 606.
161. Bank v. Griffin, 168 111. 314.
The cashier of a bank is the officer who has charge of the financial dealings of the bank and his authority depends upon the particular facts of each case, the usages of the bank in question and of the community, and the particular authority in any wise conferred.
The cashier of a bank is its chief fiscal officer, having the charge, as an executive, of the financial matters of the bank and the will of its directors. He does not control the financial policies of the bank, but he executes them.
He cannot determine upon the general policies of the bank, but he carries them out as determined by the directors.
The authority of the cashier, like the authority of the president, depends largely on the particular facts in the case, the usages of the bank in question, etc. Yet by virtue of his office, he necessarily has certain well known authority in every case, pertaining to the management of the routine financial matters of the bank. Thus he may draw cashier's checks on the funds of the bank, receive moneys payable to the bank, certify checks regularly drawn,162 indorse and transfer commercial paper,163 discount commercial paper, etc. He may borrow money for the bank, pledging its personal property in security therefor.164 In other words, he has the implied power to take all the usual and necessary steps to carry on and manage the financial operations of the bank, so far as the usual and regular banking business is concerned. He cannot direct general financial policies, for that right is in the directors, and his implied authority by virtue of his office is strictly limited to those matters which fall within the daily routine of the banking business. But within his own sphere his implied authority is quite extensive. As one court says:165 "The cashier of a bank is its executive financial officer. It is under his direction that its moneys are received and paid out, that its debts are collected and paid, that its securities are kept and transferred. Such powers as are habitually exercised by cashiers must be held, so far as the public are concerned, to have been conferred upon Fuller by his election to the office."
162. Merchant's Bank v. State Bank, 10 Wall. 604.
163. Auten v. Manistee Nat. Bk., 67 Ark. 243.
164. Coats v. Donnell, 94 N. Y. 176.
He may of course have enlarged authority in any particular case, expressly given him or to be inferred from usage. In a recent case166 the court says: "It is apparent from the evidence in this case that the directors gave but scant personal attention to the management of the bank, and that the control of its affairs was left largely to the cashier. The board of directors met infrequently, sometimes only once a month. There is no question but that the action of the cashier in making the certificates was something which he might very properly have been authorized by the board of directors to do, had the matter been brought to their attention. * * * The law is well settled that where the directors of a bank, through long usage, permit the cashier to act without their express authority, in matters in which they might lawfully authorize him to act, they cannot, after such action on his part, be heard to deny his authority, to the detriment of those who have relied upon it.
165. Loring v. Brodie, 134 Mass. 453.
166. Nat. Bk. v. Equit. Trust Co., 223 Pa. 328.
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This case is one of many which might be cited to show how the facts of each case must be considered when the act falls without the routine financial operations of the bank.
The bank teller is a clerk authorized, as the case may be, to receive or pay out deposits. In the one case he is known as a receiving teller; in the other a paying teller. He is a subordinate of the cashier.
The teller's authority is practically confined to receiving or paying out deposits on checks presented for that purpose. He may have a larger authority as for instance, to certify checks, for in some banks it seems to be the custom for him to exercise this function in the cashier's stead and name. The teller is an employe, exercising a branch of the cashier's office. He is under the supervision of the cashier.
c. Banking Business.
A bank organized under general banking acts may carry on all sorts of banking business, established by custom as such. The banking business includes (1) The receiving deposits on checking accounts or otherwise; (2) Investing its funds; (3) Making loans and discounts; (4) Making collections; (5) Issuing negotiable paper; and doing all those things reasonably necessary in the pursuit of such activities.
A bank's business may extend over a very large range. In carrying on that business, it becomes necessary for the bank to do many things incidental thereto. Primarily a bank is a place for the deposit of money, but in receiving money for deposit it must do many other things. Whatever it does, however, must not tend to endanger the safe keeping of the funds entrusted to it. Many statutory safeguards have been thrown around the business of banking. Whatever business a bank may do, whatever powers it may exercise, must be done and exercised within the law.
The branches of the banking business are quite clearly outlined and definitely known. We will take up separately the branches of the bank's activity.