Although the apparent scope of the authority of bank officers is as stated in the preceding section, that apparent authority may be greater owing to the fact that the governing authority in the corporation has permitted to the particular officer an apparent authority greater than he would otherwise enjoy. The corporation is bound by the action of its governing body. That governing body permits an agent to assume greater power than he is entitled to enjoy. From such conduct an agency by estoppel arises.1 On principle it makes no difference whether the agent's acts are authorized by the special charter or articles of agreement, or are contrary thereto; the corporation is bound as to third parties, just as the principal would be bound who defined his agent's authority in a written document and then knowingly permitted him to exercise a greater authority.2 A corporation, by a course of dealing, can commit the whole corporate authority to one particular officer. The limitation is that the officer be not forbidden, by an express general statute or rule of law, from exercising the particular authority.3 So it is held that the directors of a bank, by allowing its cashier to exercise the whole corporate authority, make the bank responsible for the acts of the cashier beyond the scope of his usual authority in other banks.4 But in order to bind the bank, where an officer acts outside the usual scope of his authority, the bank must be a party to the circumstances, or chargeable in some way with knowledge.6 Since such action is by the implied authority of the board of directors, it follows that the bank is bound, where it receives a benefit, whether the act is contrary or not to the special charter or to the articles of agreement.6 The same result ought to follow as to any it at his bank and pocketed the proceeds; the board of directors of his bank was ignorant of the transaction, he alone acting.3 This is a case of notice, and it was rightly held that the bank could not sue on the note, the reason being that, the cashier having acted for the bank in discounting the note, whatever he knew the bank must be held to know. It will be seen from the preceding cases that where two corporations have common officers, and are dealing with each other, the question that arises is sometimes a question of power in the officer and sometimes a question of notice to the bank through an officer. If it is a question of power in the agent, two conditions of fact may arise. The two corporations may have a common officer, but the common officer does not act for either corporation. In such case the fact of the common officer existing is wholly immaterial.4 Or, again, the common officer may act for the one corporation and other officers may act for the other corporation. In such case the fact of the common officer existing is wholly immaterial as to the corporation for which the common officer does not act. But where the same officer acts for both corporations, the rule to be applied is that the agent may contract with himself as agent to the extent of his power; that is to say, the binding force of the contract upon each corporation is to be determined solely by the question of the agent's power given him by that particular corporation.5 If any question of notice arises the rule is very simple. All the knowledge, though uncommunicated, that its agent had present in his mind at the time of the transaction is to be imputed to each corporation. Thus, calling the bank B. and the other corporation A., all that the officer knew,

3 First Nat. Bank v. Pegram, 118 N. C. 671. This case must decide that the cashier had power to make the representation, for it is not conceivable that the court would knowingly permit a wrong judgment to stand. Grant v. Cropsey, 8 Neb. 205. This last case is questionable as an authority. If the bank receives a benefit, the bank will be bound even though the officer's act was a fraud. But the making of the contract is, as a matter of consideration, the reception of a benefit by the bank. See Manhattan Life Ins. Co. v. Farmers' Bank, 10 Blatch. 344.

4 See, for the principle, Pahquioque Bank v. First Nat. Bank, 36 Conn. 325. See the preface to Cook on Corporations. It is not necessary here to recapitulate the authorities upon this question. Of course, to make the corporation responsible for punitive damages, the corporation must have authorized or ratified the tort. Lake Shore Ry. Co. v. Prentice, 147 U. S. 101. But other authorities are contra. See note 11 to Sec. 96, supra.

1 This form of agency is a matter of common application in the law of principal and agent. See Bronson's Executor v. Chappell, 12 Wall. 681; Johnson v. Hurley, 115 Mo. 513.

2 See note 9 to Sec. 120, post, and note 3 following this note. By the rule laid down in Sec. 33, ante, the bank receiving a benefit would be held to be bound, except where the transaction was forbidden by a positive rule of law or a statute, and was not purely ultra vires. That is the doctrine of the Supreme Court of the United States, and yet it is not.

3 If he is, no estoppel arises. Burrows v. Niblack, 84 Fed. R I11, semble; and Kennedy v. California Bank, 167 U. S. 362, applies the principle to a purchase merely beyond the corporate power. But the latter case is wrong on that point. See Sec. 33, ante, and s. C 101 Cal. 495.

4 Pattison v. Syracuse Nat Bank, 80 N. Y. 82; Davenport v. Stone, 104 Mich. 521, rediscounting by cashier; City Nat. Bank v. National Park Bank, 32 Hun, 105, borrowing money by president and fraudulent representations binding on the bank, because the president was permitted to absorb all the corporate power. See also Cox v. Robinson, 82 Fed R 277; Armstrong v. Cache Valley Co., 48 Pac. R. 690; National Bank v. First Nat. Bank, 79 Fed R 961; Carpey v. Dowell. 115 Cal. 677.

5 Wheat v. Bank of Louisville, 5 S. W. R 305. Compare Robinson v. Bealle, 20 Ga. 575. But if the facts are on the books of the bank, knowledge of the directors is presumed. Bank of Carlisle v. Fleming, 44 S. W. R 961.

6Hagerstown Bank v. Loudon Sav. Soc, 3 Grant Cas. 135. This idea seems to contradict the proposition that every man dealing with a corporation is bound to know the authority of its agents as defined in the articles of agreement or charter. But the two things may be reconciled by the consideration that the representation has prevented the ascertainment of the particular course of action with reference to special matters permitted by the corporate direction.7 The bank is likewise bound. These cases may be also treated as cases of acquiescence by the bank.