Lloyd v. The West Branch Bank

• Decision Date: 01 July 1850
• Citation: 15 Pa. 172
• Parties: Lloyd <I>versus</I> The West Branch Bank.
• Court: Pennsylvania Supreme Court

15 Pa. 172

Lloyd versus The West Branch Bank.

Supreme Court of Pennsylvania.

July 1850.

ERROR to the Common Pleas of Lycoming county.

COPYRIGHT MATERIAL OMITTED

The case was argued by Maynard, for plaintiff in error.

Armstrong, for the Bank.

The opinion of the court was delivered July 1850, by COULTER, J.

The recognised and known functionaries, and especially the officers of a bank, are held out to the world as having authority to act according to the general usage, practice, and course of the business of such institutions.

If it were otherwise, there would be no safety for the public in doing business with any one of such institutions; because their charters differ in some respects, and individuals cannot be presumed to carry these documents in their pockets as a vade mecum. Their acts, therefore, within the scope of such usage, practice, and course of business, will bind the corporation, in favor of third persons transacting business with them, and who did not know at the time that the officer was acting beyond and above the scope of his authority. The property of stockholders is not bound by the irregular unauthorized transactions or declarations of their officers, beyond the just sphere of their legal action. But if stockholders, without objection or interference, witness a course of business, usage, and practice on the part of their officers, this justifies third persons in believing that such usage of the officers is sanctioned by the principal and authorized by law. The first questions which arise in this case are, whether the statute authorizes such kind of deposites as was made by Oliver in this instance; and second, whether, by general usage and custom of the bank, they were authorized and sustained. The statute does not authorize such deposites. It never was designed, by the framers of the statute, that the bank should be converted into a kind of pawnbroker's shop. By the 17th article, for the government of banks, in the act of 25th March, 1824, it is provided that the banks shall make a return of their condition to the legislature, in which, among other things, they are required to set forth their deposites. The universal course of business shows what the legislature meant by "deposites" — that is, money, current money, received by the banks as such, and not old clothes or ear-rings, or, as in this case, a bundle scaled up, and containing Tide Water Canal notes, the issuing of which had been interdicted, and in relation to which it would be a violation of duty in the bank to countenance and aid in their circulation. But if they had been received by the cashier as money, and had been, as such, mingled with the funds of the bank, and credited on the books as so much money, the corporation would be liable, and their redress would have to be sought from the cashier. But here they were sealed up in a package and put into a safe, by the cashier, to accommodate Oliver.

The next question is, whether there was any such general usage, custom, and practice of the cashier of that bank, to act as a voluntary bailee, without reward, in such like cases, as to make the corporation liable for his acts. I have not been able to see such evidence on the paper-book. There is no evidence on the subject, except that, at the same time, it appears that Cowden put a bundle of his, sealed up in the same way, into...