People's Bank v. National Bank - 101 U.S. 181 (1879)
U.S. Supreme Court
People's Bank v. National Bank, 101 U.S. 181 (1879)
People's Bank v. National Bank
101 U.S. 181
A. made his promissory note to his own order, duly endorsed it to the order of B., and delivered it to a national bank. The latter negotiated it to B. and applied the proceeds thereof to the cancellation of a prior debt of A. With the knowledge and consent of the president and cashier, who were also directors, but without any notice to or authority from the board, C., one of the directors and vice-president of the bank, guaranteed, at the time of the transaction, the payment of the note at maturity by an endorsement thereon to that effect in the name and on behalf of the bank. The note was duly protested for nonpayment, and the bank notified thereof. B. brought this action against the bank.
1. That the bank was not prohibited by law from guaranteeing the payment of the note.
2. That it is to be presumed that C. had rightfully the power he assumed to exercise, and the bank is estopped to deny it.
3. That the bank, by its retention and enjoyment of the proceeds of the note, rendered the act of C. as binding as if it had been expressly authorized.
The facts are stated in the opinion of the Court.