object to its accuracy within any specific time. Therefore it is always open to him after any lapse of time to object to it, precisely as it is open to any person to object to the accuracy of an account rendered to him by one with whom he has financial dealings.

[In this connection see also the chapter on Customers and Depositors.]

Practice.

Where to suit by a corporation the general issue is pleaded, the corporation must prove its legal existence. In New York it was held that even the Bank of the United States was not entitled to be excepted from this rule.1

Where a suit to recover upon worthless bills, which have been issued by a banking corporation, is brought against those who are alleged to have been the officers and directors of the corporation, the charter must be proved, if its existence is necessary to make the bank a corporate body.2

Parol and Record Evidence.

That a matter is of such a nature that it ought to appear, or might naturally be expected to appear, upon the records or the books of the bank, is no objection to a substantiation of it by parol testimony. This rule is not affected by the fact that the bank offers its books and records, in which no such matter appears. For there is no necessary legal obligation upon a bank, unless by virtue of express imperative legislation, to keep any record, or a thorough record, even of the formal votes of the board of directors. And though express legislation should in any case require such a record to be kept, yet the requisition would probably be only directory in its nature, and if neglected the vote would still remain equally valid, though' unrecorded.

1 United States Bank v. Stearns, 15 Wend. 314. since been dispensed with in New York by special Bank of Genesee v. Patchin Bank, 3 Kern. 309. 2 Gardner v. Post, 43 Penn. St. 19.

But this requirement has statute (2 R. S. 458, § 3).

So also authority, sanction, and ratification, though properly the subject of recorded corporate action, may all be based upon conclusive presumptions of law growing out of acts and dealings and other matters wholly independent of any proceedings appearing of record or capable of so appearing. If the party to the suit seeks to show facts and circumstances which either prove a vote or other corporate action to have been had, or which by legal implication raise in his favor a presumption of such vote or action, the effect of which presumption the law will not allow the corporation to evade by showing that no such vote or action was taken, he may do so by any means in his power. He cannot be shut off from his rights because the means of proving them are not furnished, as they ought to be, by the corporate records. Hence it is a sound rule that the absence from corporate records of notice of a fact, which if it existed ought to be stated there, is not conclusive of the non-existence of that fact and does not preclude positive parol testimony offered to establish it.1

Isolated Cases.

In a suit by a bank upon a note the defendant set up in defence that a former cashier of the bank had failed to credit him with some of his deposits, amounting in all to a considerable sum. But the court held that this showed no defence. The matter was too remote to give rise to a legitimate inference in favor of the defendant.2

The allegation against a bank of negligence in not maintaining a proper supervision for the purpose of detecting frauds or defaults of officers or agents is sufficiently met by the allegation and proof that the bank has taken the customary and uniform method, adopted presumably by other banks generally, with the object of discovering such matters.3

1 Concord v. Concord Bank, 16 N. H. 26; Edgerley v. Emerson, 3 Fost. 555. 2 Lime Rock Bank v. Hewett, 52 Me. 531.

3 Manhattan Co. v. Lydig, 4 Johns. 377.

In a suit upon a check payable to bearer, or to "A. or bearer," evidence to show the holder to be the legal owner or legally entitled to hold and sue upon the same is needless. Such paper passes by delivery and the mere fact of possession, without more, is prima facie evidence of rightful ownership.1

1 Cruger v. Armstrong, 3 Johns. Ca. 5. See also chapter on Checks, pp. 241 312.

CHAPTER XII.

THE NATIONAL BANKING ACTS.

THE questions which have arisen under these acts are not capable of being referred to any general principle. Of necessity they concern only the construction which is to be placed upon certain passages in the law. The simplest and most satisfactory method of dealing with the adjudications which have been rendered in this department of our topic would therefore seem to be to give a simple schedule of them, with the necessary references to the sections to which they relate.

Organization.

Section 6. Until the "organization certificate" has been made in compliance with the requirements of this section there can be no legal organization of the association. Persons who fail to unite in such certificate, by setting their signatures thereto, are not members of the association. Burrows v. Smith, 10 N. Y. 550.

That the plaintiff, suing in the corporate character of a national banking association, existing and organized under and by virtue of the act of Congress, is not legally such, and therefore is not entitled to maintain a suit as such, by reason of having failed to comply with the exact requirements of the act, is a matter which the defendant may fairly plead. But it cannot be tried by affidavit, on motion. National Bank of the Metropolis v. Orcutt, 48 Barb. 256,

Re-organization of State Banks.

The Grocers' Bank, established under State laws, reorganized as the Grocers' National Bank, under the act of Congress. When the Grocers' Bank ceased to exist it had a right of action against an officer for fraudulent misapplication of its assets. Held, that this right of action was a part of the assets of the State association, and, as such, passed to the national association, and might be prosecuted by it. Grocers' National Bank v. Clark, 48 Barb. 26.

A State bank, re-organizing under the act as a national banking association, carrying with it all its assets carries also all its debts and liabilities, which the national bank will be held to discharge. One who at the time of the re-organization is a debtor of the State Association, and also a holder of its bills, can compel the national bank, although insolvent, to receive these bills in payment of the debt. But, aliter, where the debt ran originally to the national association, and was put in judgment, and the bills of the State bank were subsequently obtained by the debtor. Thorp v. Wegefarth, 56 Penn. St. 82.

President and Directors.

Under the act of February 25, 1863, section 11, it was held that the directors had full power to remove the president at any time, whether by-laws had been adopted by the association and approved by the comptroller or not. Taylor v. Hutton, 43 Barb. 195. See ante, p. 96.

Courts.

Act of 1864, section 50. A District Court of the United States is a "court of record of competent jurisdiction," within the meaning of the act. Platt's Petition, 1 Bened. C. C. 534.