in circulation as money, shall be signed by the president or vicepresident and cashier thereof.

(Former section 54; R. S., 1527.)

See sections 63, 69, ante.

2. Where a bank made an agreement, alleged to be defective as not signed by cashier, with one from whom it had borrowed money, held, lender might recover for money had and received, whether agreement was defective or not. B. v. N. Y. Bk. Co., 2 Sandf. Ch. 23.

3. A promise or agreement of a corporation within the scope of its legitimate purposes, through its officers, is valid, though not bearing its corporate seal. The doctrine that no corporate act can be binding without being in writing or under the corporate seal is no longer maintained. Leinkauf v. Calman, 110 N. Y. 50, 17 N. E. 389.

4. It seems that a contract, or bill, or note, not void on its fact, is valid as to and may be enforced by a holder in good faith, although not signed by the requisite officers. 4 Hill, 442.

5. It is no part of the business of a bank to act as agent through its president in selecting attorneys and compromising claims for outside parties, and the bank cannot be held liable for such transactions of its president when he had no special authority, and the bank has been in no way benefited thereby. Ryan v. Manufacturers and Mechanics' Bank, 9 Daly, 308.

6. Where a debt of considerable magnitude was owing a bank, and no other mode of avoiding its jeopardy or loss appeared than by purchasing property of the debtor in foreclosure, Held, that it was one of the fiscal affairs of the bank, directly within the authority of the president, to make such purchase, and that it was not improper for him to take title in his own name, the bank being unable to hold title, and that where he subsequently mortgaged the property for the benefit of the bank, which mortgage was foreclosed, and a deficiency resulted, that the bank was liable therefor, and to indemnify the estate of the president against any loss in respect thereto. Brown v. The Mechanics and Traders' Bank, 35 State R. 665, 12 N. Y. Supp. 861.

7. A cashier of a bank has, as incident to his office, implied authority to borrow money for it, in the absence of any statutory restraint, to secure the loan by pledge of its property or funds; and, as against third persons, the assumption of such authority by the cashier will conclude the bank. Coats v. Donnell, 94 N. Y. 168.

8. Where a cashier of a bank employs a firm of attorneys to collect certain claims without the formal authority of the board of directors, said firm acting under the supervision of the general counsel of the bank regularly employed by the bank. Held, that such employment was within the general scope of the authority of the cashier. Root et al. v. Olcott, 42 Hun, 536.

9. A cashier is the business officer of the bank, but only in the sense of one who transacts, not one who regulates or controls its affairs. The directors are the mind, and the cashier the hands of the corporation. They are also likened, the directors to the judge, and the cashier to the clerk of the court. The bank is not responsible for acts of his which are discretionary, semi-official and solely within the prerogative of the directors, though done in good faith, under color of authority, and affecting an innocent dealer. An enumeration of the general

powers and duties of a cashier may be stated as follows: "Collection and payment of debts power of borrowing money in ordinary course of daily business of the bank-power to draw check upon its money in other institutions - power to indorse negotiable paper - power to conduct correspondence - power to transfer shares of stock." Also for such acts as are especially authorized by usage, or by acquiescence or direct authority of the board, though beyond the scope of his ordinary duties. He cannot compromise a debt. Chemical Nat. Bank r. Kohner, 8 Daly, 533-534; S. C. 58 How. Pr. 267; Ryan v. M. & M. Bank, 9 Daly, 308. 10. Although the cashier and president may, in the ordinary course of business, without the action of the board of directors, dispose of the negotiable securities of the bank, yet they have not the power to pledge its assets for payment of an antecedent debt. State of Tennessee r. Davis, 50 How. Pr. 447.

11. K., defendant's intestate, being indebted to plaintiff's and to two other banks, proposed a compromise, by paying or securing a percentage, which one or both of the other banks agreed to accept if plaintiff would. K. proposed to plaintiff's cashier to secure the specified percentage on its claim by a note with G., as indorser. The cashier thereupon, after consultation with plaintiff's president, and at the request of K.'s agent, wrote to one of the other banks, using paper with the bank heading and signed as cashier, to the effect that plaintiff proposed to take K.'s note, indorsed by G. for the percentage to discharge K. in full on payment thereof. Soon after writing the cashier informed the president, and they concluded not to compromise. When, therefore, the indorsed note was tendered, the cashier refused to accept it, and repudiated the agreement, before this was made known to K., he had settled with the other banks on the terms proposed, and had been discharged. It did not appear that he owed any other debts. K. afterward tendered a certified check for the amount of the compromise. The president and cashier were the active managers of plaintiff's bank. The compromise was not repudiated on the ground of want of authority of the cashier, and no proof was given that he acted without authority. Compromises were of common occurrence in said bank. In an action upon the original indebtedness, held, that the authority of the cashier to act was, under the circumstances, to be presumed; that the agreement made was a valid composition agreement, and after performance by the other creditors, it was too late to recede. It seems that had there been proof that the cashier had exceeded his authority, the question would have been different. Chemical Nat. Bank v. Kohner, 85 N. Y. 189.

12. Where the duty is imposed upon the cashier of a bank of carrying on its business, he cannot be held responsible for a neglect of duty in not consulting other officers of the bank or committees, whom by the by-laws he is required to consult in making discounts, where said committees hold no meetings, and the officers systematically absent themselve from the performance of their duties. Second Natl. Bank of Oswego v. Burt, 93 N. Y. 233.

13. As to powers of president and vice-president of corporations in general, see full presentation of authorities in note to Wait v. Nashua Armory Asso., 14 L. R. A. 356.

14. Where a bank president has a note, made by himself and others, and payable to himself as trustee, discounted by his bank, he has no authority to bind the bank to an agreement for its payment out of the results of the investment of such discount proceeds, nor to a renewal note by one maker only. Fowler r. Walch, 119 App. Div. 542.

15. A bank cashier having full general authority to receive additional security for loans due to the bank may receive security for the bank although he has a personal interest as indorser, on the note in question. Where he so receives collateral and sells it to cover his defalcation the bank is liable for conversion. First Nat. Bank of Sing Sing v. Sing Sing Gas Mfg. Co., 120 App. Div. 542. 16. Cashier of a bank is presumed to be the principal executive officer and as such is generally intrusted with the bank's securities. Davenport v. Prentice, 126 App. Div. 451.

17. That a bank president allows the cashier to have physical control over securities is not necessarily proof of president's negligence. His duty is to be measured by the circumstances of each case. Davenport v. Prentice, 126 App. Div. 451.

18. As to illegal agreements made by president in which he had a personal interest, and the non-liability of bank therefore, see Bank of Le Roy v. Purdy, 100 App. Div. 64; People v. Mercantile Co-op. Bank, 104 App. Div. 219.

§ 74. Rate of interest. Every bank and private and individual banker doing business in this state may take, receive, reserve and charge on every loan and discount made, or upon any note, bill of exchange or other evidence of debt, interest at the rate of six per centum per annum; and such interest may be taken in advance, reckoning the days for which the note, bill or evidence of debt has

to run.

The knowingly taking, receiving, reserving or charging a greater rate of interest shall be held and adjudged a forfeiture of the entire interest which the note, bill of exchange or other evidence of debt carries with it, or which has been agreed to be paid thereon. If a greater rate of interest has been paid, the person paying the same or his legal representatives may recover twice the amount of the interest thus paid from the bank or private or individual banker taking or receiving the same, if such action is brought within two years from the time the excess of interest is taken. The purchase, discount or sale of a bona fide bill of exchange, note or other evidence of debt payable at another place than the place of such purchase, discount or sale at not more than the current rate of exchange for sight draft, or a reasonable charge for the collection of the same, in addition to the interest, shall not be considered as taking or receiving a greater rate of interest than six per centum per annum.

The true intent and meaning of this section is to place and continue banks and private and individual bankers on an equality in the particulars herein referred to with the national banks organized

under the act of congress entitled "An act to provide a national currency secured by pledges of United States bonds, and to provide for the circulation and redemption, thereof," approved June third, eighteen hundred and sixty-four.

(Former section 55, L. 1900, ch. 310; R. S. 1528, 1529.)

See Penal Law, § 2400.

1. The effect of chapter 567, Laws of 1880, was to repeal the penalties imposed by chapter 163, Laws of 1870. Nash v. White's Bank of Buffalo, 105 N. Y. 243, 11 N. E. 946, reversing 37 Hun, 57.

2. It was agreed that P., unincorporated and doing a banking business, should lend money on promissory notes; and that S. should pay, besides legal interest thereon, one-fourth of one per cent. exchange on the face of the notes, and said notes were discounted at Rochester and payable in New York City. There was no rate of exchange between those cities, and it was intended that such extra interest should be payment for collecting the notes. Held, that such agreement was relieved from the taint of usury by section 68. Held, also, that plaintiffs P. were "private bankers," as used in section. Perkins et al. v. Smith et al., 41 Hun, 47.

3. The penalty recoverable from a National bank, under act of congress (U. S. R. S. § 5198, U. S. Comp. Stat. 1901, p. 3493), for usury, is twice the amount of interest paid in excess of legal rate, and not twice amount of entire interest. Forfeiture of entire interest attaches only when action is brought to enforce usurious contract (45 N. Y. 446 and 46 N. Y. 644 distinguished). A debt contracted or obligation given for a usurious loan made by a State or National bank is not void, but the forfeiture is limited to interest. The National Bank of Whitehall v. Lamb, 50 N. Y. 95; Farmers' Bank of F. v. Hale, 59 N. Y. 53, overruled. See note to next section. Hintermister v. First National Bank, 64 N. Y. 212; S. C.

3 Hun, 345; 5 T. & C. 484.

4. To same effect, Merchants' Bank v. Freeman (citing 64 N. Y. 212), 15 Hun, 360; Marine Bank v. Fiske, 9 Hun, 366; Atlantic Bk. v. Savery, 18 Hun, 42; 82 N. Y. 303.

5. Banking corporations are taken out of the general usury laws of the State, and, as far as usury goes, are only amenable to this act. Farmers' Bank v. Hale,

59 N. Y. 53.

6. The including (charging) of a percentage, as the difference in the rate of exchange between the place of payee's residence and place of payment, is not, per se, evidence of usury, where the note is made so payable for the accommodation of the maker. Merritt v. Benton, 10 Wend. 117.

7. Since the intention of this act (section 74) was to place State and National banks on an equality in respect to interest on loans, it should receive the same interpretation as the Act of Congress, and as this has been interpreted by U. S. supreme court (1 Otto, 29, 23 L. ed. 196), the same interpretation will be given to the State law. See note preceding section. This act was a transcript from the Act of Congress; it was given an interpretation by the court of appeals, but the U. S. supreme court, having given the act the interpretation above set forth, the court of appeals overrules its former decisions in conformity therewith. Hintermister v. First National Bank, 64 N. Y. 212.

8. This statute operates retroactively, and takes away the previous penalty for usury. Bank of Monroe v. Finlay, 6 Hun, 584.

9. The usury law of this State is, in effect, repealed as to State banks organized under the Law of 1838. Farmers' Bank of F. v. Hale, 15 Abb. Pr. (N. S.) 276.

10. Where a State bank has in good faith discounted negotiable paper without notice of usury, the defense of usury is not available. But as to notes purchased by the bank with knowledge of the usurious origin such defense is good, and Banking Law provisions as to interest will not prevail. Schlesinger v. Lehmaier, 191 N. Y. 69. See, also, Schlesinger v. Gilhooly, 189 N. Y. 1. (See notes under National Bank Act post, as to interest.)

§ 75. Interest permitted on advances on collateral security. Upon advances of money repayable on demand to an amount not less than five thousand dollars made upon warehouse receipts, bills of lading, certificates of stock, certificates of deposit, bills of exchange, bonds or other negotiable instruments, pledged as collateral security for such repayment, any bank or individual banker may receive or contract to receive and collect as compensation for making such advances any sum to be agreed upon in writing by the parties to such transaction.

(Former section 56; R. S. 2515, L. 1882, ch. 237.)

§ 76. Deposit of banks and individual bankers with superintendent. -Every bank and individual banker heretofore or hereafter authorized to do business, not having given notice of intention to close the business of banking, shall, before commencing or continuing such business, have and keep on deposit in the banking department in addition to the deposit required to secure circulating notes, stocks of this state or of the United States bearing interest, to the amount of one thousand dollars, which shall be held by the superintendent of banks as a pledge of good faith, and guaranty of compliance with the banking laws of the state on the part of such bank or individual banker. The proceeds of such stock or the interest thereon, or so much thereof as may be necessary, may be applied by the superintendent to the payment of any penalty incurred by, or the assessment imposed upon, the bank or individual banker, for whom such deposit is held. The superintendent may, in his discretion, maintain an action in his name of office against any bank or individual banker for the recovery of any penalty incurred by, or lawful assessment imposed upon, such bank or individual banker.