pay the amount. The holder would have distinct notice by the face of it that the acceptance was improperly and irregularly made. It would be patent on the face of the paper that the acceptance was a fraud. It would be a violation of official character for personal benefit, and he could not possibly thereby bind his bank.t

$209. Paying Interest. Unless special authority is conferred by the board, a president has no right to agree to pay interest on deposits. It is no part of the ordinary business of banking to receive deposits of money on interest, and this can be done only when the directors direct such a course."

$ 210. Compromise. If there be any matter which more than any other falls within the scope of the duty of directors it is that of compromising debt, because it not only affects the prosperity of the institution, but may involve its very existence. Necessity does not require the president to exercise his judgment alone as to it; indeed the proper management of a bank dictates that he should not do so, and it is not, therefore, a matter incident to the performance of his duty.

$211. Authority Less than Directors'. The qualified authority of directors to make contracts with their bank does not extend to the president, or other officers. When these are made between one or more of their number and the bank all or several of the directors are supposed to have knowledge of the proposed terms to take part in the deliberations preceding its adoption. But such an exercise of authority by several directors is very different from the exercise of it by a president, or other officer, without the knowledge of the board. It is true that the president does many things in which he is interested as well as his bank, which stand on the firm ground. of ratification, and which are done without any authority Rhodes v. Webb, 24 Minn., 294.

t Claflin v. Farmers and Citizens Bank, 25 N. Y., 298.
"Fulton Bank v. N. Y. & Sharon Canal Co., 4 Paige, 127.

▾ Wheat v. Bank, 5 S. W. Rep., 305; see also § 163.

whatever, or are repetition of acts, perhaps, which have been done many times and always with the bank's approval."

§ 212. Imputation of Knowledge. Whenever information is given to a president for the purpose of transmission through him to his bank, the law will regard the bank as having the knowledge, whether the president has communicated it or not.*

Notice to the president that stock standing on the books of the bank in the name of a person is held by him in trust for another, is notice to the bank. There is no other officer to whom it could be made with more propriety. It would be equally available if made to the cashier or to a director. In the same way the president's knowledge of the record of a mortgage would be imputed to his bank. And especially the notice of a suit, delivered to him, or any other of the bank's officers,, would be regarded as given to the bank. Even when not acting officially, or when away from his bank and not attending to its business, he ought to have the interests of his bank in mind, and when he acquires information which would bind his bank if conveyed to him in an official manner, it ought not to be less effective if acquired in another way. It makes no difference where he receives information, it is his duty to transmit it to his bank. It is his duty to do so however or whenever acquired, because his knowledge binds the bank."

8213. Usage and Ratification. These have an important part to play in the acts of a bank president. Possessing but little inherent authority, his authority to do the business of the bank requires a very great enlargement. While this is done by general and special action of the board, his authority has also been enlarged by usage, while numerous acts subsequently receive the assent of his co-directors in various ways." w Bolles on Bank Officers, $350.

* Washington Bank v. Lewis, 22 Pick., 24; National Bank v. Norton, I Hill, 575.

y Porter v. Bank of Rutland, 19 Vt., 410; Savings Bank v. Holt, 58 Vt., 166; . Eastman v. Coos Bank, I N. H., 23.

z Fulton v. N. Y. & Sharon Canal Co., 4 Paige, 127.

Village of Pt. Jarvis v. Bank, 96 N. Y., 550.

b Norawetz on Priv. Corp., § 537

No formal action is positively necessary to ratify the acts of the president. If the directors are in the habit of giving their assent separately when not assembled as a board, such action will bind the bank. Far more often, however, ratification is inferred from an informal acquiescence in his acts, or approval of them."

$214. Bonds. The president, being one of the chief stockholders and president of the board of directors, and therefore a man of prominence in the community, is not required to give bonds to secure the bank should he fail to faithfully perform his duties. Of course there are cases where bank presidents have gone wrong, but these are, fortunately, very few when compared to those who are true to their trust.

$215. Power to Secure Debt. The earlier view of the limited authority of a president is changing. One reason for this change of view is that he is a far more active officer than he was formerly, especially in the smaller banks and outside the large cities. Once, the cashier was the chief manager of these institutions very generally, but now the president is often chosen with the expectation that he will thus serve. It has therefore been decided that to secure a debt he can take property, cattle for example, even though they may be encumbered by other liens. "At any rate, after having had them and received the property, it cannot, while enjoying the fruits of the transaction, be absolved from the performance of its obligations to others assumed by its officers as a means of getting possession of the property, on the plea that its acts were ultra vires." And in such a transaction the letters written by the president concerning it may be introduced against the bank in a legal controversy relating thereto."

§ 216. Duty to Sign. The president, with the cashier, must sign all documents conveying real estate, all certificates Bank v. R. & W. R. R. Co., 30 Vt., 159.

d Hoyt v. Thompson, 19 N. Y., 207.

• Bank v. Emery, 78 Texas, 498; Bolles' National Bank Act, § 55a.

of stock to the shareholders, and all circulating notes. He, or the cashier must sign and verify all reports which are to be made by the association to the Comptroller of the Currency. He also verifies the installments of stock, statements, returns for taxation, and all papers made to the Comptroller. § 217. Salary. This is a matter which varies a great deal. In small banks, where the business is entirely managed by the cashier, and the president has but little more to do than the other directors, he sometimes charges nothing for his services. In large banks, where all his time must be given to the work and many duties devolve upon him, he commands a large salary. Some bank presidents receive as high as fifteen thousand dollars a year.

In large city banks it is supposed to be desirable that the president shall possess an independent income and should not be engaged in any other business, as this might divert his attention from the bank, and in the case of personal embarrassment he might be tempted to seek relief from the means in his official hands. Notwithstanding this general opinion many banks are presided over by merchants.

The failure of many banks is due directly to the fact that the president and directors have outside interests, often with large capital invested, which render their views narrow and partial. Their business requires greater attention at critical times and the bank must suffer the loss of their counsel; less attention is given to the paper discounted, or the board neglects entirely to attend to the discounts; greater responsibilities are thrown on the cashier and the other officers, and the downward road is struck.