*But on a question in the Court of Chancery [*264] whether a written instrument should not be interpreted differently from its apparent effect, by [*265] reason of its differing from the intent of one of *the contracting parties, which it was alleged was [*266] known to the other, the evidence amounting only to show that his agent had such notice, was not deemed sufficient to alter the apparent meaning of the contract.(g)

Notice, in order to affect the principal in respect to a contract concluded by the interposition of an agent, must be to an agent empowered to treat, and not to one who is merely employed to carry proposals from one side to the other.(h)

estates were subject to a former encumbrance, of which the agent was conu⚫ sant. A bill was filed to set the second encumbrance out of the way, and postpone it to the first, upon the ground of notice. Lord Hardwicke decreed accordingly, and said, "If the wife placed confidence in I. N., no matter on whose recommendation; if she relied enough on her husband to take his recommendation, it is sufficient." Le Neve v. Le Neve, Ambl. 436, 439.

[In a recent case, where the purchaser of an estate employed the vendor's agent, who had actual notice of an existing encumbrance which affected it, it was decided by the late Master of the Rolls, that such notice to the agent operated constructively as a notice to his employer, notwithstanding the purchase was made under the sanction of the Court of Chancery, and an infant was interested in it. Toulmin v. Steere, 3 Meriv. Rep. 210.]

(g) Shelborne v. Inchiquin, 1 Br. Ch. Ca. 351.

(h) Ib. In Read v. Bonham, 3 B. & B. 147, notice of abandonment given to an agent of Lloyd's at Calcutta, seems to have been considered by the Court of Common Pleas, (dissent. Richardson, J.) as notice to the underwriter, although the agent refused to accept it saying, that he had no authority to do so. But see Drake v. Marryatt, 1 B. & C. 473, where the instructions from the committee at Lloyd's to their agents are particularly declared that they are not to receive notice of abandonment; and see also the observation of the court upon the above case. Notice to the president, cashier, agent, or other person authorized to act in the premises, of a banking or other incorporated company, or joint stock company, or other association, while acting within the scope of his authority is, clearly, notice to the bank, corporation or company. National Bank v. Norton, 1 Hill, 578; Fulton Bank v. New York and Sharon Canal Co. 4 Paige, 127; North River Bank v. Aymar, 3 Hill, 274, 275; Boggs v. Lancaster Bank, 7 Watts & Serg. 331; and see The Susquehannah Ins. Co. v. Perrine, Watts & Serg. 348. Notice to an individual director of a bank

[*267]

*SECTION 3.

Effect of an Agent's Declarations or Admissions.

1. The admissions of agents concerning those transactions in which they are employed, are for some purposes

is not in general notice to the bank; still less notice to a mere stockholder. (Housatonic and Lee Banks v. Martin, 1 Metc. 294 ;) but where the director is acting under some special trust or confidence, in relation to the affairs of the bank, although associated in the transaction with others, notice to him will be binding on the institution. So, where certain bills of exchange were sent to one of the directors of a bank, to be discounted for the benefit of the drawer, and the former, who was at the time a member of the board which ordered the discount to be made, received the avails, alleging the discount to be for his own benefit; it was held that the bank was chargeable with knowledge of the fraud, and could not therefore recover upon the bills. Nelson, C. J. delivering the opinion of the court said: "It appears that these bills were transmitted by the drawer to Williams, one of the directors of the bank, for the purpose of having them discounted for the benefit of the former; that the director put his own name upon the paper, and procured it to be discounted for himself, and appropriated the avails accordingly; he, at the time, being one of the five directors constituting the board which discounted the paper. His associates had no notice of the fraudulent use of the bills, and supposed the discount was made in good faith for himself. The material question which arises upon this branch of the case is, whether or not the bank is chargeable with notice of the fraudulent conduct of their director, while thus acting in the transaction of their business, as one of the members of the board.—The general rule is undisputed that notice to the agent is notice to the principal, if the agent comes to the knowledge of the fact while he is acting for the principal in the course of the very transaction which becomes the subject of the suit.-Two grounds have been strongly relied on, for the purpose of taking this case out of the operation of this general rule, viz. 1. That Williams, the director, should not be regarded as acting in behalf of the bank, but for himself, while engaged in the perpetration of the fraud in getting the paper discounted; and 2. That not being an agent with full and complete authority to discount the paper, but being only one of five constituting a board competent to do the act, the knowledge of one, or the fraudulent act of one, should not be deemed a constructive notice to the principal: in other words, that the fact must be communicated to the board-at least to a majority of the members-to bring the case within the rule. It is not true in point of fact, that Williams was not acting in behalf of the bank at the time of the transaction in ques

equivalent to the acknowledgment of the employers themselves. Thus the acknowldgment of an agent has been held to prevent the operation of the Statute of Limitations.

tion. He was present as one of the board of directors, engaged in the business of consulting and advising with his associates in respect to the character of the paper presented, at the time, for discount; and advised, and doubtless recommended, in his character and capacity as such director, the bills in question to the favorable notice of the board. It is fairly to be inferred, moreover, as well from the facts in the case, as from the natural and probable influence resulting from his position, that the bills in question were discounted in consequence of his being and acting as such director at the time. It is no answer, therefore, to say, that Williams is not to be regarded as acting in his capacity of director in behalf of the bank, but for himself, while engaged in perpetrating the fraud; for the position is a contradiction of the obvious truth of the case. Nor is there anything novel or singular in the idea, that an agent may be guilty of fraud and deception in transacting the business of his principal; or in the law, that holds the latter responsible for the consequences to third persons. Indeed, many of the cases where the principal is charged constructively through the agent, are cases where the former has been subjected to liability, or suffered loss by reason of the fraud of the agent; as in the case of fraudulent representations, or a fraudulent concealment of material facts by the agent when engaged in transacting the business of the principal.-I agree that notice to a director, or knowledge derived by him, while not engaged officially in the business of the bank, cannot and should not operate to the prejudice of the latter. This is clear from the ground and reason upon which the doctrine of notice to the principal through the agent rests. The principal is chargeable with this knowledge for the reason that the agent is substituted in his place, and represents him in the particular transaction; and as this relation, strictly speaking, exists only while the agent is acting in the business thus delegated to him, it is proper to limit it to such occasions. But in this case, as has been already observed, Williams was a member of the board, participating at the time in the discounting of bills and notes as one of the directors of the bank; and as such procured the discount of the paper in question, avowedly for his own benefit, but knowing at the time, that it belonged to Davis, one of the defendants. So far, therefore, as he may be regarded as representing the bank, in transacting its business at the board, the institution must be considered as having knowledge of the fraudulent perversion of the bills from the purpose for which they were drawn. To this extent his acts and knowledge concerning the object and ownership of the paper are to be deemed the acts and knowledge of the institution itself. -It is said, however, that Williams was but one of the five empowered by the bank to represent it in this transaction; that the bank is not therefore to be held responsible for his individual fraud at the time, nor can it be

In one case an agent had been constantly employed to pay for work of a certain description, and the workmen

chargeable with his knowledge of the facts under which the paper in question was discounted; and that such knowledge is chargeable only, when the agent has full power to act for the principal in the particular case. It is not to be denied, that if a principal employs several agents to transact jointly, a particular piece of business, he is equally responsible for the conduct of each and all of them, while acting within the limit and scope of their power, as completely so as he would be for the conduct of a single agent, upon whom the whole authority had been conferred. He cannot shift or avoid this respon sibility by the multiplication of his agents. It is also clear, that the corresponding responsibility of each of the several joint agents to the principal, for the faithful discharge of their duties, is as complete and perfect as in the case of a single agency'; and any prejudice to the principal, arising from fraud, misconduct or negligence of either of them, would afford ground for redress from the party guilty of the wrong. One of the grounds for charging the principal with the knowledge possessed by the agent is, because the latter is bound to communicate the fact to the former, and is liable for any prejudice that may arise from a neglect in this respect; and hence the law presumes that the principal has had actual notice. Now, the duty of any one of the joint agents is as obligatory upon him in this respect, as if he had possessed the sole power in the matter of the agency; and any prejudice resulting from the neglect, would afford a like redress. Again; so completely is the principal represented by the agent, while acting within the scope of his authority and employment, that the third party, for most purposes, is considered as dealing with the principal himself. In the case of a contract, it is deemed the contract of the principal, and if the agent at the time of the contract, make any representation or declaration touching the subject matter, it is the representation and declaration of the principal. Upon these views, it seems to me consistently and reasonably to follow, that in the case of a joint agency by several persons-as of the directors of a bank-notice to any one, or the acts of any one, while engaged in the business of the principal, is notice to the bank itself. The corporation is acting and speaking through the several directors who jointly represent it in the particular transaction. In judgment of law it is present, conducting the business of the institution itself; the acts of the several directors are the acts of the bank; their knowledge is the knowledge of the bank, and notice to them is notice to the bank.-The hardship of holding the plaintiffs responsible for the fraudulent conduct of a single director, has been alluded to; but between two innocent parties in this case, where should the responsibility fall? The plaintiffs appointed the director, and thus held him out to their customers and the public, as entitled to confidence. They placed him in a condition where he has been enabled to commit this fraud. It has been said, that he was the agent of Davis in procuring the discount of the paper, and not of the bank. The answer is, that

had always been referred to him; his acknowledgment within six years of a debt due for work of that description

the bills were placed in his hands as a director and because he was one. They were placed there for the purpose of being brought before the board, that they might be passed upon in the usual and customary way of procuring accommodations. Thus far he may be regarded as the agent of Davis; but beyond this, the action upon the bills was the action of the board, and the discount of the board, which was composed of the admitted agents of the plaintiffs." The Bank of the United States v. Davis, 2 Hill, 451, 461, et seq. The above decision has been cited more at length, as its authority is drawn in question, Story's Agency, 140, (b); where the author, in a note, quotes the language of Mr. Justice Rost, in delivering the opinion of the court in Louisiana State Bank v. Seneral, 13 Louis. Rep. 525, 527, as follows: "It was proved at the trial, that the note was given in payment of land sold by Mrs. Peychaud, and was delivered to her husband, Anatole Peychaud, who had signed with her the deed of sale. That deed contains a clause, that the note upon which this action is brought, shall not be negotiated, nor the payment thereof exacted, until the property sold shall be fully released from all liabilities resulting, or to result, from certain general mortgages then existing upon it. Peychaud, being at that time a director of the Louisiana State Bank, offered the note for discount before the mortgages were raised; was present at the board when it was acted upon; took no part in the discount of it, and gave no information to the board in relation to the restrictions contained in the act of sale. The note was discounted for his benefit, and the defendant now contends, that he was the agent of the bank, and that the knowledge of the agent being the knowledge of the principal, the plaintiffs are to be considered as having received notice, and ought not to recover. If the knowledge of those facts had been brought home to the president or cashier, we would unhesitatingly say, that the plaintiffs were bound by it, they being the executive officers of the bank, upon whom all notices and process may be served. But directors are not officers of the bank, in the proper sense of the word, nor have they individually any power or control in the management of its concerns. They act collectively and at stated times, and have otherwise no more to do with the general management of the institution than the other stockholders. The director, in this instance, had a direct interest in suppressing the information he possessed; and it would be extending constructive notices beyond all reasonable bounds, to say, that the plaintiffs must be held cognizant of facts, which are proved to have been intentionally concealed from them, by a person who, individually, was neither their officer nor their agent."

It must in general be assumed, that the agent'possesses knowledge co-extensive with that of his principal, otherwise the principal might, through the ignorance of his agent, be enabled to commit a fraud. M'Lanahan v. The Uni