Farmers and Mechanics' Bank, of Kent Co., v. Butchers and Drovers' Bank. acter of those referred to, are resisted, and the owners of property refuse to be deprived of it, then it will be found that property has rights, and the courts of justice have duties, of which the plaintiff in this action seems to have an indifferent conception. The courts of justice cannot be called upon to aid in enforcing the decrees of these selfcreated judicatories. The confiscation and forfeiture of property is an act of sovereign power; and the aid of this or any other court will not be rendered to enforce such proceedings, or to recognize legal or supposed legal rights founded upon them. After what has been said by Lord ELDON, in Lloyd v. Loring (6 Ves., 773), and by my learned associate, Judge SELDEN, in this case, I will not pursue the subject further. The judgment should be affirmed. The court declined to pass upon the question whether the plaintiff was entitled to sue in the capacity of treasurer, under the statutes of 1849 and 1851, but all the judges concurred in the opinions delivered on the other ground. Judgment affirmed 16 125 120 152 16 125 122 174 THE FARMERS AND MECHANICS' BANK, OF KENT COUNTY, The certification, by an authorized agent, of a negotiable check drawn upon a banking company, is equivalent to the acceptance of a bill of exchange, and imposes upon the bank an obligation to pay the amount for which the check is drawn to the holder, upon demand, at any time before the statute of limitations attaches. A bona fide holder, for value, of a check, negotiable upon its face, and certified to be good by the paying teller of the bank on which it is drawn, whose authority to certify is limited to cases where the bank has funds of the drawer in hand sufficient to cover the check, can enforce the payment of the Farmers and Mechanics' Bank, of Kent Co., v. Butchers and Drovers' Bank. check, although the drawer has not such funds, and the check was certified by the teller, without funds, in violation of his duty, for the mere accommodation of the drawer, and upon his promise that it should never be presented for payment. APPEAL from the Superior Court of New-York city. The plaintiff, a banking corporation of the State of Maryland, brought the action to recover the amount of five checks, drawn upon the defendant's bank by T. A. C. Green, payable to the order of S. W. Spencer, cashier of the plaintiff. The checks were all dated on February 16th, 1852; three were for $1000 each, and two for $1500 each, and each of them was certified upon its face to be good for the amount mentioned therein, by R. Peck, the defendant's paying teller. At the trial, before Mr. Justice BoSWORTH and a jury, it was proved that it was the custom of the paying teller of the defendant to certify checks as good, and his duty thereupon to make an entry of the fact of such certification in a book kept for that purpose. When Green, the drawer of the checks in suit, applied to Peck, the teller, to certify them, he stated that he wanted them to send to the south to deposit for a short time, until other securities should be substituted for them; and he promised that they should not be so used as to become a charge against the bank, but should be returned to the teller. Peck testified that he had no authority from any officer of the bank to certify the checks in question, and never informed them that he had certified these checks, nor did he enter them in the certification book. The defendant's president testified that liberty was not given to the teller to certify checks when the drawers had not sufficient funds in the bank, except by special permission; and that he had instructed the teller to be careful not to certify checks, unless the drawers had funds in the bank to cover them. The checks in suit were, it was proved, forwarded to the plaintiff, and by it applied, as cash, in payment of installments due from Green, and others for whom he acted as agent, upon capital stock in Farmers and Mechanics' Bank, of Kent Co., v. Butchers and Drovers' Bank. plaintiff's bank. The application was entered on the books of the plaintiff on the 19th of February, 1852, and was made in pursuance of an agreement previously made, to which Green was a party and assented. There was some evidence that the plaintiff had previously held checks drawn by Green on the defendant's bank and certified by Peck, the teller, in the same form as those in suit, which had been presented and paid by the defendant. The checks were deposited by the plaintiff with a bank in Baltimore, as collateral security for redemptions to be made by it of circulating notes issued by the plaintiff, and were not presented to the defendant until February, 1853, at or about the time of the failure of Green, the drawer. The judge presiding at the trial charged the jury, under exception by the defendant, that there was no doubt of the authority of Peck, the teller, to certify checks in the manner in which the checks in question are certified, so as to bind the defendant to pay them to those who took them bona fide, in the usual course of business, and for value; that if they should find that the plaintiff had previously held similar checks, certified by Peck in the same manner that these are, and that they had been uniformly paid by the defendant on presentment, without objection, then the plaintiff was entitled to recover, if the jury should also find that the plaintiff took them in good faith and for value, without notice of the agreement between Green and the teller, or that Peck, in certifying them, had done so without authority, or in violation of his duty to the defendant; that if the plaintiff received the checks in actual payment and satisfaction of installments then due to it on subscriptions for stock, made by Green and others, that would constitute the plaintiff a holder for value. But if the plaintiff took the checks merely as collateral security for the payment of such installments, and not in actual payment and satisfaction, the plaintiff is not entitled to that character. The jury found a verdict for the plaintiff for the amount of the checks, with Farmers and Mechanics' Bank, of Kent Co., v. Butchers and Drovers' Bank. interest from the time payment was demanded. Judgment vas entered upon this verdict at special term, which, on appeal, was affirmed by the Superior Court at general term, and the defendant appealed to this court. John H. Reynolds, for the appellant. Henry A. Cram, for the respondent. SELDEN, J. The jury in this case have found, upon sufficient evidence and under proper instructions from the court, that the plaintiffs were holders, for value, of the checks in question. Each of these checks, if duly certified imposes upon the bank an obligation to retain the amount for which the check is drawn, and which, by the certificate, it admits it has in hand to the credit of the drawer to meet the check when presented, and to pay the same to the holde on demand. This obligation is substantially the same as that assumed by the acceptor of an ordinary bill of exchange; and the certificates in this case, if authorized, may with propriety be regarded as virtual acceptances of bills, and the bank as liable, if at all, as acceptor. The first ground upon which this liability is resisted is based, not upon any want of authority in the particular agent by whom the checks were certified, but upon a want of power in the bank to bind itself by the contract sought to be enforced. It is insisted that the bank was not authorized by its charter to engage in transactions purely fictitious, having no connection with its legitimate business, or to pledge its credit for the mere accommodation of third persons. The defendant is a banking corporation, organized under the general banking law of this state; and it is, I think, & sound position, that such a corporation exceeds its powers when it becomes the mere surety for another, upon a contract in which it has no interest, or lends its credit in any Farmers and Mechanics' Bank, of Kent Co., v. Butchers and Drovers' Bank. form for the exclusive benefit of other parties. Such a contract is ultra vires, and cannot be enforced against the bank by any person cognizant of the facts. But it by no means follows, when the unauthorized contract is in the form of a negotiable instrument, that the bank can avail itself of the defence, as against one who, without notice, has become the holder of the paper for value. This question appears to have arisen in the case of Stoney v. The American Life Insurance Company (11 Paige, 635), and the decision of the court upon the point is thus stated by the reporter: "A negotiable security of a corporation, which upon its face appears to have been duly issued by such corporation, and in conformity with the provisions of its charter, is valid in the hands of a bona fide holder thereof, without notice, although such security was in fact issued for a purpose and at a place not authorized by the charter of the corporation, and in violation of the laws of the state where it was actually issued." There is a dictum of the chancellor, to the same effect, in the case of Safford v. Wyckoff (4 Hill, 442), where the defence set up was, that the act of the bank, in issuing the bill upor. which the action was brought, was ultra vires. The chancellor there says: "A bill, or any other negotiable security, which is not upon its face illegal and unauthorized, is valid n the hands of a bona fide holder, without notice, who has paid a valuable consideration therefor, except in those cases in which the security is made void by statute." So in the case of The Genesee Bank v. The Patchin Bank (3 Kern., 309), recently decided by this court, a similar doctrine is distinctly asserted by DENIO, J., although the point was not passed upon by the court. I have no hesitation in concurring with these learned judges in the principles thus asserted, and am not aware that a contrary opinion has ever been judicially expressed. A citizen who deals directly with a corporation, or who takes its negotiable paper, is presumed to know the extent of its |