property therein and authorizes the payment thereof. (Benjamin's Chalmers, Article 80.)

Sec. 781. CORPORATIONS AS PARTIES TO COMMERCIAL PAPER.-Corporations are either private or public. The distinction being, that in the former a few individuals own and control the franchises and property of the corporation, while in the latter the interests and franchises belong to the general public, or people composing the district which the corporation covers. The former is managed for private gain, the latter for public service and advantage. It is said that private corporations are organized to prosecute private interest or business as distinguished from governmental or public undertakings.

A corporation derives its authority from its charter; it can incur no liability by drawing, indorsing or accepting a bill, unless expressly or impliedly empowered by its act of incorporation so to do, and in general the capacity of a corporation to bind itself by a bill, is co-extensive with its capacity to contract. (Benj.'s Chalm., Art. 67; Curtis v. Smith, 15 N. Y. 66.) Thus a corporation chartered to build a railroad, may bind itself by note for materials used in constructing the road, but could not accept accommodation paper to aid another company in constructing its road. (Smead v. R. R. Co., 11 Ind. 104.) A bill given to the order of the corporation transfers the property therein, though from want of capacity the corporation may not be liable thereon as an indorser. (Brown v. Donnell, 49 Me.

Sec. 782. SAME SUBJECT-BONA FIDE HOLDERS.-As against original parties to commercial paper of a corporation which has been issued ultra vires, that is, without authority, the corporation may plead its lack of authority, but in the hands of bona fide indorsees for value, the common rule of negotiable paper prevents the corporation from setting up this defence. (Tiedeman, Com. Pap., Sec. 116.) In the case of accommodation paper this rule does not apply, and the paper is considered void. And where the corporation has expressly declared that paper issued ultra vires shall be void, a bona fide holder gets no title.

It is the rule of law that commercial paper should not be issued under seal. At common law a corporation could not make a binding contract without using its corporate seal. It was formerly held that the seal destroyed the negotiability of the instrument, but the rule is now relaxed, and the commercial paper of a corporation under seal is negotiable, and further, that in making commercial paper a corporation may dispense with the use of its corporate seal. (Barrett v. Schuyler Co. Court, 44 Mo. 197; Clark v. Iowa City, 20 Wall. 583; Beaver Co. v. Armstrong, 44 Pa. St. 63.)

A corporation has the implied power to take a note or bill for any debt due it. (Buckley v. Briggs, 30 Mo. 452.) But in order to make a regular business of lending money and taking paper of the borrower the power must be given in its charter. (Grand Lodge of Free Masons v. Waddill, 36 Ala. 313.)

e

Sec. 783. SAME SUBJECT-A CORPORATION ACTS BY ITS AGENTS, THEIR POWERS.-The power to appoint agents is necessarily implied as the corporation can only act through its agents and officers. The power is general and unlimited unless expressly denied. But an agent appointed by a corporation must have express authority to issue notes, unless his position is such as by general custom and usage would authorize him to bind the corporation. (Odd Fellows v. First Natl. Bank, 42 Mich. 463.)

A cashier of a bank has implied power to bind his bank by putting his official signature to commercial paper. He may transfer the negotiable paper of the bank; give the bank's note for borrowed money; accept bills and certify checks drawn on the bank; sell notes and bills of the bank; and draw bills and checks on the bank's deposits.*

The president of a corporation also, as its chief executive officer, has implied power to represent the corporation in various ways. He may bring suits in the name of the corporation (Alexandria Canal Co. v. Swann, 5 How. 88), and in case of a banking corporation he may receipt for deposits and do other acts in the ordinary course of business by following the customary rules of the institution. (Sterling v. Marietta Co., 11 Serg. & R. 170; Foster v. Essex Bank, 17 Mass. 479.) Neither the cashier nor president of a bank has implied authority to release any claim due the bank; this power must be exercised by the board of directors. (Bank of *Tiedeman, Com. Paper, Sec. 120; Morse on Banking, 164.

U. S. v. Dunn, 6 Pet. 51; Olney v. Chadsey, 7 R. I.

225.)

Other officers of corporations, as secretary, treasurer, etc., may be expressly authorized to issue commercial paper for the corporation or they may have such power from implication by reason of having exercised it previously. (Tiedeman, Com. Pap., Sec. 122.) The proper signature of a corporation by an agent is the name of the corporation followed by the name of the agent making the signature with his official designation. But this is not the only form of a corporate signature which will bind the corporation. Where the name of the corporation appears in the instrument as the party to be bound, and is signed by an authorized agent of the corporation with his name and official title, it is held a good corporate obligation.*

So, later decisions hold, that when it appears from the signature of the agent that he is acting in a representative capacity for the corporation, as where he uses the words "on account of," "for the use of," and the like, in connection with the name of the corporation, it will be considered a corporate obligation. (Lindud v. Melrose, 3 H. & N. 177; Dow v. Moore, 47 N. H. 419.)

As the drawee named in the bill is the only one who can accept it, except for honor supra protest, unless the bill is drawn upon a corporation it cannot be accepted

*Commercial Bank v. Newport Mfg. Co., 1 B. Monr. 13; Township v. Citizens' Bank, 81 Ind. 515; Tiedeman, Com. Paper, Sec. 123.

even by an authorized agent for the corporation. The principles already stated govern in determining whether the bill is drawn on a corporation or an individual. (Walker v. Bank, 9 N. Y. 582.) In making acceptances or indorsements the designation of the drawee and payee indicate the correct form of signature. If the bill is payable to an individual in his personal capacity, he cannot make the corporation an indorser by affixing its name, if liable at all on such a signature it would be as a guarantor. But if the bill or note is properly payable to the corporation, an indorsement by an authorized officer using his own signature and official designation will bind the corporation. (Tiedeman, Com. Pap., Sec. 126.)

Sec. 784. PUBLIC OR MUNICIPAL CORPORATIONS AS PARTIES TO COMMERCIAL PAPER.-The State or Federal governments as corporations may, by their duly authorized agents, become parties to the different species of commercial paper, either as drawer, maker or acceptor. (United States v. Bank, 15 Pet. 377; State ex rel. Plock v. Cobb. 64 Ala. 156.) But as the ordinary exercise of their powers does not require the use of this power, the courts do not recognize any officer or agent of the government as possessing implied power to bind the government by making or accepting commercial paper. The authority to make or accept commercial paper in order to bind the government must be expressly granted to the officer by the legislative department of the government or necessary to carry out some express power.*

*Floyd, Acceptances, 7 Wall. 667. In this case it was held