Case ID: ny_52/html/0096-01.html
Source: Caselaw Access Project
Author: {"author": "Chuboh, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Pitt Cooke, Respondent, v. The State National Bank of Boston, impleaded, etc., Appellant.
    An intent to take away jurisdiction from the State courts will not be deduced from doubtful or ambiguous language in an act of congress.
    The provision of the national currency act, so called (§ 57, 13 Stat. at Large, 99), which declares “ that suits, actions or proceedings against any associations under the act may he had ” in the Federal courts held in the districts or in any State, county or municipal court in the city or county where the association is located, is permissive not mandatory.'
    It is not competent for congress to deprive the State courts of jurisdiction in all actions against banking associations organized under said act, or to restrict jurisdiction to particular courts.
    The possibility that, in an action against such an association, a question may arise of federal cognizance, does not make the case one arising under the Constitution and laws of the United States, within the meaning of the provision of said Constitution (§ 2, art. 3) which declares that the judicial power shall extend to all cases thus arising. Osburn v. The Bank of the United States, (9 Wheat., 738), distinguished and limited.
    An association organized under said act is a citizen of the State where, by law, it is located, within the meaning of the Constitution.
    The authorities upon the subject of the citizenship of corporations, collated and discussed.
    Where a suit is brought in a State court by a citizen of the State against several defendants residing in another State, it is not competent for one of said defendants to apply for the removal of the cause to the federal court under the provision of the act of congress of March 2, 1847 (14 Stat. at Large, 558), unless the other defendants are improper, formal or unnecessary parties; but all must unite in the application.
    Where, however, by virtue of a State statute, two causes of action against different parties are united, which, but for the statute, it would be improper to unite in one suit, and where the defences are distinct and independent of each other and separate judgments can be entered, one of the parties’ defendant cannot be deprived of his right of removal because of this union.
    (Argued November 26, 1872;
    decided January 28, 1873.)
    It seems that, in such case, by the removal the action would be severed, one going to the Federal, the other remaining in the State court.
    The act of 1847 requires the affidavit of the party seeking to remove a¿, cause. A corporation, therefore, by reason of its incapacity to make the affidavit, cannot avail itself of the act. The necessary affidavit cannot be made by its officer.
    The import of the certification of a check by a bank is a statement that the bank holds sufficient funds of the drawer applicable to its payment, and an agreement that it will retain those funds and pay the check when presented.
    The cashier of a bank has authority to certify a check when the drawer has funds. Without funds, as between him and the bank, he has no such power; but, as between the bank and a bona fide holder of a check so certified, as the certification is apparently within the scope of the authority of its cashier, the bank cannot dispute the fact that there are funds.
    A bona fide holder only can enforce the liability against the bank, in the absence of funds.
    Notice of the refusal of a bank tó unite with other banks in the adoption of a custom to receive from each other certified checks in payment for balances and collections, does not operate as notice of want of authority, on the part of the cashier, to certify checks or prevent the holder from claiming as a bona fide holder.
    Such a custom is for a special purpose, and for that purpose contemplates an unqualified contract, on the part of the consenting banks, to be bound by certifications without regard to the presence of funds; and the refusal of a bank to enter into the arrangement does not affect the power of its cashier to certify checks in the ordinary manner.
    The liability of banks upon certified checks legally results from the nature of the agreement, and the application of well settled rules of law; it does not depend upon usage or custom.
    Appeal from judgment of the General Term of the Supreme Court in the first judicial department, affirming a judgment in favor of plaintiff entered on a verdict. (Reported below, 50 Barb., 339; 1 Bans,, 494.)
    This action was brought upon a check drawn by the defendants, Mellen, Ward & Carter, under their firm name of Mellen, Ward & Co., upon the defendant, the State National Bank, and certified by the cashier oí said bank.
    
      The plaintiff was, at the time of the commencement of the action, a citizen and resident of the State of New York, and was then a member of the firm of Jay Cooke & Co., of the city of New York, and had been such member for a year before the commencement of the action and was a member of that firm at the time of the trial.
    The defendant, the State National Bank of Boston, is a duly organized national bank, under the national bank act of June 3,1864; and from the time of its organization (April, 1865) the said bank has carried on the business of banking in the city of Boston, and State of Massachusetts, and not elsewhere.
    The defendants, Mellen, Ward & Carter, were, at the time of the transaction in controversy, money brokers in Boston, doing business under the firm name of Mellen, Ward & Co. They did not appear in the action.
    The check upon which the action was brought was drawn by Mellen, Ward & Co. upon the defendant, the State National Bank, dated Boston, February 28, 1867, payable to Gold, or bearer, for $125,000. Across the face of the check was written “ good, O. H. Smith, Cash.”
    At the date of the check C. H. Smith was the cashier of the State National Bank.
    This check was indorsed as follows:
    “Bay Jay Cooke & Co., or order.
    “ANDW. J. LOUD, Cas.
    
    “ Pay to the order of Pitt Cooke without recourse to Jay Cooke & Co.”
    Andrew J. Loud was at that time the cashier of the Second National Bank in Boston.
    The check, with this superscription across the face of it, was delivered by one of the firm of Ward, Mellen & Co. to the Second National Bank, together with $15,050 in bills, on the day of its date, in payment of a draft by Jay Cooke & Co. on said Mellen, Ward & Co. for $140,050, dated February 27, 1867, drawn against a remittance of $100,000 in gold certificates, which were sent at the same time to the Second National Bank, to be delivered tó Mellen, Ward & Co. on their payment of the draft. On receiving the check and bills the bank delivered the gold certificates to Mellen, Ward & Co.
    The check was received by the Second National Bank, near the close of business hours.
    On the suggestion of one of the firm of Mellen, Ward & Co., on the first of March (who gave the bank to understand they would take up the check in New York funds), it was kept back and not sent to the clearing house on that day.
    Mellen, Ward & Co. were not depositors in the State National Bank at the time this check was drawn and certified, and had no funds in the bank at the time.
    The next day (March 2) the check was presented for payment through the clearing house, and payment was refused to be received.
    On the 21st of November, 1866, about three months prior to the receipt of the check by the Second National Bank, a meeting of the banks in Boston was held at the clearing house to consider the subject of receiving certified checks, instead of bills, in payment. Both the Second National and the State National were represented at this meeting.
    At this meeting a resolution was adopted, in substance, that the' associated banks approved adopting a custom of receiving certified checks. “Provided, that the directors of each bank so certifying shall first have passed a vote agreeing that their respective banks shall be bound by such act of certification.”
    Of the banks present all except three voted in favor of the resolution. The State National Bank was one of the three voting in the negative. The Second National Bank voted in the affirmative.
    The action of the president of the bank in voting in the negative was reported to the board of directors at its first meeting afterward, and was approved by the directors.
    On the 5th of December, 1866, a circular was sent by the manager of the clearing house to all the banks in Boston, .members of the Clearing House Association, and, among the others, to the Second National Bank, containing the names_ of the banks which-had voted to authorize their officers to certify checks under the resolution, and notifying the banks who intended, to enter into the arrangement to inform the manager of the clearing house, “in order that the banks may receive an early notice of the same.”
    The State National Bank did not enter into the arrangement.
    In December, 1868, after this suit was at issue, the defendant, the State National Bank, applied at the Special Term of the court, under the act of congress of. March 2, 1867, upon an affidavit of seven of the directors of the bank, for the removal of the cause into the Circuit Court of the United States for the southern district of New York, offering the security provided for by the act, which was approved by the court. On the thirtieth of that month an order was made by Judge Cabbozo, transferring the cause to said Circuit Court, and directing this court to proceed no further in the action, as against the said bank. This removal was set up by supplemental answer, in bar of the farther jurisdiction of the court. The order of Judge Cabbozo was appealed from by the plaintiff to. the General Term, and was there heard under a jprotest on the part of the bank, that the court had no jurisdiction to hear the matter. The General Term reversed the order. A reargument, on the application of said bank, was ordered, and had before the General Term, under the like protest of want of jurisdiction in the court to hear the matter, and the General. Term, on the 19th of February, 1870, reaffirmed their former decision, reversing the order. This decision was placed on the ground that Mellen, Ward and Carter, the other defendants in the action, were not parties to the application.
    The evidence offered in the trial as to the reargument was objected to by the counsel for the bank, on the ground that the proceedings offered to be shown were wholly coram non 
      
      judice, and immaterial and irrelevant for any purpose. The objection was overruled and exception taken.
    On the trial, a protest, on the part of the bank, was made before the ease had been opened by the plaintiff’s counsel, that the' court'had no jurisdiction to hear or try the action, on the ground that the action had, under the proceedings aforesaid, been removed to and was then pending in the federal court, and a motion was made to dismiss the complaint for want of jurisdiction on that ground, which was denied and exception taken.
    The counsel for the bank at the same time protested that the court had no jurisdiction to hear and try the action, on the ground that, under the act of congress of June 3, 1864, under which the bank had been created a national bank, it could only be sued in a circuit or district court of th¿ United States, held within the State of Massachusetts, or in a State, county or municipal court in the county of Suffolk or city of Boston, in which the bank was located, having jurisdiction in similar cases, and moved to dismiss the complaint for want of jurisdiction on that ground; which motion was also denied , and exception taken.
    These motions on both grounds were renewed after the parties had rested, and the like ruling was had and exception taken.
    The defendant’s counsel also moved to dismiss the complaint, on the ground that there was not sufficient evidence to entitle' the plaintiff to go to the jury, and also moved the court' to direct a verdict for defendant; both which motions were denied and exceptions taken.
    The court directed the jury to find a verdict for the plaintiff for the amount óf the check in suit, $125,000, with interest from February 28,1870; to which direction and decision the defendant’s counsel duly excepted. The jury thereupon, under such direction of the court, found a verdict for the plaintiff for $152,999.88.
    Other facts appear in the opinion.
    
      
      F. W. Stoughton, for the appellants.
    When an order is properly made removing a cause into the Federal courts, the State court has no jurisdiction. (Act United States, March 2,1867, 14 Stats, at Large, 558; Kanouse v. Martin, 15 How. [U. S.], 198; Gordon v. Longest, 16 Peters, 97; Livermore v. Jenks, 11 How., Pr. R., 479 ; Vandervoort v. Palmer and others, 4 Duer, 677; Fisk v. Union Pacific Railroad Company [Judge Nelson and Blatchford] ; Ilius v. New Hampshire Railroad Company, 3 Kern., 597; Fargo v. Mc Vicker, Court Appeals; Stephens & Dwight v. Phoenix Insurance Company, Hartford, 41 N. Y., 149; see 3 Blatch., 111; Disbrow v. Driggs, 8 Abb. Pr. R., 306; Jones v. Seward, 26 How. Pr. R., 436.) While the bank was a State bank Massachusetts was its habitat, and from that a conclusive presumption would arise that its officers and managers were citizens of that State. (Rundle v. Delaware and Raritan Canal Company, 14 How. [U. S.], 80; Marshall v. Baltimore and Ohio Railroad Company, 16 id., 14; Louisville Railroad Company v. Letson, 2 id., 497; Covington Draw-bridge Company v. Shepherd, 20 id., 233; Ohio and Mississippi Railroad Company v. Wheeler, 1 Black [U. S.], 286.) In respect to a national bank the rule is the same. (Manf. Nat. Bank, Chicago v. Baache, 40 How. Pr., 409; 8 Blatch., 137.) The union of parties, without interest, with the real parties to a litigation, cannot oust the Federal courts of jurisdiction if the character of the real parties is such as to confer it. (Wood s. Davis, 18 How. [U. S.], 467; Wormley s. Wormley, 8 Wheat., 451; Louisville R. R. v. Letson, 2 How. [U. S.], 497; Barrowe s. Strode, 5 Cr., 303; Livingston v. Gibbons, 4 J. Ch., 94; Ward v. Arredondo, 1 Paine C. C. R., 410; Norton v. Hayes, 4 Den., 245; Vandervoort v. Palmer, 4 Duer, 677.) The earlier of two acts remains in force unless expressly repealed, or the two are plainly inconsistent. (14 Stat. at Large,.306,558; 3 Kern, 299; 9 Barb., 304; 9 Cow., 506; Bac. Ab., tit. Stat, 2.) Under the national currency act of June 3, 1864, a national bank can only be sued in a circuit or district court of the United States, or in a State, county or municipal court of the State in which the bank is located having jurisdiction in similar cases. (13 Stat. at Large, 99 ; 12 id., 665, § 59; Bank U. S. v. Devreux, 5 Cr., 85, 86; Osborne v. Bank U. S., 9 Wheat., 738; Crisp v. Beenbury, 8 Bing., 394; Minor v. Mech. Bank, Alexend., 1 Peters, 46-64; Crocker v. Marine Nat. Bank [N. Y.]; Baker, Jr., v. Same, 101 Hass., 240.) The certification by the cashier was void. (F. and M. Bank Case, 16 N. Y., 125 ; N. H. R. R. Case, 34 id., 30; Bank of U. S. v. Dunn, 6 Peters, 51; Fletcher v. U. S. Bank, 8 Wheat., 338; United States v. City Bank of Columbus, 21 How., 356; Mussey v. Eagle Bank, 9 Metc.; Fulton Bank v. N. Y. and S. L. Co., 4 Paige, 127; Kirk v. Bell, 12 Eng. L. and Eq., 385; Ang. and Ames Corp., §§ 299, 300, 301; Story on Ag., §§ 114,115; 13 Stat. at Large, 99.) The rule laid down in New York and New Hamen R. R. v Schuyler (34 N. Y., 68), if it be now the law of Hew York, is not the law of Massachusetts. (Mussey v. Beecher, 3 Cush., 511; Lowell Bank v. Winchester, 8 Allen, 109; Benoit v, Conway, 10 Allen, 528.) Hor is it the law of England. (Grant v. Norway, 10 C. B., 665; Hubardsty v. Ward, 8 Exch., 330; Alexander v. McKenzie, 6 C. B., 766; Stagg y. Elliott, 12 C. B. [N. S.], 373; Baines v. Ewing Law Rep., 1 Exch., 320.) Hor is it the law of the national courts. (Freeman v. Buckingham, 18 How., 182.) The cheek was certified to be used as currency, the certificate was void, being without power under the organic law and as creating a currancy prohibited by that law. (12 Stat. at Large, ch. 106, §§ 8, 22, 23, 24, 45; Davidson v. Lanier, 4 Wall., 447; Bank U. S. v. Owens, 2 Pet., 527; Root v. Godard, 3 McL., 102, 103; Hayden v. Davis, id., 276; Safford v. Wyckoff, 1 Hill, 11; Smith v. Strong, 2 id., 24; Bank Orleans v. Merritt, id., 295; Leavitt v. Palmer, 3 Comst., 19; Veasie Bank v. Fenns, 8 Wall., 533.) Hotice to the Second Hational Bank of a want of authority to certify, on the part of the cashier of the defendants, is, in law, notice to Jay Cooke & Co. and to the plaintiff. (Story’s Eq., § 408, and note; 
      Toulmin v. Steerer, 3 Merivale, 222; Hargreaves v. Rothwell, 1 Keen, 154; Nixon v. Hamilton, 2 Drury & Warren, 391 ; Fuller v. Bennett, 2 Hare, 394; Gerard v. O'Reilly, 3 Drury & Warren, 414; Majoribanks v. Hovenden, Drury, 11; Story on Ag., § 139; Lowther v. Carlton, 2 Atk., 242; 1 Liv. on Ag., ch. 10, § 3; Fulton Bank v. N. Y. Canal Co., 4 Paige, 137.)
    
      John E. Burrill for the respondent.
    The jurisdiction of the State court cannot be taken from it by implication. (Teall v. Felton, 1 N. Y., 537; Delafield v. State of Illinois, 2 Hill, 164; S. C., 26 Wend., 192.) The mere grant of jurisdiction to a particular court, without words of exclusion as to other courts, will not divest the latter of their ordinary jurisdiction. (Delafield v. State of Illinois, 2 Hill, 160 ; 1 Kent Com., 397, 399, marg. paging and notes.) The proceedings taken to remove the cause to the Hnited States courts were invalid and unauthorized, and did not deprive this court of jurisdiction. (Hope Co. v. Boardman, 5 Cranch, 57; Bank of U. S. v. Deveau, id., 61; Can. Bank v. Clocomb, 14 Peters, 60; O. and M. Co. v. Wheeler, 1 Black., 286.) The bank not being a citizen of Massachusetts, was not made so by the provisions of 13 U. S. Stat., 99. (Broadway Bank v. Hoffman, 37 N. Y., 10; Bank of Commerce v. New York, 2 Black, 630; Bank Tax Case, 2 Wal., 206; Van Allen v. Comrs., 3 id., 316; McCulloch v. Maryland, 4 Wheat., 316; Osborne v. Bank of U. S., 9 id., 738.) A national bank organized under the act of June 3, 1864, and having its habitat in this State, is a foreign corporation. (Bowen v. Nat. Bank of Medina, 34 How. Pr., 408; Cooke v. State Nat. Bank, 50 Barb., 339.) The application to remove should have been made by all the defendants in this action. (Ward v. Arredondo, 1 Paine C. C. R., 410; Hubbard v. North. R. R., 3 Blatch., 84; Fisk v. Chic, and R. I., 3 Abb. Pr. [N. S.], 461, 465, 466.) The cashier had a right to bind the bank by the certification of a check of a drawer who has no funds in the bank. (Farmers' Bank v. Butch, and D. Bank, 4 Duer, 219; S. C., 14 N. Y., 623; 16 id., 125; Meads v. Merchants’ Bank, 25 id., 143 ; Barnes v. Ont. Bank, 19 id., 152, 489 ; Clarke Bank v. Bank of Albion, 52 Barb., 596; Irving Bank v. Witherald, 34 N. Y., 336; Merchants’ Bank v. State Bank, 10 Wal., 604; id., 647; Potter Rec’r v. Merchants' Bank of Albany, 28 N. Y., 641; City Bank of New Haven v. Perkins, 29 id., 514; Bank of N. Y. v. Bank of Ohio, 29 id., 632; Robb v. Ross County Bank, 41 Barb., 596; 16 N. Y., 130, 131; 5 id., 335.) Notice to an agent to bind his principal must be given in the particular business in which the agent is employed. (The President v. Cornen, 37 N. Y., 322; Bank of U. S. v. Davis, 2 Hill, 463; Nat. Bank v. Norton, 1 id., 572; Miller v. Ill. R. R. Co., 24 Barb., 312, 321; N. Y. C. Co. v. Nat. Pro. Co., 20 id., 469-476.)
   Chuboh, Ch. J.

The jurisdiction of the State court is denied upon two grounds: 1. That the national currency act of congress prohibited original jurisdiction, and 2. That the cause has been removed from the State to the federal courts.

The alleged prohibitory statute is the fifty-seventh section of the aforesaid act. 13 Stat. at Large, p. 99, and provides: “ That suits, actions and proceedings against any association under this act may be had in any circuit, district or territorial courts held within the district in which such association may be established, or in any State, county or municipal court in the county or city in which said association is located, having jurisdiction in similar cases. Provided, however, that all the proceedings to enjoin the comptroller under this act shall be had in the circuit, district or territorial court of the United States held in the district in which the association is located.”

I think the proper construction of this section is to regard the power conferred, of bringing actions against the associations in specified courts, as permissive and not mandatory. The framework of the section implies that intention. The words “may” and “ shall” are" both used; the former to confer a privilege, the latter as a mandate. It is presumed that the attention of congress was drawn to the distinction between the ordinary import of the two words, and that they were used with reference to that distinction, and hence that, if it had been designed to limit prosecutions to the specified courts, the same word would have been employed as in limiting a particular proceeding to a specified court.

There are no words of exclusion in the act, and it is a general rule as to jurisdiction, that to confer it upon one court, does not operate to oust other courts before possessing it, for the reason that concurrent jurisdiction is not inconsistent. (2 Hill, 164.) This rule would be specially applicable to the fifty-ninth section of the act of 1863, of which the section in question is an amendment. By that section, suits by and against these associations were authorized to be brought in the circuit and district courts of the United States, without mentioning State courts; and no one, I think, ever supposed that the privilege conferred by that section precluded actions in State courts. There is some force in the argument that the specification of State courts in the act was unnecessary and useless, unless the clause was intended as restrictive; but this is far from conclusive. Words are often used in a statute for. the purpose of producing or preventing a particular inference from other words, and sometimes without necessity or pertinency. After authorizing suits in local Federal courts, a similar power in local State courts may have been deemed proper to prevent an inference that jurisdiction was intended to be restricted to the former. At all events, I am unwilling to hold that the jurisdiction of the State courts was intended to be taken away upon doubtful or ambiguous language. Such a construction would enable these associations to delay and defraud their creditors, and produce inconvenience and expense to suitors, involving an amount of injustice which we cannot attribute to the intention of the law-making power; I lay no stress upon the eighth section, because the authority to sue and be sued conferred by that section confers a eorporate.attribute and does not relate to jurisdiction.

But if this construction of the act is erroneous, I do not think it competent for congress to deprive the State courts of jurisdiction in all actions against these banking associations. It is proper to observe in the first place that there are no words of exclusion in the Constitution itself. The second section of the third article declares that the judicial power shall extend to all cases arising under this Constitution, the laws of the United States, and treaties made,” etc.,. and it may well be doubted whether as to such jurisdiction as the State courts before possessed, not relating to subjects growing out of the organization of the government or the specific powers conferred upon it, it was intended to confer by this clause any other than concurrent- power. (Federalist, No. 82; 2 Hill, supra.) However this may be, it is clear that the exercise of the power must be confined to the cases to which the judicial power extends, viz., to cases arising under the Constitution, laws' or treaties of the United States,- and unless it can be established that every possible action is a case arising under the Constitution or laws of the Union, a general prohibition against actions in State courts would be invalid and a restriction to particular courts, equally so. The case of Osborn v. The Bank of the United States (9 Wheat., 738) is relied upon as authority for the exercise of this power. That was an action in equity, brought by the bank to restrain the officers of the State of Ohio from collecting a penalty imposed by way of a tax in gross, for its continuing to transact business within the State after a certain period. Upon the theory upon which the bank was created as one of the agencies of the government, that was clearly a case to which the judicial power of the Union extended, and it was competent to authorize such an action to be brought in the United States Circuit Court, and the question of jurisdiction might have been disposed of by restricting the act to such cases.

The opinion of Ch. J. Marshall goes to the length, however, of holding that every action which the bank might bring was a case arising under the Constitution and laws of the Union, and this was placed mainly upon the ground that the right to sue depended upon its corporate existence, created by federal power, and that the possibility that this right might be questioned in any suit constituted a Case arising under the Constitution and laws of the United States, without regard to the fact whether any such question was raised or not. ■-

As an original question, I should doubt the "soundness of this view, and prefer to adopt the views expressed in the dissenting opinion of Johnson, J. But the decision is not decisive of the question as presented in this case. ' It would be an unwarrantable extension of the principle of that case to apply it to every action against a corporation created by congress. Whether a corporation was created by one power or another, is manifestly immaterial in many actions which may be brought against it. The commencement of a suit admits the capacity of the corporation to be sued, and the very first step of the plaintiff may show .that no question can arise of federal cognizance. Take, for example, an action to recover money, the complaint alleging that the plaintiff deposited $100 with the bank defendant, which on demand it refused to pay, and issue is joined by a denial that the plaintiff ever deposited the-money. Can it be said that this is a case arising under the Constitution and laws of the United States ? To regard it as such involves the perversion of legal language.- Nor can any reason be assigned why a strained or artificial construction should be adopted for the purpose of depriving State tribunals of their legitimate functions. Under the appellate jurisdiction of the Supreme Court' of the United States, which is referable to the same general power as the original jurisdiction, it is well settled that it is not sufficient to show that a question might have arisen unless it is shown that it did in fact arise in the case. (10 Peters, 368; 12 Wheat., 117.) I insist that the possibility of a question does not make a case arising under federal law, but if it did, in the case supposed and in most others likely to be brought, it is difficult to see how any such question could be raised.

The existence of the corporation is conceded by suing it as such, and the issue made is confined to the fact of receiving the money. This view can work no injustice to these associations nor deprive them of any right to be heard in the United States court if the case is one to which the jurisdiction extends, as the right of removal, both on account of the nature of the case and the condition of citizenship, is secured by various statutes.

The United States Bank was chartered as a fiscal agent of the government, while these associations were created under a supposed power to furnish a national paper currency; but the distinction, so far as it has any bearing upon the present question, is in favor of the jurisdiction of the State courts, and against the power of restriction. Upon all questions respecting State and federal powers, the utmost fairness and forbearance should be exercised in drawing the line between them. There is no antagonism in theory between the two governments, and if each would refrain from the exercise of doubtful powers, no collision would ever occur. While, as we hold, congress did not intend to oust the State courts of jurisdiction by this act, we are confident that no such power has been conferred by the Constitution. If the federal legislature may create corporations for the transaction of the banking business of the country, and confine all legal proceedings by and against them to federal courts, it requires only another step in the same direction to create corporations for the transaction of railroad, telegraph, express and manufacturing business, and thus to usurp control over the whole business of the country and the internal affairs of the States, absorbing the judicial functions of State courts and reducing the States themselves to mere governmental skeletons without power or vitality, a result which no friend of the Constitution or of republican institutions can desire."

The second objection to the jurisdiction of the court is that the cause was lawfully removed from the State to the Federal court. The removal is claimed to have been effected under the act of March 2d, 1867. Mo order of the State court is necessary, but the removal is effected by a compliance with the statute. The only discretion which the State court can exercise is in respect to the sufficiency of the surety. (5 Blatch., 336; 6 id., 362.)

The counsel for the plaintiff urges three objections to the validity of the removal: 1. That the bank defendant, being an association organized under the national currency act, is not a citizen of Massachusetts within the meaning of the Constitution. '

The Federal courts at an early day felt some embarrassment in holding that corporations were entitled to the rights of citizens in suing and being sued, resulting from an opinion then entertained, that corporations could not be regarded as citizens within the meaning of the United States Constitution. The difficulty was at first overcome by holding that the court would look behind the artificial being, to the corporators, and if all of them resided in a different State from the one in which the suit was brought, and where the other party resided, it should be deemed a suit between the corporators and the other party. (3 Cranch, 267; 5 id., 84.) These decisions necessarily involved the fact that all the corporators must reside in one State. (14 Peters, 60.)

But in the case of the L. C. and C. R. R. Co. v. Letson (2 How. U. S. R., 497) this doctrine was modified; and it was decided that a citizen of one State could sue a corporation created by and transacting its business in another State, although some of the members of the corporation' were not citizens of that State.

It was stated by Chief Justice Taney (1 Black, 296) that the decision in the Letson case was based upon the legal presumption that all the members of a corporation are citizens of the State in which alone the corporate body has a legal existence, and that no averment or evidence to the contrary is admissible; and, hence, that a suit by or against a corporation is a suit by or against citizens of the State which created the corporate body. The same thing had been stated by the same learned judge in 20 How., 232; and is reiterated by Blatchford, J., in M. N. Bank of Chicago v. Baack (reported in 40 How. Pr. R., 409). Catron, J., in Rundle v. D. and R. C. Co. (14 How. U. S. R., 95), states that the Letson case decided that if the president and directors are citizens of the State where the corporation was created, and the other party is a citizen of another State, the Federal courts have jurisdiction; while, in Cowles v. Mercer County (7 Wal., 121), the present chief justice states that the decision in the Letson case is “ that a corporation created by the laws of a State, and having its place of business within that State, must, for the purposes of suit, be r'egarded as a citizen, within the meaning of the Constitution, giving jurisdiction founded upon citizenship;” and he adds: In the case before us the corporators are all citizens of Hlinois, and the corporation is liable to suit within the narrowest construction of the Constitution.”

With these conflicting views as to the decision in Letson’s case, the only safe guide is the opinion pronounced; and, with all due respect, it seems to me that it was intended to decide that corporations are citizens of the States which create them, irrespective of the residence of the corporators; and that the presumption of such residence formerly indulged, and whether regarded as one of fact or law, was intended to be ignored and disregarded. Wayne, J., in delivering the opinion, declared that the court intended to decide “ that a corporation, created by and doing business in a particular State, is to be deemed to all intents and purposes as a person, although an artificial person, an inhabitant of the same State, for the purposes of its incorporation, capable of being treated as a citizen of that State as much as a natural person;” and, in closing his opinion, adds: “We confess our inability to reconcile these qualities of a corporation—residence, habitancy and individuality—with the doctrine that a corporation aggregate cannot be a citizen for the purposes of a suit in the courts of the United States, unless in consequence of a residence of all its corporators, being of the State in which the suit is brought. When a corporation exercises its powers in the State which chartered it, that is its residence; and such an averment is sufficient to give the circuit courts jurisdiction.”

As an original question, it seems clear that the residence and citizenship of a corporation should be determined without regard to the residence of its corporators. No valid reason is perceived for applying the presumption, or, if applied, it furnishes no ground for the doctrine that the suit is by the corporators in their personal capacity. Although they have an interest in the suit, they are not parties in any legal sense, and their interests are merged in the corporate body-. But I cannot agree with the counsel for. the plaintiff, that if the doctrine of presumption is to be maintained it would not apply to these banking associations.- Their location and place of business are fixed by the law of their creation. They are made inhabitants of States for the purposes of taxation, and a majority of their managing officers are required by law to reside in the States of their - respective location. I see no reason why this artificial presumption should not as well apply to them as if incorporated by State authority, especially as in this case where a State -bank by virtue of the - statute was transmuted from a State to a national bank. The day before the change it is admitted that the presumption would apply, while the day after it is .insisted that it would not, although the change was in form only and not in substance. Independent of this presumption, these banks should be deemed citizens of the States where by law they are located within this clause of the Constitution, and this does not impair the decisions in this State, holding that they are foreign corporations under our attachment laws, although located here, because these decisions are based upon the statutory definition of foreign, corporations.

My opinion is that the bank defendant had a right, as a citizen of another State, to apply for a removal of the suit. (40 How. Pr. R., 409.)

The next objection is that all the defendants residing in Massachusetts did not apply, and that it is not competent for one of several defendants residing in another State to remove a suit. This is the general rule. It was frequently so held under the act of 1789, and I think is the rule under all the acts, except the act of 1866, which expressly provides for a removal by one or more defendants. I think also, although with some doubt, that applications under this act must come under the general rule. This doubt arises from the fact that this act was passed as an amendment to the act of 1866, which provided for a removal by one of several parties, and from the peculiar phraseology of the act, that when a suit is pending in which there is a controversy,” etc., between citizens of different States it may be removed, but although called an amendment to the act of. 1866, it provides for a new cause of removal and by either party, and for removing the entire suit, and the word controversy ” should be held coextensive with the whole issue. The general rule that all the parties must join in the application for removal is applicable to applications under this act, but the objection is answered by the exception established to the general rule, which is, that improper, formal or unnecessary parties need not join in the application. (8 Wheat., 451; 5 Cranch, 303; 2 How., 497; 4 J. Chy. R., 94.) There are in this case two actions in one, against different parties, and the actions are united by virtue of a statute of this State. The action is against the bank defendant as the certifier of the check and against the other defendants as drawers. It was unnecessary, and, but for the statute, improper to unite the causes of action in one suit. The defences are distinct and entirely independent of each other, and separate judgments could be entered. It would be unjust to deprive one party of the right of removing his suit, because another action against other parties was allowed to be united in the same suit, and I do not think that a statute of this State can have that effect upon the right of removal by other parties under a Federal law, It is not necessary to determine whether, such, removal would carry the suit against the other parties into the Federal court or not. My opinion is that it would not, and that by the removal the action would become severed,-one going to the Federal and the other remaining in the State court.

The last objection to the validity of the removal is, that a corporation cannot avail itself of the act of 1867 by reason of its incapacity to make the affidavit required hy the act. It is urged by counsel that this act confers upon one party extraordinary power over the litigation, enabling it, by an exp/wte oath of mere belief of the existence of a fact, which cannot be contradicted, and after having the benefit of all the law’s delay ” in the State court, to remove the suit to another court, and that it should be strictly construed, and hence that it should be held to apply to such a party only as is capable of entertaining and expressing a belief, and that the affidavit can in no case be made by any other than the party himself.

There is a difference of opinion among the members of the court upon the point; and upon consultation we have concluded, as probably the most conducive to the interests of both parties in facilitating the final disposition of the case, to sustain the objection and hold that it was not removed.

This brings us to the exceptions at the trial upon the merits. The views expressed by the Supreme Court of the United States in the recent case of Merchants’ Bank v. This Same Defendant (10 Wal., 604), and which accord with repeated decisions of this court, render an elaborate discussion unnecessary.

The certification of a check, if written out, would contain a statement that the drawer had funds sufficient to meet it in the bank applicable to its payment, and an agreement on behalf of the bank that these funds should be- retained and paid upon the check whenever it was presented. The cashier has a right, by virtue of his office, to make this certificate when the drawer has funds. He is the custodian of the funds 'of the bank and of the books; he receives money and gives vouchers therefor; and whether upon receiving a check he pays it in money or gives the holder a certificate of deposit or draft, or a certificate that he will retain sufficient of the money standing to the drawer’s credit to pay it when preented, he is in either case acting within the line of his duty and within the scope of the authority which necessarily attaches to his office.

Whether the bank might not restrict this authority, so as to affect the rights of persons having notice, is not material. It is sufficient that the public have a right to regard his authority as coextensive with these duties, and that such authority is inherent in the office. This is substantially conceded by the learned counsel for the appellants, but they insist that the cashier has no power to make the certificate when the drawer has no funds. I agree that he has not, as between him and the bank, and the liability of the bank is not based upon his power to bind them by such a contract without funds, but upon the ground that the bank cannot dispute the fact that there are funds, and hence the contract is enforced as though there were funds to meet it. It follows that a Iona fide holder only can enforce the liability against the bank, where the certificate is given in the absence of funds.

The bank having placed the cashier in the position which implies this inherent authority, those who deal with the bank have a right to infer that he possesses it, and although the exercise of it in a given case may not be warranted on account of the existence or non-existence of some extrinsic fact peculiarly within his official knowledge, yet the bank is responsible instead of an innocent party, upon every principle of reason and morality. This principle applies to the ordinary relation of principal and agent, and, a fortiori, when the employment concerns the general public involving extensive commercial transactions. (16 N. Y., 125 ; Schuyler's Case, 34 N. Y., 30.) Ultra vires cannot be alleged for telling the truth, even by bank officers, nor can they insist upon a falsehood to the injury of one who has confided in their veracity.

The import of a certification and the liability of the bank upon the principle here indicated legally result from the nature of the agreement and the application of well settled rules of law, and do not depend upon usage or custom. Whether it is competent for banks, by usage or express agreement, to extend their liability so as to include cases where certificates are issued without funds, to the knowledge of the holder, it is unnecessary to determine. Selden, J. (in 16 N. Y., 128), expressed the opinion that banks have no power'to loan their credit in that form. It is clear, however, that where such a certificate is made without funds, by a cashier in fraud of the rights of the bank, no one but a bona fide holder can enforce it.

It is claimed by the counsel for the appellants that the refusal of the bank defendant to unite with other banks in Boston in the adoption of a custom to receive.from each other certified cheeks in payment for balances: and collections, of which the Second National Bank, the agent of the plaintiff’s assignors, and who received the check in question, had notice, operated to charge such agent with notice, that the cashier had no authority to certify this particular check, and that the principals, Jay Cooke & Co., are chargeable with the knowledge of their agent; and, hence, that the plaintiff, having only their title, is not a bona fide holder. Without inquiring whether all these consequences would follow, I am of opinion that the principal proposition is untenable, viz., that notice of the refusal to co-operate with the other banks by the bank defendant operated as a notice of a want of .authority by the cashier to certify this check. The proposed custom of settling balances at the clearing house by certified checks, was a clearing house arrangement for the convenience of the banks themselves, and was subject to such restrictions and regulations as they saw fit to impose or adopt; but the refusal of any particular bank to enter into the arrangement would n,ot affect the power of its cashier to certify checks in the ordinary manner when the drawer had funds, nor the liability of the bank to a bona fide holder when he had not.

The most that can be claimed is that the Second National Bank had constructive notice that the. defendant refused to approve of the new custom, which was not only confined to a special purpose, but, for that purpose, contemplated an unqualified contract on the part of the banks consenting to it to be bound by certifications, without regard to the presence of funds, which,*if valid, could be enforced as a binding contract in cases where an ordinary certificate could not. The ease in 9 Met., 601, was evidently based upon the idea that the liability of banks upon certified checks depended upon usage or custom, and that a teller did not possess the power of a cashier in this respect. The decision was made over twenty years ago, and has not, as I am aware, been repeated by the courts of Massachusetts, although the practice of using certified checks must have prevailed there as elsewhere. It has been repudiated in this and other States, and should not at this day be regarded as the law in Massachusetts, to override a general rule of construction based upon principles of the common law, of universal application.

It is also urged that the court erred in not submitting the lona fieles of the plaintiffs title to the jury. Ordinarily the question of good faith is a question of fact for the jury. Perhaps if a specific request to that effect had been made at the trial, it would have been the duty of the court to submit it, although, with the notice relative to the clearing house arrangement out of the way, I am unable to discern a single fact in the case tending to impeach the good faith of the Second National Bank in receiving this check. It was received in part payment for a draft of $150,000 on Mellen, Ward & Co., and $100,000 gold certificates which were parted with and delivered at the time; and no fact is disclosed throwing suspicion upon the transaction. But the answer to the position is that no such request was made, nor was the attention of the court called to it.

The first six requests are substantially that, as a matter of law, the cashier had no authority, and that there was no evidence authorizing the jury to infer it. The seventh request relates to the effect of the notice as to the clearing house arrangement, which has been already referred to. The eighth and ninth are that Jay Cooke & Co. and the plaintiff" are chargeable with the knowledge of their agent; and the tenth, that the law in New York is not controlling. These requests, and the additional one asking the court to direct a verdict for the defendants, show that the defendants expected and desired the court to dispose of the case as a question of law; •and, as they did not ask that any question of fact should be submitted to the jury, the general exception to the direction to find for the plaintiff is not available, upon appeal, to raise the question.

The result involves, evidently, a considerable loss from the wrongful act of the cashier; but in ethics, as well as law, the party who employed him, and clothed him with the power, should suffer the loss rather than the party who parted with his property upon the faith of the proper exercise of the power. Whenever one of two innocent parties must suffer by the acts of the third, he who has enabled such third person to occasion the loss must sustain it. (2 T. R., 70.)

The judgment must be affirmed.

All concur, except Allen, J., not voting.

Judgment affirmed.