CHAPTER VII. USAGES AND CUSTOMS. THE banking business is peculiarly a business of routine. To an unusual degree it requires and admits of a thorough and perfect organization even in the most minute matters. Hence it naturally results that bankers and banks, much more than any other class either of individuals or corporations in the business community, are wont to institute many rules, usages, and customs whereby they seek to regulate the conduct of their daily affairs. These rules, usages and customs assume various forms; thus there are those which are recognized by all, or by the vast majority of the banks doing business in a single city; there are those which are peculiar to a small minority; there are those which have been adopted by a single bank either in the shape of by-laws or only as practices habitually observed by it; there are the laws or articles of clearinghouse associations. These are of various degrees of authority according to their nature; but a satisfactory treatment of them is rendered difficult, indeed impossible, by reason of the strange lack of cases upon some of the most obvious and important points. Banking-Hours. Only one banking usage has ever been judicially taken notice of by the courts, and that is the usage of "banking-hours." All banks are wont to establish certain hours of the day within which only they will undertake to transact business either with the public or with their own customers. The "day" in banking parlance means simply these few hours. In large cities the banks are wont to agree upon and adopt the same hours. Whether or not the courts will take judicial cognizance of what are banking-hours in any particular place is of course a question which must be decided specially concerning that particular place. American courts, however, are wont to take judicial notice of the banking-hours of any large city lying within the area of the jurisdiction of the court. Though there is no authority for supposing that the banking-hours of the city of New York would be considered as judicially known to the courts of Boston or Chicago, or vice versa. Unquestionably proof would have to be introduced. Only the courts sitting in those cities respectively, and perhaps the courts sitting elsewhere in the respective States, would judicially know the respective bankinghours. The English courts take judicial notice of what are banking-hours in the "city," so called, of London;1 but in other parts of London and in other cities and towns, the hours must be proved.2 Essential Elements of a Legal Banking Usage. What lapse of time, or how many instances actually occurring, are requisite to establish a custom, is one of those questions attended with such an intrinsic and essential indefiniteness as prevents the possibility of any certain answer. An usage must have a beginning, certainly. But in its early stages it is no more a complete usage in the eye of the law, having the legal attributes thereof, than a boy in his nonage is a man, having the legal rights of a man. Twenty-one years is the arbitrary limit which distinguishes the legal infant from the legal man. But no number either of years or of recurrent acts and instances, can be arbitrarily set to mark accurately the transition period when the usage ceases to be embryonic and becomes perfect. The understanding, arrangement, or directions of bank officers that a certain method shall there 1 Parker v. Gordon, 7 East, 385; Jameson v. Swinton, 2 Taunt. 225. after be observed as the usage of the bank for the transaction of a certain class of acts, does not render this method a legal usage of the bank as towards any outside party until time and practice shall suffice to give it that character which it does not and can not derive from the intention of the officials. But time and practice bring in their train acquiescence and notoriety, and from these the law will draw the inference of knowledge on the part of the public, if the usage is that of the banks generally, or on the part of the parties dealing with the bank, if the usage is that of an individual bank only. Especially if the custom is in derogation of the common law, a short time and a few instances of practice under it will be insufficient to obtain its recognition.1 But a single instance of practice under a usage, though it would be utterly worthless to establish the fact of the custom is yet amply sufficient to bring home notice of the existence of an already established custom to the persons dealing with the bank and having knowledge of such single instance.2 Properly speaking a banking usage ought to be peculiar to a certain city rather than to a certain bank. Any special system consistently and uniformly adopted by all the banks of a particular place is a matter which may properly be assumed to be known to the community which resides and does business in that place. The duty and the right of the public must then be regarded as reciprocal. Each individual will be held to a knowledge of such general usage, though he was in fact ignorant of it, and was a loser solely by reason of this ignorance. On the other hand each individual will have a right to assume and demand that any bank in the place shall deal with him. according to this usage, unless he has actual notice that it intends to deal otherwise, or unless his relations to the bank are such that the court will not hear him deny that he has had 1 Duvall v. Farmers' Bank, 9 Gill & J. 31; Adams v. Otterback, 12 How. U.S. 539. 2 Dorchester and Milton Bank v. New England Bank, 1 Cush. 177. 3 Adams.v. Otterback, 12 How. U. S. 539. such notice. It has been said that persons dealing with any bank fall within the latter description and are bound to know its customs and usages. The cases to this effect are numerous and conclusive, but in order to understand them aright, it is peculiarly necessary to observe the facts which are discussed in each, and to interpret the language by the light of these facts. This process will show very clearly that the dealing with the bank which is commonly declared to conclude the dealer from alleging ignorance of the customs of the bank, is where such person is a customer of the bank, or is making use of the facilities which it holds out. A depositor in a bank or one who gives a note to a bank to collect, or who makes his notes payable at a bank, is properly held imperatively to an implied knowledge of the legal usage of the bank in its dealings with depositors, in its collecting, or in its system of paying notes made payable at its counter. He is a dealer with the bank in these matters.1 But the fact that one is the holder of a check drawn upon a bank, or the debtor upon a note held by it for collection, or is the payee of paper made payable at its office, does not bring such person within either the reason or the language of these decisions. He is not a customer, nor, in the sense in which the word is used in these cases, is he one dealing with the bank. He is therefore held to no knowledge of any peculiar habit of this individual bank. He must assume, unless he has positive knowledge to the contrary, that it conducts its transactions like the other banks in the same place; and its usage to conduct them differently in any respect must be specially brought home to him before it can affect him disadvantageously. But the custom of the single bank, once known, enters into all subsequent contracts and dealings with it.2 The doctrine is very clearly put by Mr. Justice Story in 1 Bank of Columbia v. Magruder, 6 Har. & J. 172; Lincoln and Kennebeck Bank v. Page, 9 Mass. 155; Smith v. Whiting, 12 id. 8; Mills v. Bank of the United States, 11 Wheat. 431; Chicopee Bank v. Eager, 9 Met. 584; Lime Rock Bank v. Hewett, 52 Maine, 531; Gindat v. Mechanics' Bank, 7 Ala. 325. 2 Patriotic Bank v. Farmers' Bank, 2 Cranch, C. C. 560; Renner v. Bank of the cited case of Mills v. Bank of the United States. If a note is made payable at a particular bank there is no ground for demanding that the bank shall depart from "general commercial usage" for any other purpose than that of conforming to its own individual usages. Evidence of the usage of any number of other banks not amounting to "general commercial usage" is inadmissible to fix the duties of this especial bank, unless conformity to this particular usage and adoption of it can also be brought home to this bank. It cannot be supposed that "the particular usage of other banks not mentioned in the contract" ever fell within the contemplation of the parties to that contract.1 But if there is no intimation whatsoever upon a note that the maker intended or expected that it would be negotiated at a particular bank, he is not bound by the fact that he has positive knowledge of the usage of such bank in regard to notice, &c., upon such notes. For it does not appear that he ever anticipated that his note would ever come into this bank and therefore that this usage would be applied to this particular note. The case of the Lime Rock Bank v. Hewett furnishes an unusually excellent illustration of this doctrine. Two notes were sued upon in that case, and the same person was an indorser upon each. One of them was made payable at the bank, and was indorsed over by him to the bank. The other was not made payable at the bank, and was indorsed by him generally; indeed there were subsequent indorsers before the note came into the possession of the bank. The indorser was shown to be personally connusant of a usage of the bank in notifying. Upon the first note it was held that he was bound by this usage, the circumstances constituted a conclusive presumption of his assent, and would have been equally conclusive of his knowledge had this not been otherwise expressly shown. But Columbia, 9 Wheat. 582; City Bank v. Cutter, 3 Pick. 414; Bridgeport Bank v. Dyer, 19 Conn. 136. 1 Camden v. Doremus, 3 How. 515. |