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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. 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. 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.
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.
1 Camden v. Doremus, 3 How. 515.
upon the second note he was held not bound by the usage. For though he knew it, yet it was, as regarded this note, a mere abstract fact, there being nothing whatsoever to show that he ever contemplated that the note should pass into the possession of this especial bank, or be subjected to the effect of any of its usages.
Generally speaking it cannot be presumed that a person is acquainted with the customs of doing business which obtain among the banks of any place distant from that in which he himself lives and deals. But if he enters into any transaction which he is aware must be reasonably expected to involve a dealing with or through the banks of the distant place, his knowledge of and assent to their customs will be implied. This is only a slight extension of the principle which declares every person dealing with a bank to be affected with knowledge of its usages, and is supported by the cases which assert that doctrine. 1
Established Usages and Alterations in them. Usage having been once found and sanctioned by the courts, evidence to disprove its existence becomes thereafter inadmissible. But this refers only to its existence at that time at which the decision found the fact of its existence. For a usage is sustained by the courts not because it is in itself law, but generally in spite of the fact that in itself it is not law and because it is the uniform practice of the community which the judiciary from motives of policy will refrain from interfering with. But if at any time it ceases to become the practice of the community it will no longer be judicially recognized as binding. For all transactions occurring during the period that it remained unchanged it must always be law, but transactions occurring after the change will not be affected by it. Evidence of the fact of a change is therefore admissible to show that
1 Bank of Washington v. Triplett, 1 Pet. 25.
the previous decisions have ceased to be controlling precedents, or to indicate the true rule.1
Precision in Proof of Usages. The business of banking admits of great nicety of organization in matters of detail. To this trait is doubtless due the great strictness and accuracy with which customs must be proved and will be construed. So far from its being permissible to make the slightest approach to a generalization or to an argument from the closest of analogies, the tendency of the courts has been to trim the usage to its very narrowest proportions, and to require the most perfect adaptation of the facts of the case to these. That two acts are essentially dependent for their exercise upon power of precisely the same description, that one is a natural corollary of the other, that one is conveniently exercised in conjunction with the other, will not suffice to authorize the doing of the second when the right to do the first is dependent upon a custom. Even power to do a certain act arising from a custom to do it for a particular purpose or under particular circumstances, does not imply or include power to do the same act for a very slightly different purpose or under very slightly different circumstances. Supporting an act upon proof of a banking usage is a matter of very delicate and minute accuracy.2
“ Internal Usages.”
The customs and usages of a bank by which persons outside of the corporation can be affected, are only such as relate to its dealings with such outsiders. Rules, usages, and customs established within the institution itself for the regulation of its internal affairs and of the daily routine of its business, for the government of its clerks, the keeping of its books, and all
i Cookendorfer v. Preston, 4 How. U. S. 317. ? Mussey v. Eagle Bank, 8 Met. 306.
like matters, are things with which the public has nothing whatsoever to do. They may be arbitrarily instituted and changed at any time by the government of the bank. They are only for its own convenience. Even if they are known to its customers, no assent on the part of the customers is implied by reason of this knowledge. They do not affect the rights of the customers, in which alone the customers can be supposed to be interested ; they are the internal arrangements with which the customer has nothing whatsoever to do whether he knows them or not and whether he approves them or not. Their observance or non-observance is an affair exclusively between the corporation and its servants.
By-Laws. A by-law does not constitute a usage; neither is it proof of a usage. If a by-law requires a person having a certain transaction with a bank to perform a certain act, and he in fact does not perform it, he cannot be affected with the legal consequences of a performance on the ground that it was a usage of the bank to require performance, that he knew the usage and must be assumed to have intended to conform to it. Thus in the case cited it was held that to admit evidence of the usage set up would be to admit parol testimony for the purpose of varying the written contract of indorsement; and this of course would be impossible. Further, it was said, the usage claimed, if proved, would be only a usage for the customer to make such an agreement. By strict construction, therefore, it would not, even if fully shown, have any effect upon a transaction in which the agreement was distinctly not made.
A by-law of a bank, or even its usage, if the usage be known to the stockholders, of refusing to allow any stockholder to transfer his stock so long as he is indebted to the bank, is
1 Munn v. Burch, 25 Ill. 35.
2 Central Bank v. Davis, 19 Pick. 373; Piscataqua Exchange Bank v. Carter, 20 N. H. 246.