cate all authority as directors, they acquiesced in the cashier's assumption of exclusive management of the bank's business.

Tomlin understood, and from the conduct of the directors had reason to understand, that he was invested with full authority to manage the operations of the bank according to his best judgment, and without disturbing the directors. This explains the fact—which is quite extraordinary, in view of the present position of the bank-that from 1873 to 1880, inclusive, Tomlin, as cashier, entered in the name of the bank, upon the proper records of the county, satisfaction of more than 150 different deeds of trust executed to secure debts held by the corporation. In no instance did he receive previous orders to do so from the directors. His authority or duty to do so was never questioned to his knowledge, or to the knowledge of any one having business with the bank. To all who came into the bank or had transactions with it his control seemed to be as absolute as if he were the owner of all the stock. His authority to make the arrangement with Kenney, Frank & Darrow, and Remsen's trustees, was never questioned by any one until February, 1880, when McFerran returned from Colorado on a visit to Missouri. Tomlin, during his explanation. of the details of that arrangement, exhibited to him the old notes and trust deeds, they having remained in his possession in the package in which he originally placed them for Kenney. McFerran took possession of them, claiming that they were the property of the bank, although after the new deed of trust Kenney had given up the land to the bank and took back a lease from it. The bank, having through Tomlin's management and with the money obtained from Remsen's trustees removed the lien given by the Powers deed of trust, and the lien or the claim of lien upon a part of the lands in virtue of the judgments obtained by the Exchange Bank of Breckinridge and Ryan, now ignores the new deed of trust, and seeks to foreclose the lien given by the original deeds, thereby defeating the prior lien given to Remsen's trustees by the deed of 1879; this, upon the ground that Tomlin, as cashier, without authority and without their knowledge, had assumed to discharge the original debts, to cancel the original trust deeds, and to take a new note secured by a new deed of trust. It is to be observed that while the bank repudiates this arrangement, upon the faith of which Remsen's trustees parted with their money, it retains and does not offer to return, but has used in its business, $3,110.14 of the sum loaned by those trustees through Frank & Darrow to Kenney. It is willing to accept all the benefits resulting from the acts of its cashier, but endeavors to escape the burdens attached to it by the agreement of the parties.

We have stated with some fullness the circumstances disclosed by the record, so that the general expressions in this opinion may be interpreted by the facts of this case. To permit the bank, under these circumstances, to dispute the binding force of the arrangement made by its cashier in reference to Kenney's indebtedness, including the

cancellation of the old note and trust deeds, and the acceptance of the new ones, would be a mockery of justice. It is quite true, as contended by counsel for appellants, that a cashier of a bank has no power, by virtue of his office, to bind the corporation except in the discharge of his ordinary duties, and that the ordinary business of a bank does not comprehend a contract made by a cashier,—without delegation of power by the board of directors,-involving the payment of money not loaned by the bank in the customary way. U. S. Bank v. Dunn, 6 Pet. 51; U. S. v. City Bank of Columbus, 21 How. 356; Merchants' Bank v. State Bank, 10 Wall. 604. Ordinarily, he has no power to discharge a debtor without payment, nor surrender the assets or securities of the bank. And, strictly speaking, he may not, in the absence of authority conferred by the directors, cancel its deeds of trust given as security for money loaned,-certainly not, unless the debt secured is paid. As the executive officer of the bank, he transacts its business, under the orders and supervision of the board of directors. He is their arm in the management of its financial operations. While these propositions are recognized in the adjudged cases as sound, it is clear that a banking corporation may be represented by its cashier, at least where its charter does not otherwise provide,-in transactions outside of his ordinary duties, without his authority to do so being in writing, or appearing upon the record of the proceedings of the directors. His authority may be by parol and collected from circumstances. It may be inferred from the general manner in which, for a period sufficiently long to establish a settled course of business, he has been allowed, without interference, to conduct the affairs of the bank. It may be implied from the conduct or acquiescence of the corporation, as represented by the board of di rectors. When, during a series of years or in numerous business transactions, he has been permitted, without objection, and in his official capacity, to pursue a particular course of conduct, it may be presumed, as between the bank and those who in good faith deal with it upon the basis of his authority to represent the corporation, that he has acted in conformity with instructions received from those who have the right to control its operations. Directors cannot, in justice. to those who deal with the bank, shut their eyes to what is going on around them. It is their duty to use ordinary diligence in ascertaining the condition of its business, and to exercise reasonable control and supervision of its officers. They have something more to do than, from time to time, to elect the officers of the bank, and to make declarations of dividends. That which they ought, by proper diligence, to have known as to the general course of business in the bank, they may be presumed to have known in any contest between the corporation and those who are justified by the circumstances in dealing with its officers upon the basis of that course of business.

These principles govern the case before us, and lead necessarily to

an affirmance of the decree adjudging the surrender and cancellation of the old deeds and the notes given by Kenney, and declaring the liens in favor of Remsen's trustees and Frank & Darrow to be superior to that of the bank. It is so ordered.

(109 U. S. 629)

In re Petition of BOYER and another for a Writ of Prohibition.1

(January 7, 1884.)

ADMIRALTY JURISDICTION-COLLISION BETWEEN CANAL-BOATS ON ILLINOIS AND LAKE MICHIGAN CANAL.

The district court of the United States for the northern district of Illinois, as a court of admiralty, has jurisdiction of a suit in rem against a steam canal-boat, to recover damages caused by a collision between her and another canal-boat, while the two boats were navigating the Illinois and Lake Michigan canal, at a point about four miles from its Chicago end, and within the body of Cook county, Illinois, although the libelant's boat was bound from one place in Illinois to another place in Illinois.

Robert Rae, for petitioners.

C. E. Kremer, for respondents.

BLATCHFORD, J. The owners of the canal-boat Brilliant and her cargo filed a libel in admiralty, in the district court of the United States for the northern district of Illinois, against the steam canalboat B & C, in a case of collision. The libel alleges that the Brilliant is a vessel of more than 20 tons burden, and was employed, at the time of the collision, in the business of commerce and navigation between ports and places in different states and territories of the United States, upon the lakes and navigable waters connecting said lakes; that the B & C is a vessel of more than 20 tons burden, and was, at the time of the collision, enrolled and licensed for the coasting trade, and employed in the business of commerce and navigation between ports and places in different states and territories of the United States, upon the lakes and navigable waters of the United States; that in August, 1882, the Brilliant, while bound from Morris, Illinois, to Chicago, Illinois, towed, with other canal-boats, by a steam canalboat, and carrying the proper lights, and moving up the Illinois and Lake Michigan canal, about four miles south of the Chicago end of the canal, was, through the negligence of the B & C, struck and sunk, with her cargo, by the B & C, which was moving in the opposite direction, to the damage of the libelants, $1,500. The owners and claimants of the B & C answered the libel, giving their version of the collision, and alleging that it was wholly due to the faulty navigation of the Brilliant, and that it occurred on the Illinois and Michi

1S. C. 18 Fed. Rep. 543.

gan canal, at a place within the body of Cook county, in the state of Illinois. In November, 1883, the district court made an interlocutory decree, finding that both parties were in fault, and decreeing that they should each pay one-half of the damages occasioned by the collision, to be thereafter ascertained and assessed by the court. The owners of the B & C have now presented to this court a petition praying that a writ of prohibition may issue to the judge of the said district court, prohibiting him from proceeding further in said suit. The ground alleged for the writ is the want of jurisdiction of the district court, as a court of admiralty, over the waters where the collision occurred.

The Illinois and Michigan canal is an artificial navigable waterway, connnecting Lake Michigan and the Chicago river with the Illinois river and the Mississippi river. By the act of congress of March 30, 1822, c. 14, (3 St. 659,) the use of certain public lands of the United States was vested in the state of Illinois forever, for a canal to connect the Illinois river with the southern bend of Lake Michigan. The act declared "that the said canal, when completed, shall be and forever remain a public highway, for the use of the government of the United States, free from any toll or other charge whatever for any property of the United States, or persons in their service, passing through the same." This declaration was repeated in the act of March 2, 1827, c. 51, (4 St. 234,) granting more land to the state of Illinois to aid it in opening the canal. We take judicial notice of the historical fact that the canal, 96 miles long, was completed in 1848, and is 60 feet wide and 6 feet deep, and is capable of being navigated by vessels, which a canal of such size will accommodate, and which can thus pass from the Mississippi river to Lake Michigan and carry on interstate commerce, although the canal is wholly within the territorial bounds of the state of Illinois. By the act of 1822, if the land granted thereby shall cease to be used for a canal suitable for navigation, the grant is to be void. It may properly be assumed that the district court found to be true the allegations of the libel, before cited, as to the character and employment of the two vessels, those allegations being put in issue by the answer.

Within the principles laid down by this court in the cases of The Daniel Ball, 10 Wall. 557, and The Montello, 20 Wall. 430, which extended the salutary views of admiralty jurisdiction applied in The Genesee Chief, 12 How. 443, The Hine v. Trevor, 4 Wall. 555, and The Eagle, S Wall. 15, we have no doubt of the jurisdiction of the district court in this case. Navigable water situated as this canal is, used for the purposes for which it is used,-a highway for commerce between ports and places in different states, carried on by vessels. such as those in question here,-is public water of the United States, and within the legitimate scope of the admiralty jurisdiction conferred by the constitution and statutes of the United States, even though the canal is wholly artificial, and is wholly within the body of

a state, and subject to its ownership and control; and it makes no difference as to the jurisdiction of the district court that one or the other of the vessels was at the time of the collision on a voyage from one place in the state of Illinois to another place in that state. The Belfast, 7 Wall. 624. Many of the embarrassments connected with the question of the extent of the jurisdiction of the admiralty disappeared when this court held, in the case of The Eagle, ubi supra, that all of the provisions of section 9 of the judiciary act of September 24, 1789, c. 20, (1 St. 77,) which conferred admiralty and maritime jurisdiction upon the district courts, were inoperative, except the simple clause giving to them "exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction. That decision is carried out by the enactment in section 563 of the Revised Statutes, subd. 8, that the district courts shall have jurisdiction of "all civil causes of admiralty and maritime jurisdiction," thus leaving out the inoperative provisions.

This case does not raise the question whether the admiralty jurisdiction of the district court extends to waters wholly within the body of a state, and from which vessels cannot so pass as to carry on commerce between places in such state and places in another state or in a foreign country; and no opinion is intended to be intimated as to jurisdiction in such a case.

The prayer of the petition is denied.

(109 U. S. 651)

WINCHESTER & PARTRIDGE MANUF'G Co. v. FUNGE.

(January 7, 1884.)

Debtor and CREDITOR-PAYMENT IN WAGONS-ACCEPTANCE DELIVERY IN PART. For the purpose of settling a debt, the debtor gave to the creditor orders for 25 wagons, and the creditor gave to the debtor a written receipt, which he accepted, stating that the wagons were to be received in payment of the claim, provided they were delivered to the creditor in good condition and merchantable order, and that it was understood and agreed that if the wagons were so delivered in good condition they were to be sold for the highest prices that could be obtained for them, and the surplus, after paying the debt and cost of selling, should be refunded to the debtor. Twenty-one of the wagons were delivered, but none of them were in good condition and merchantable order. The creditor sold 19 of them, and made ineffectual efforts to sell the other 2, and, after crediting the net proceeds of sale, sued the debtor to recover the balance of the debt. He'd, that the receiving the 21 wagons and proceeding to sell them was an acceptance of them pro tanto in payment of the claim; that the contract for the payment in wagons was unfulfilled as to the 4 wagons not delivered; and that the price for which the 19 wagons were sold, and the selling value of the 2 not sold, had no bearing on the case, unless there was surplus of the proceeds of sale to be refunded to the debtor under the contract.

Appeal from the Supreme Court of Utah Territory.