vires is no defense to an action for fraud and deceit. Morawetz on Private Corporations, §§ 726-7. Morse on Banks and Banking, (4th Ed.) § 727.
“The proposition is sustained by the authorities that a corporation may be charged with any wrong that may be committed through an agent, and may be held liable for any damages caused by his deceit or false representations. In stich case the doctrine of ultra vires has no application.” Dorsey Mach. Co. v. McCaffey, 139 Ind. 545; 38 N. E. 208; 47 Am. St. ep. 290 cited by the court.
“There is no rule of law which requires men in their business trans- actions to act upon the presumption that all men are knaves and liars, and which declares them guilty of negligence, and refuses them redress, whenever they fail to act on that presumption.” Strand v. Griffith, 97 Fed. 856-7. 12 R. C. L. 360. Pronger v. Old National Bank, 56 Pac. 391 (Wash.)
“If the officer purports to represent the bank in making reply to the inquiry, the inquirer has a right to rely upon the statement as being the statement of the bank, and “ultra vires” will not shield the bank from liability for the officer’s fraud. Such is the holding of the courts. Nevada Pank v. Portland Nat'l. Bank, 59 Fed. 338. Hindman v. First Nat’l. Bank of Louisville, 98 Fed. (6th Cir.) 562; 39 C.C. A. 1; 48 L.R.A. 210, opinion by Tait, Judge. Same case 112 Fed. 931, on second appeal opinion by Lurton, Judge.
“It is enough to entitle plaintiff to recovery if the false representation complained of was a material inducement to the contract or transaction which occasioned the jury, although there may have been other co-operating inducements.” Sioux National Bank v. Norfolk State Bank 56 Fed. 139.
Lawrence, Murphy & Nilles, for respondent.
One who deals with the President of a National Bank in a transaction known to be outside the legitimate sphere of its administration, has no tight to presume that the act of the officer has been sanctioned by the Board of directors or other governing body as an act done by an officer of such bank in furtherance of his business venture which is in excess of the corporate powers cannot be said to be an act which is within the scope of the customary powers of such officer. Bank v. Smith, 77 Fed. 129; Bank of Manistee v. Bank of Milwaukee, 83 Fed. 725; Gas
