A bank has not the right to lend its credit on personal security, nor can it become an accommodation maker of drafts,1 or an accommodation in-dorser of commercial paper;2 but such indorsement or such accommodation draft is valid in the hands of a hona fide holder.3 Since it may receive special deposits, a national bank is liable for its negligence where it undertakes to recover stolen special deposits.4 A bank may guaranty the payment of a note discounted by it5 or sold by it.6 But a guaranty against loss given by the president to sureties upon a note to the bank, or upon any transaction not made by the bank, is beyond the power of the bank.7 A certification of a check is in effect a guaranty of its payment by the bank, and, as such, it may be oral,8 if the drawer has funds, or conditioned upon the payment of a draft left with it for collection.9 But one case decides that, where a man deposits securities with one bank, and that bank guaranties the securities to a second bank, which thereupon issues a letter of credit to the depositor of the securities, the guaranty is not binding upon the first bank.10 This case is clearly wrong, because the transaction was in effect a deposit of notes with the first bank, which thereupon discounted or transferred them, to the second bank by guarantying their payment.

3 National Bank of Commerce v. National Bank of Mo., Fed. Cas. No. 18,310.

4 Cases last cited.

5 Riddle v. First Nat. Bank, 27 Fed. R 503; Hunt v. Appellant, 141 Mass. 515.

6 Logan Nat. Bank v. Williamson,

2 Ohio Cir. Ct. R 118.

1 Johnson v. Charlottesville Nat. Bank, 3 Hughes, 657.

2 National Bank of Commerce v. Atkinson, 55 Fed. R 465.

3 Johnson v. Charlottesville Bank,

3 Hughes, 657.

4 Wylie v. Northampton Nat. Bank, 15 Fed. R 426, reversed 119 U. S. 361, holding the text.

5 Talman v. Rochester City Bank, 18 Barb. 123; Dabney v. State Bank, 3 S. C. 124 The rule is the same as to national banks. People's Bank v. National Bank, 101 U. S. 181.

6 Thomas v. City Nat. Bank, 40 Neb. 501.

7 First Nat. Bank v. Bennett, 33 Mich. 520. What the court probably meant to decide was that parol evidence was inadmissible to vary the terms of the written contract. Comm. Nat. Bank v. Pirie, 82 Fed. R 799.

8 Merchants' Nat. Bank v. First Nat Bank, 7 W. Va. 544