The Farmers and Mechanics' Bank, of Kent County, Maryland v. the Butchers and Drovers' Bank

Summary

The New York Court of Appeals affirmed the judgment, holding that a bank is liable to a bona fide holder for value of a certified check even when the teller lacked authority because the bank had no funds of the drawer, because the certification operates as a virtual acceptance of a bill of exchange. The dissent argued that the teller’s authority was limited to checks backed by actual funds and that the bank should not be bound by unauthorized certifications.