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A national bank may become the depository of a fund which is to stand as security and be paid to a third person under certain contingency. Bushnell v. Chautauqua County Nat. Bank, 1878, 74 N.Y. 290. See, also, > Sykes v. Canton First Nat. Bank, 1891, 2 S.D. 242, 49 N.W. 1058.

> 68. ---- Collateral for contract performance

The act of a national bank in accepting a deposit to be held by it as collateral security for the performance of a contract between the depositor and another is not illegal, and it would be estopped to set up the defense of ultra vires against one making such a contract with it relying thereon. Bushnell v. Chautauqua County Nat. Bank, Sup.1877, 10 Hun 378, affirmed in 74 N.Y. 290.

National bank is not authorized under national banking laws to lend deposited money on depositor's behalf. > Carr v. Weiser State Bank of Weiser, Idaho 1937, 66 P.2d 1116, 57 Idaho 599.

Under this section, a national bank had no authority to enter into a contract for loaning money of a depositor kept in a deposit account through its cashier authorized by the depositor to draw thereon to make loans. > Holmes v. Uvalde Nat. Bank, Tex.Civ.App.1920, 222 S.W. 640, error refused.

A bank has no right to loan the money of other persons. > Grow v. Cockrill, Ark.1897, 39 S.W. 60, 63 Ark. 418.

A national bank may receive, before maturity, payment of debts owing to the bank, although such debts bear a high rate of interest, if the money is needed for the legitimate business of the bank. Keyser v. Hitz, D.C.Sup.1883, 13 D.C. 513, affirmed > 8 S.Ct. 143, 123 U.S. 297, 31 L.Ed. 156.

> 77. Partnership agreements

A national bank is liable in a civil action for fraud perpetrated under the guise of a partnership agreement, though it had no power to make such an agreement. > Pronger v. Old Nat. Bank, Wash.1899, 56 P. 391, 20 Wash. 618.

In a suit by national bank on a promissory note wherein defendants claimed partnership with the bank, such contract, if any, although performed, was not binding on the bank, it being ultra vires and the bank not having profited thereby. > First Nat. Bank v. Stokes, Ark.1918, 203 S.W. 1026, 134 Ark. 368.

A national bank, having joined with other persons in a partnership to operate a mill, cannot be prevented from recovering moneys loaned to the firm, on the ground that it had no power to become a partner in a mill. > Cameron v. First Nat. Bank, Tex.Civ.App.1896, 34 S.W. 178.

> 111. Generally

The discount of negotiable paper is the form according to which national banks are authorized by this section to make their loans, and the terms "loans" and "discounts" are synonymous. > National Bank v. Johnson, U.S.N.Y.1881, 104 U.S. 271, 14 Otto 271, 26 L.Ed. 742.

The words "by discounting and negotiating promissory notes, drafts, bills of exchange," and so forth, are not to be read as limiting the mode of exercising "such incidental powers as shall be necessary to carry on the business of banking," but as descriptive of the kind of "banking" which is authorized. > First Nat. Bank v. National Exch. Bank, U.S.Md.1875, 92 U.S. 122, 2 Otto 122, 23 L.Ed. 679. See, also, > Western Nat. Bank v. Armstrong, Ohio, 1894, 14 S.Ct. 572, 152 U.S. 346, 38 L.Ed. 470; > Nebraska v. Orleans First Nat. Bank, C.C.Neb.1898, 88 F. 947; > Shinkle v. First Nat. Bank of Ripley, 1872, 22 Ohio St. 516; > Cleveland, Brown & Co. v. Shoeman, 1883, 40 Ohio St. 176.