This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 259.— (1) A bank's customer at his death has a deposit in his own name, believed to be his own money. The bank holds unmatured paper on which he is a promissor or endorser. Can the bank hold the money until this paper has matured and then charge the same against his account ? How if the estate is insolvent?
(2) How would it be if it were shown that although the money stood in his own name, it was really trust money ?
Answer.— (1) The bank could not hold the money if an executor or administrator duly appointed should bring suit for the amount before the bills mature, but would be entitled to set off any bills maturing before action brought. We think the same result would follow if the estate were insolvent.
(2) The fact that the money was trust money, if not known to the bank, would not affect the right set-off. (See Union Bank of Australia v. Murray Aynsley, in the Journal for April, 1899.)