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The Law Of Banks And Banking | by John Maxcy Zane



Including acceptance, demand and notice of dishonor upon commercial paper with an appendix containing the federal statutes applicable to national banks

TitleThe Law Of Banks And Banking
AuthorJohn Maxcy Zane
PublisherT. H. Flood And Company
Year1900
Copyright1900, John Maxcy Zane
AmazonThe law of banks and banking

By John M. Zane Of the Chicago Bar

-Prefatory Note
It is the aim of this treatise to present all the law that can be properly considered as applicable to the business of banking. The work is expected to be of use not only to lawyers, but also to banke...
-Introduction
In the history of the common law the conception of a bailment is much older than the conception of agency or trust. These three things, which are so distinctly differentiated at the present day, Have ...
-Introduction. Part 2
3 See 147, post. 4 See 147, post. 5 See 171, 133, port. 6 See note 2, 186, post. The disregard of these conceptions of the common law, both by courts and text-write...
-Introduction. Part 3
10 See 33, post. 11 See 113-117, post. 12 See 105, post. 13 See note 30 to 147, post, note 26 to 138, post, note 22 to 140, post, and note 2 to ...
-Chapter I. Banks, Organization And Proof Of Existence. Sec. 1. General Classification
The terms hank and banker represent conceptions so commonly understood that a satisfactory definition or classification ought not to be difficult. But banks may be defined by reference to their mode o...
-Sec. 2. General Definition
A learned and generally accurate judge,1 attempting a general definition, has defined a banker to be one who keeps a place for the traffic of money; who there receives it from others and keeps it wi...
-Sec. 3. Under Revenue Laws
It is apparent that courts, in construing revenue laws, will give terms a wider meaning than when construing a penal statute, or a statutory or constitutional prohibition, when it is sought to bring a...
-Sec. 4. Under Constitutional And Statutory Restrictions
The general restrictions against banking in constitutions Lave been without exception held to apply only to banks of issue. Courts have been compelled to apply harsh measures to constitutional absurdi...
-Sec. 5. Construction Of Charters
The court, in the case just cited, intimates that under such a charter the association might be exceeding its powers in doing a general banking business. Courts, generally, in construing charters, con...
-Sec. 6. Under Penal And Forfeiture Statutes
The strictest rule in favor of the citizen is applied in this class of cases. Courts have gone quite far in verbal refinements in order to mitigate penalties. The cases mentioned in the note below are...
-Sec. 7. The Right Of Banking
At common law, the various kinds of banking, whether of issuing notes, discounting paper, or receiving deposits, were the privileges of any one who chose to exercise the right. This would seem to be t...
-Sec. 8. When A Franchise
All the courts seem to have recognized that the power to issue notes to circulate as money could be made a franchise.1 No,one ever seems to have questioned the right of the legislature to make the pow...
-Sec. 9. Right Of Private Banking
Originally banking in all its branches was a common-law privilege, as we have stated. The fearful evils of unrestrained banking in its branch of issuing notes caused the privilege to be curtailed. The...
-Sec. 10. The Probable Rule
The objection to such statutes is that they deprive the citizen of a valuable property right, to wit: the right to pursue a lawful calling.1 It is claimed to be in violation of the due process of law ...
-Sec. 11. Question Considered On Principle
It may be conceded that to take away the business of a private banker, who has for many years carried on a lucrative and honorable business, seems a wholly unwarranted proceeding. Everything that can ...
-Sec. 12. Further Questions
Even if private banking be absolutely prohibited by the state constitution, the question remains whether the state constitution is opposed to the federal constitution. If the state constitution were o...
-Sec. 13. Formation Of A Bank
Where private banking is lawful and a private bank is started by an individual or individuals, there appear to be no special circumstances requiring notice whether the bank is formed by an individual ...
-Sec. 14. Joint-Stock Companies
In states permitting joint-stock companies to be formed for banking purposes the statute must be strictly followed.1 If this be not done the joint-stock company is a general partnership.2 The rule as ...
-Sec. 15. Corporations
A corporation can be formed only under authority from the sovereign power. In the divided sovereignty as between the general government and the states, it was early settled l that congress had the pow...
-Sec. 16. State Banks Of Issue
It is too plain for argument that a bank note is a bill of credit, and that no state under the federal constitution can issue a bill of credit;1 yet our federal supreme court has decided that the stat...
-Sec. 17. State Bank Tax
The state bank tax of ten per cent, upon the notes issued by all state banks and private bankers is the method by which the national government preserves the country from unrestrained note issues.1 Ou...
-Sec. 19. Formation Of Corporations
A corporation may be formed either by the grant of a special charter, where such a course is permissible, or by incorporation under a general law. A bank formed under a special act becomes, by implica...
-Sec. 20. Conversion Of State Into National Banks
The national bank act gives the right to convert any bank organized under a special act or general law of a state into a national bank upon the certificate of the directors that two-thirds of the stoc...
-Sec. 22. Power As To By-Laws
The power of a banking corporation to enact by-laws, whether the right is granted by the charter or is used as an inherent power, does not differ from the rules in regard thereto governing other corpo...
-Sec. 23. Proof Of Corporate Existence
The corporate existence may come directly in question or indirectly. It comes directly in question when a suit is brought by the state to forfeit the charter. In such case, nothing being presumed agai...
-Sec. 24. Power Under Charters As To Branches
If the law or the charter of a bank prohibits the establishment of branches, it of course cannot do so; but if the law of the state prohibits branches of a bank, whether of the state or a foreign bank...
-Sec. 25. Conflict Of National And State Laws
A corporation chartered as a bank by the national government cannot be controlled in any way by state laws in the exercise of the rights granted by congress.1 It is wholly exempt from state control or...
-Chapter II. Unauthorized Banking. Sec. 26. Scope Of The Subject
The act of banking maybe unauthorized for the reason that it is done by a person or corporation prohibited from doing the act. A private person, or a partnership of private persons, may be forbidden t...
-Sec. 27. Private Banking Unauthorized
Confining ourselves to a particular locality, without reference to the question of conflict of laws, if an act of private banking is absolutely forbidden by a legal prohibition, which contains the ass...
-Sec. 29. Conflict Of Laws As To Private Banking
The general rule as to contracts is that the law of the place where the contract is entered into governs the contract, unless it was to be performed in another place, when the law of the latter place ...
-Sec. 30. Corporations Formed Under Unconstitutional Law
An unconstitutional law is really a contradiction in terms; a more correct phrase is an attempt to pass an unconstitutional enactment. The unconstitutionality may arise from various reasons, such as a...
-Sec. 31. De Facto Corporations
By a curative act the legislature, if otherwise empowered to pass the act, can cure a defective organization and thus remove all question of the validity of past as well as future acts of the corporat...
-Sec. 32. Statutory Prohibitions
But where the act required to be performed is a condition precedent, without which the bank is enjoined from doing any business, the failure to perform the act is fatal, whether urged in favor of the ...
-Sec. 33. Ultra Vires Acts
The words ultra vires have been unfortunately used to describe very different things, and in consequence great confusion in the law has resulted. It means beyond the powers, and when applied to a corp...
-Sec. 33. Ultra Vires Acts. Part 2
4 Union Trust Co. v. Illinois Midland Co., 117 U. S. 434; Bank v. Matthews, 98 U. a 621; Volz v. National Bank, 158 III 532; Anderson v. First Nat Bank. 67 N. W. R, 821; First Nat. Bank v. Smith, 65 ...
-Sec. 33. Ultra Vires Acts. Part 3
Co. v. Chicago, etc. Ry. Co., 163 U. S. 564,581, will need to be passed over. The distinction is not new. It is explained in Whitney Arms Co. v. Barlow, 63 N. Y. 62. It is noticed, without any apparen...
-Sec. 34. Banking Powers
The charter of a banking corporation usually confers upon it general banking powers, with a prohibition, very often inserted, against exercising the power of issuing notes. The meaning of this phrase ...
-Sec. 35. Liability Of Corporators As Partners
Sometimes it will happen that a number of persons will assume to institute a corporation without having received any charter whatever. If a corporation be afterwards formed and the act be lawfully rat...
-Sec. 36. Direct Liability For Unauthorized Banking
We have in the preceding sections noticed the result of acts of unauthorized banking as between other parties than the bank and the state. How far the state may go in forfeiting the charter of the ban...
-Chapter III. Legislative Regulation Of Banking. Sec. 37. General Scope Of Power
It has already been stated that the state in the exercise of its legislative power can prohibit private banking altogether.1 A very different question would arise if the state should attempt to abolis...
-Sec. 38. License Taxes
A preliminary question as to a license fee by a municipality will always be whether the power to license has been granted. This is simply a question of statutory construction.1 When a national or sta...
-Sec. 40. Safety Funds And Deposits
The questions that arose under the state laws in the days of wild-cat banking as to the funds deposited to secure circulation are now obsolete. A reference to cases will be found in the notes.1 The ...
-Sec. 41. Requirement Of Reports
Under the national banking act those banking institutions therein provided for are required to make five reports each year, at times to be designated by the comptroller, and special reports as may be ...
-Sec. 42. Bank Examiners
State statutes provide for public bank examiners, who may be given a right of visitation and as well. People v. Walker, 17 N. Y. 502; s. c, 21 Barb. 630; Medill v. Collier, 16 Ohio St. 599. 3 Clark v...
-Sec. 44. Regulation Of National Banks By States
It has already been pointed out that the state governments have no control over national banks except what has been granted to them by the federal government.1 Yet the state government may prohibit ce...
-Sec. 45. State Regulation Of Foreign Banks
It is hardly necessary to state that a state statute as to foreign banks will not affect national banks, which are chartered for the whole nation. A foreign bank is permitted by comity to make a contr...
-Chapter IV. Stockholders. Sec. 46. In General
The subject of stockholders in corporations is so large that no attempt will be made to examine the general subject except as the subject has been peculiarly illustrated by decisions as to banks. It w...
-Sec. 47. Increase Or Decrease Of Stock
The original capital stock cannot be increased or decreased without legislative authority.1 Such authority in case of national banks is given by sections 5142 and 5143 of the Revised Statutes with the...
-Sec. 48. Original Subscription
As a general rule any paper which shows a purpose to subscribe to the stock of a corporation will be binding.1 Whether an oral subscription be valid or not must depend on the provisions of the governi...
-Sec. 49. Stockholders By Transfer
Shares of stock are from their nature alienable, and, subject to the limitations lawfully imposed upon their alienability by law, or by the corporation or by the holder, are transferred by indorsement...
-Sec. 50. Stockholder By Estoppel
It has been said that those persons who hold themselves or allow themselves to be held out as owners of stock are liable whether they own stock or not, and that the rules applying to ownership of na...
-Sec. 51. Executors, Administrators, Guardians And Trustees
As already seen, section 5152, Revised Statutes of the United States, exempts from personal liability as national bank stockholders persons holding stock as executors, administrators, guardians or tru...
-Sec. 52. Right Of Stockholder To Transfer
The right of the stockholder to have a transfer made on the books is absolute, unless the bank has a lawful claim on the shares, or fraud or estoppel. Lucas v. Coe, 86 Fed. R. 973. But see Kerr v. Uri...
-Sec. 53. Unrecorded Transfers
No question causes more difficulty than the effect of a transfer not entered on the bank's stock book, but completed as between the parties by indorsement and delivery of the certificate. In the absen...
-Sec. 54. Bank's Lien On Shares
It is settled that a national bank cannot have a lien upon its own shares for claims against its stockholders.1 But in the case of other banks such a lien is provided for in some cases by the charter ...
-Sec. 56. Prohibition Of Transfers By Agreement
There seems to be authority for the proposition that the corporators or shareholders may agree not to dispose of their stock for a certain time, and that such a contract may be specifically enforced b...
-Sec. 58. Liabilities Of Stockholders
The first and original liability of a stockholder is that upon his stock subscription, to pay the full amount subscribed. But in addition to this liability various statutes have added an additional li...
-Sec. 59. Liability On Stock Subscription
The engagement which a stockholder makes when subscribing for stock is to pay the amount of his stock subscription. This engagement is a contract with the corporation which becomes binding as soon as ...
-Sec. 61. Remedies Upon Stock Subscriptions
The unpaid stock subscription belongs to the corporation, and the method of obtaining the subscription is for the proper authority in the corporation to make a call. If the stockholder does not pay he...
-Sec. 62. Nature Of Statutory Liability For Debts
The various liabilities for debts of the bank created by statute against bank stockholders, whatever the nature of them may be, whether primary or secondary, whether joint or several, have one feature...
-Sec. 63. General Character Of Liability
The statutes are so varied, and the character of the liability established so different, that it is difficult to attain any general rule. But the power of the legislature to impose the liability as to...
-Sec. 64. Joint Or Several Liability
Whether the liability created by these statutes is joint or several has an important bearing upon the remedy to be adopted in order to enforce it. It seems plain that where the statute places no limit...
-Sec. 65. Who Can Enforce Liability
This statutory liability, being imposed for the benefit of creditors, belongs primarily to them.1 Unless it is so provided by statute, impliedly or expressly, the suit upon this statutory liability ca...
-Sec. 66. Who Liable
There is a diversity among the statutes as to those who are liable to respond to this liability. If the statute names the particular class of stockholders who are liable, no difficulty is met. Sometim...
-Sec. 67. Remedy, Whether At Law Or In Equity
This subject is involved in the greatest confusion. It seems extraordinary that courts can reach such totally different conclusions about a simple matter. In the first place, it is conceded that if th...
-Sec. 68. Where Legal Remedy Obtainable
Where an action at law upon the statutory liability can be brought, it may be under a statute which does not require the exhausting of the bank's assets. In such case the remedy consists in suing the ...
-Sec. 69. Suit In Equity
Where the rule is held that the suit to enforce the stockholder's liability must be brought in equity, or wherever such a suit is brought on grounds of convenience, although an action at law lies, the...
-Sec. 70. National Banks
We have already noticed to some extent the remedy applied in the case of national banks. The procedure as to those banks is somewhat simplified by the fact that when the bank is in difficulties it is ...
-Sec. 71. Other Questions As To Liability
There are instances where the existence of the right to enforce the liability is made dependent upon a fact other than insolvency, such, as in the case of national banks, failure to redeem circulating...
-Sec. 72. Dividends
It is not our purpose to examine the whole subject of dividends upon stock, but merely the decisions in bank cases thereon. The power to declare dividends belongs to the board of directors. Their disc...
-Chapter V. Officers And Agents. Article I. - Duties And Liabilities. Sec. 73. In General
A corporation can act only by means of agents. All its officers and employees are agents to do certain acts. A private banker or a partnership or joint-stock company has in practice the same kinds of ...
-Sec. 76. Bonds Of Officers
Where a bond is taken from an officer for the due performance of his duties, and every corporation has such a right (Bank v. Cresson, 12 Serg. & R. 306), the general principles of law governing such i...
-Sec. 77. Salaries
If an officer is not a director his salary is generally fixed by the board of directors, unless the law forbids it.1 If such an officer or an agent is permitted to draw a salary larger than the amount...
-Sec. 78. Board Of Directors
The directors act as a board at meetings either specially called or fixed by the by-laws or general law or charter. Unless it be otherwise provided a notice need not be given of fixed and stated meeti...
-Sec. 79. Liability Of Officers And Agents To Bank
Leaving out of view for the present directors, we may say that the rule governing the responsibility of the officer or agent to the bank is simply an application of the law of principal and agent. If ...
-Sec. 80. Liability To Stockholders
It is everywhere conceded that if an officer or director commits a tort he is responsible to the person injured whether that person is a stockholder or not. But the right of action does not arise beca...
-Sec. 81. Suits By Bank Assignees And Receivers Against Officers
The rights of action which the bank has pass to its assigneel or receiver.2 He, of course, can enforce whatever right the bank could enforce, against both officers and third persons. Even though the s...
-Sec. 82. Statutory Liability Of Officers For Debts
There are some statutes which make officers liable for debts of the corporation. Such a liability is penal in its nature, to some extent, and does not arise out of contract.1 But it will be enforced i...
-Sec. 83. Liability Of Officers To Creditors
We have already examined the liability to creditors established by statute in the last section. We come now to those rights which the creditor, without the aid of a statute, can enforce against the of...
-Sec. 84. Relation Of Officers Of A Corporation To Creditors
Since the officer is merely an agent of the corporation he stands in the same relation to a corporation's creditor that the agent of an individual stands in relation to that individual's creditor, whe...
-Sec. 85. Liability To Creditors For Fraud
When a bank officer makes a false and fraudulent representation to a man, whereby he becomes a creditor of, or a depositor in, a worthless or insolvent bank, and the creditor relies upon that fraudule...
-Sec. 86. Liability Of Officers To Creditors For Negligence And Illegal Acts
A bank officer is a trustee for the bank, and in the performance of that trust may be guilty of violations of the trust that make him responsible to the bank, or those officers whose duty it is to sup...
-Sec. 87. National Banks
In the case of national bank directors it is necessary to keep in mind that there are liabilities created by statute and liabilities that exist independently of any statute. Thus national bank directo...
-Sec. 89. Criminal Liability Of Bank Officers
Certain acts in banking officers are offenses at common law, others are offenses under statutes. Where no common-law offenses exist, as under the United States law and under the criminal and penal cod...
-Sec. 90. Receipt Of Deposits In Insolvent Bank
Where a bank officer fraudulently represents his bank to be solvent and obtains a deposit, his offense has been defined to be the obtaining of money by false pretenses.1 Insolvency under such statutes...
-Sec. 91. Other Offenses
Statutes exist requiring returns to be made by bank officers, and a false return is defined to be perjury. The same offense is a false return in the case of national banks. The return is for the purpo...
-Sec. 92. National Bank Returns
The national banking law requires a return verified by the president or cashier of a national bank and attested by three directors to be made five times a year, and special reports at such other times...
-Sec. 92. National Bank Returns. Continued
4 This is the effect of Graves v. United States, 165 U. S. 323, and United States v. Allis, 73 Fed. R. 165. But United States v. Allen, holds somewhat different language. See 47 Fed. R. 696. 5 Graves...
-Sec. 93. Embezzlement And Misapplication Of Funds
The statute directed against the embezzlement, abstraction or wilful misapplication of the funds of a national bank by its officers creates three distinct offenses,1 which cannot be mingled in one cou...
-Article II. - Representation Of Bank By Its Officers. Sec. 95. The General Principle
The law relating to the powers of bank officers, or indeed any corporate officers, is but a development of the law of principal and agent The rule is that the agent can bind his principal in regard to...
-Sec. 96. General Scope Of Authority
The officers of a bank are held out to the public as having the general power to bind the bank according to the powers of the office as fixed by the general law and by the charter or the instrument th...
-Sec. 07. Board Of Directors
A board of directors is not an adjunct of a private bank, unless it be a joint-stock company, but sometimes a private bank has what is called a discount or loan committee. A board of directors, it has...
-Sec. 98. President
The president is one of the general executive officers of a bank, but in the case of banking presidents a very restrictive rule is put upon their powers. It is agreed that he has the power to control ...
-Sec. 100. Cashier
The cashier is the general executive officer of the bank. He is the general agent of the bank in dealing with its customers, and the general rule resulting from his situation is that his contractual a...
-Sec. 101. Treasurer Of Savings Bank And Other General Agents
The treasurer of a savings association is an officer with general powers analogous to the cashier's powers in a bank. A suit instituted on behalf of the savings association by its treasurer is presume...
-Sec. 102. Tellers And Book-Keepers
In banks where one teller acts at both the receiving and the paying counter, there can be no discrimination between the paying and the receiving teller, but in many banks the two functions are in sepa...
-Sec. 103. Place Of Acting
Every bank has a well-known place of business, and, as a general rule, any act done by an agent, unless specially authorized or ratified by the bank, away from the place of business, ought not to be b...
-Sec. 104. Surrendering The Bank's Rights
There are certain cases which use language to the effect that the officers of the bank have not the right to surrender the rights of the bank on a note by statements made at the making of it. But this...
-Sec. 105. Special Course Of Dealing
Although the apparent scope of the authority of bank officers is as stated in the preceding section, that apparent authority may be greater owing to the fact that the governing authority in the corpor...
-Sec. 106. Officer Agent For Another
When the officer of a bank in a particular transaction acts as agent or trustee for another, and also as agent for the bank, the question involved is more frequently one of notice than of power in the...
-Sec. 107. Officer Acting About His Private Affairs
An officer of a bank has no right to use the bank or its funds for his private advantage, and, as we shall see in the next section, any person who has knowledge of such a fact can claim nothing agains...
-Sec. 108. Bona Fide Third Parties
In the case of commercial paper or other property of the bank, whenever it comes into the hands of a third party who had no notice of the corporate officer's lack of authority, and who is a holder for...
-Sec. 109. Ratification
The bank may ratify an act which it could have authorized, and even those acts, which are ultra vires in the sense of being merely beyond the corporate power,1 it may ratify. This ratification may be ...
-Sec. 110. Admissions Of Bank Officers
The general rule is that the admission of an agent while he is acting within the scope of his authority and in regard to a matter then depending, or, as it is expressed, dum fervet opus, is binding up...
-Sec. 111. Notice To A Bank
This question is frequently of controlling importance in the law of banking, because much of the bank's business consists of dealings with negotiable instruments, or collateral deposited as security. ...
-Sec. 111. Notice To A Bank. Continued
8 First Nat. Bank v. Christopher, 40 N. J. Law, 435; Farmers' Bank v. Payne, 25 Conn. 444; Shaw v. Clark, 49 Mich. 384; Mercer v. Ca-nonge, 8 La. Ann. 37. 9 Bank of U. S. v. Davis, 2 Hill, 452; Natio...
-Sec. 112. Agent With Adverse Interest
We have already discussed the question of the bearing of the agent's adverse interest in another transaction wherein he acquired knowledge which is sought to be imputed to a bank in a transaction wher...
-Sec. 112. Agent With Adverse Interest. Continued
27 Atlantic Cotton Mills v. Indian Orchard Mitts, 147 Mass. 268. 28 Le Due v. Moore, 111 N. C. 516. See notes 3, 8 and 9, Sec. 106, supra. But perhaps these cases are better authorities upon the prop...
-Chapter VI. Dealings Of Banks. Article I. - Influence Of Customs. Sec. 113. In General
There is no branch of business, unless it be shipping, where customs and usages cut so large a figure as in banking. In a former chapter the influence of usage in determining the duties of the various...
-Sec. 115. Usage Must Be Uniform, Certain And General
It is said that a usage must be general; that one instance does not make a usage.1 This means that a usage must be uniform and certain, and uniformly acted upon.2. But it may very well be that the usa...
-Sec. 116. Usage Must Be Reasonable
There is a saying ascribed to a noted political thinker that man is a reasoning and not a reasonable animal. The fact that banks have sometimes tried to insist upon customs which are not reasonable ...
-Sec. 117. Usage Must Be Known
Even if a usage be lawful, reasonable and uniform, it does not necessarily bind any one, unless it can be shown that the party sought to be charged with notice of the usage dealt with reference to it....
-Article II. - Banking Powers. Sec. 118. In General
The various functions of a bank are largely a matter of usage as established by judicial decision. The matters of deposit, discount and issue will be treated under appropriate heads. But there are yet...
-Sec. 119. Dealing In Its Own Stock
A bank may purchase its own shares unless the statute expressly or by implication forbids it,1 but of course if the act is expressly or impliedly forbidden .by its charter or by a governing statute it...
-Sec. 120. Purchasing Stock Of Corporations
A banking corporation has not the right to become a stockholder in another corporation,1 unless the act is made necessary to preserve a security2 which it has taken in a banking transaction, or unless...
-Sec. 121. Other Mercantile And Banking Transactions
It is perhaps needless to say that a bank cannot buy and sell merchandise,1 but it may under peculiar circumstances have a single transaction of purchase,2 and it may take charge of a, shipment of goo...
-Sec. 122. Dealings In Real Estate
The general rule applicable to all banking institutions which are incorporated is that they can acquire land only as permitted by their charters or governing statutes.1 They have the power to acquire ...
-Sec. 123. Dealings In Mortgages On Realty
Where there is no statute either expressly or impliedly forbidding the acquisition by a bank of real-estate security, there can be no objection to such a dealing by the bank.1 This right would include...
-Sec. 125. Borrowing Money
A bank with general banking powers may undoubtedly borrow money,1 but sometimes the statute forbids the borrowing of money payable at a future day certain.2 A national bank may borrow money in order t...
-Sec. 126. Lending Of Credit
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 ...
-Sec. 127. Collections
Since a bank, as one of its ordinary powers, has the right to receive paper for collection, it can be held liable for its neglects in performing that function.1 There would seem to be no good reason w...
-Chapter VII. Deposits. Sec. 128. Nature Of Relation
When a man makes a general deposit in a bank the relation that exists between the bank and him, as a depositor, has not been accurately defined. It is settled that the relation is one of debtor and cr...
-Sec. 129. Kinds Of Deposits
Deposits are either general or special. A special deposit may be of something else than money. Its characteristic feature is that title to the thing does not pass to the bank, except as bailee. We ar...
-Sec. 130. General Depositor's Rights
A general deposit of money in a bank creates a debt from the bank to the depositor. The money becomes the banker's to use as he can.1 Whether interest be paid or not,2 whether the deposit be on an ope...
-Sec. 131. When The Deposit Is Made
Where money is deposited the deposit dates from the time the deposit is entered in the pass-book,1 or where not entered there when received whenever the duplicate deposit slip is delivered to the depo...
-Sec. 133. Deposit Of Other Things Than Money
Where a man goes to a bank and deposits in it checks or drafts or other paper, the transaction may take different forms. The bank may purchase the paper. If it does, the transaction does not become a ...
-Sec. 134. Ownership Of Deposit
The natural presumption is that money deposited to the credit of a depositor by himself belongs to that depositor, and in reason the bank need only look to the apparent owner of the fund. If it pays t...
-Sec. 135. Trust Or Partnership Funds
Where trust funds are so deposited that the bank is not chargeable with notice that they are trust funds, it is able to give credit upon them to the depositor, and is not liable for paying them out, a...
-Sec. 136. Liability Of Bank As To Trust Funds
Trust funds are those which are credited in the bank to some person in a trust capacity, such as agent or trustee, or funds that are in fact either actually or beneficially the property of some one el...
-Sec. 137. Attachment And Garnishment Of Deposits
A 14 Mayer v. Chattanooga Bank, 51 Ga. 325. 15 Brockmeyer v. Washington Nat. Bank, 40 Kan. 744; Trustees v. Pace, 15 Ga. 486; Mayer v. Chattanooga Nat. Bank, 51 Ga. 325, citing four English cases. ...
-Sec. 138. Death Of Depositor
We have already examined the cases as to ownership of a deposit caused by a voluntary transfer or assignment, and those caused by a transfer by act of the law upon garnishment or other legal proceedin...
-Sec. 138. Death Of Depositor. Continued
9 Illinois, Kentucky, Nebraska, South Carolina, and perhaps Texas, hold the rule. Missouri and Iowa have repudiated it. Louisiana has decisions both ways. See Sec. 147, post 10 Bank of Antigo v. Unio...
-Sec. 139. Insolvency Of Depositor
The effect of an assignment for the benefit of creditors by the depositor is to transfer the deposit as any assignment would transfer it. The right of the bank to appropriate the depositor's account w...
-Sec. 140. Bank Applying Deposit To Its Own Claim
It is a recognized principle in banking law that a bank has the right to apply the general deposit of the depositor to the payment of the bank's unsecured claims against the depositor. The nature of ...
-Sec. 141. Duty Of Bank To Apply Deposit
It is a well-known principle of law that any dealing between the creditor and the principal debtor - and one case holds any concealment of a relation between the creditor and the principal debtor1 - p...
-Sec. 142. Right Of Bank To Apply Deposit On Other Demands
If a note be made payable at a bank, it has been said, without good reason, that the bank has no authority to pay it out of the maker's deposit without a direction to do so.1 But this rule is subject ...
-Sec. 143. Payment By The Bank Of Deposit
The duty of the bank to its depositor is in some way to make payment. We have indicated certain methods by which this is done, as, for instance, by payment to the true owner, by payment to the assign...
-Sec. 144. Liability To Depositor For Set-Off
The right of set-off between the bank and its depositor is reciprocal. The depositor has a right of set-off against the bank for his deposit against the bank's claim,1 or for any other direct and asce...
-Sec. 145. Liability To Drawer For Dishonoring Check
As to the drawer, where a bank dishonors his check while funds are deposited to his credit sufficient to meet the check, the remedy is twofold. He may immediately sue for the deposit,1 because the che...
-Sec. 146. Liability Of Bank To Holder
Since the check is a mere order on the banker, the holder acquires no right against the bank until the check has been accepted or certified by the bank. Certification is, of course, an acceptance, but...
-Sec. 146. Liability Of Bank To Holder. Continued
18 Since it is not a suit for negligence the answer ought to be no. 19 Am. Ex. Nat. Bank v. Gregg, 138 I11. 596, reversing 37 III App. 425. 20 Kavanagh v. Farmers' Bank, 59 Mo. App. 540. 21 Citizen...
-Sec. 147. Rule In Some States
Yet in spite of the great weight of authority, the usage of the commercial world, the necessities of business, the convenience of banking transactions and the dictates of common sense, as settled by t...
-Sec. 147. Rule In Some States. Continued
28 Nat Bank v. Ward, 100 U. S. 195. 29McCornick v. Western Union Tel. Co., 79 Fed. R. 449. 30 The course of Illinois decisions is an excellent illustration of the fact that the disregard of a sound ...
-Sec. 148. Order Of Payment Of Checks
It is a part of the duty of banks, which some courts mistakenly call an implied contract,1 to pay the checks of a depositor in the order in which they are presented.2 If checks are presented at the sa...
-Sec. 150. Accepted And Certified Checks
By common consent and the usage of the commercial world, the certification of a check, or the acceptance of it by the bank at the instance of the payee, discharges the drawer of the check and substitu...
-Sec. 150. Accepted And Certified Checks. Continued
5 Bullard v. Randall, 1 Gray, 605. 1 Coates v. Preston, 105 111. 470; Lowenstein v. Bressler, 109 Ala. 326; Eichelberger v. Finley, 7 Har. & J. 381; In Matter of Brown, 2 Story, 519. Contra, Bromley ...
-Sec. 151. Fictitious Payees
The general rule is that a check payable to a fictitious payee is payable to bearer; but if a real person is intended by the name of the payee, the check must be indorsed by that person or by some one...
-Sec. 152. Bate Upon Checks
It is said by a text writer that if a check is not dated it is never payable,1 but the law is that such a check may be filled in with the true date, or if not filled in is payable upon demand, so far ...
-Sec. 153. Revocation Of Check
The cases where checks have been in effect revoked by an assignment of the deposit, or by the garnishment of the deposit, or by the death or insolvency of the depositor, or by the bank's application o...
-Sec. 154. Forged Or Altered Paper
Forgery may consist of a forgery or alteration in the body of a check really signed by the depositor, or it may consist of the simulation of the depositor's signature, or it may be that the name of a ...
-Sec. 154. Forged Or Altered Paper. Continued
14 to Sec. 363, post requires that the antecedent negligence of the depositor should be considered immaterial. 14 Leather Manuf. Bank v. Morgan, 117 U. S. 96; Janin v. London Bank, 92 Cal. 14; Dana v...
-Sec. 155. Forged Paper As Between Banks
The rule that payment by a bank of a check drawn on itself, where the drawer's name is forged, does not obtain as between banks. The rule is said to be by courts of not the highest authority that the ...
-Sec. 156. Lost Or Stolen Checks Or Certificates
The bank takes the risk as to the ownership of stolen or lost paper not negotiable. If it pay such paper upon forged indorsements is negotiable, and a bona fide holder thereof has a good title, even t...
-Sec. 157. Overpayment And Wrongful Payment
If a bank overpays a check it may recover from the person to whom it paid.1 If the bank pays the check to the wrong person, that is to say, a person who cannot claim that he had any authority to recei...
-Sec. 158. Effect Of Payment
In all cases where a bank pays a genuine check drawn upon itself to the person entitled thereto1 (except in the single case of another bank2), but not is not final Merchants' Nat. Bank v. National Eag...
-Sec. 159. Liability Of The Bank For Interest
A general deposit in a bank, except by agreement, does not draw interest, general deposits being always subject to check.1 A certificate of deposit does not draw interest,2 and no liability is imposed...
-Sec. 160. Overdrafts
In connection with the criminal liability of officers, we have already discussed to some extent the question of overdraft.1 In connection with the bank's right to refuse payment of a check, the questi...
-Sec. 161. Certificates Of Deposit
The power of a bank to issue certificates of deposit is a part of the power to carry on a banking business. Therefore national banks have power to issue certificates of deposit payable either upon dem...
-Sec. 162. Special Deposits
The words specialdeposit are used in the cases in two senses - one, as a deposit for safekeeping; the other, as a deposit for a particular purpose. The latter kind of a deposit has been already noti...
-Sec. 163. When Special Deposit Created
A special deposit is created, in addition to the cases stated in the preceding section, whenever a particular thing is delivered to a bank to be returned in corpore upon demand.1 But if a note is mere...
-Sec. 164. Liability Of Bank Upon Special Deposit
The relation of the bank to its special depositor is that of bailee.1 Whether it is a gratuitous bailment or one for hire depends upon circumstances. Since, by the very definition of the word special...
-Sec. 166. Actions Upon Deposits
No right of action accrues upon a general deposit until a demand has been made,1 unless on account of circumstances no demand is required.2 Thus, if the contract was illegal whereby the deposit was re...
-Sec. 167. Who May Maintain Action
If the deposit is in the name of the real owner, he, of course, may sue or his assignee. If the depositor is dead, the personal representative should sue. It seems that the true owner of the deposit m...
-Sec. 168. Bank's Rights When Sued
Wherever conflicting claims are made upon the bank by different persons, the bank has the undoubted right to compel the parties to interplead and relieve it of the necessity of contending with either....
-Sec. 169. Limitations Upon Actions For Deposits
Various rules have been laid down as to when the statute of limitations will begin to run upon a deposit. Under some statutes there is no limitation.1 In another state the pass-book is held to be an e...
-Sec. 170. Presumptions And Burden Of Proof
Wherever the fact of a deposit appears, the burden is on the bank to prove payment;1 although, if the depositor retains his passbook for a time without objection, the burden is upon him to show a mist...
-Chapter VIII. Collection. Sec. 171. The Nature Of The Relation
The deposit of paper with a banker for collection creates a relation which has generally been defined as that of principal and agent. But an accurate use of language requires something other than such...
-Sec. 172. What Law Governs
Where the duty of collection is to be wholly performed in one state where both the owner of the collection and the bank reside, the relation is to be governed by the law of that state; but where a ban...
-Sec. 173. Collection To Be Made At Bank
Where a note or other security is made payable at a bank, the bank is not thereby made the agent of the payee or holder to receive payment,1 and any payment which it receives from the maker on such a ...
-Sec. 174. Revocation Of The Power To Collect
The collecting bank receives a certain power over the collection when it receives it. On the analogy of an agency, the holder may revoke the power, if the bank has not acquired a lien upon the proceed...
-Sec. 175. Bank-Lien Upon Collections
The bank has its customary lien upon a collection left with it or the proceeds for any debt that is matured owing by the owner of the paper to the bank unless there be a special agreement not consiste...
-Sec. 176. Authority Of The Collecting Bank
As a general rule the collecting bank cannot take anything else than money in payment of a collection except by agreement with the apparent owner.1 If it take anything else than money, such as a certi...
-Sec. 177. Liability Of The Bank In Making Collection
The bank may incur a liability to the person from whom it collects. For example, a bank collected the amount of a note from the maker and delivered to him the wrong note, returning the right note to t...
-Sec. 178. When Collection Complete
As we have heretofore seen,1 the collection does not become complete until the collection is made by the bank crediting to the owner the money realized as so much cash.2 This result may be arrived at ...
-Sec. 179. Liability Of The Bank For Failure
The collecting bank may be the bank upon which the paper is drawn or another bank. The duties of the banks in such cases are not wholly similar. The collecting bank may itself collect the paper or may...
-Sec. 180, Liability For Its Own Negligence
The general law applicable to presentment for acceptance and payment, demand, notice of non-payment and protest will be assumed for the present. The matter will be found fully considered under the hea...
-Sec. 181. Liability For Correspondent Bank
It is a practice so universal that any one must be held to know it, that a bank will employ another bank to make collections at a distance. But the legal relations that result are matters upon which c...
-Sec. 182. Liability Of Bank For Notary
If the deposit of paper for collection in a bank is a bailment, it follows necessarily that the default of the notary to which the bank confides the performance of some duty concerning the paper for t...
-Sec. 183. Waiver Of Negligence
Where the collecting bank or one of its agents, where it is held liable for the acts of its agents, has been guilty of negligence or of improper conduct in the making of the collection, the owner may ...
-Sec. 184. Actions For Negligence
The bank of primary collection in the states which recognize its liability for the acts of its correspondent banks may maintain an action against the last-named bank for negligence,1 but the holder of...
-Sec. 185. Matters Of Proof
Where the negligence complained of consists in a loss of the paper in transmitting it, the burden is upon the bank to show that the loss happened without its fault.1 There arises, upon the fact being ...
-Sec. 186. Measure Of Recovery
Where paper is a total loss the measure of recovery would be the face value of the paper where there was no proof of the insolvency of the maker and of the other parties liable upon it.1 The same rule...
-Sec. 187. Rights In Proceeds
It is apparent that this question may take different phases. First, we may consider the question as between the owner and the bank to which he consigns the paper for collection. This bank, for want of...
-Sec. 188. The Rights Of The Owner Of Collection
As we have heretofore said,1 the deposit of paper for collection in a bank creates the relation between the banker and customer of bailor and bailee. It is submitted that this is the only relation tha...
-Sec. 188. The Rights Of The Owner Of Collection. Continued
6 First Nat. Bank v. Bank of Monroe, 33 Fed. R. 408; Evansville Bank v. Germ. Am. Bank, 155 U. S. 556. It is held that an indorsement for collection and credit does not pass title to the bank, even th...
-Sec. 189. Rights To Proceeds As Between Banks
Where the paper is notice that it was indorsed for collection,1 or where the correspondent bank has other notice of the fact,2 the correspondent bank can retain no portion of the proceeds as against t...
-Sec. 190. Insolvency As Affecting Proceeds
As we have already seen, the insolvency of a bank revokes its power as to a collection.1 The principle applies also as between banks which are in correspondence as to a collection in remitting the pro...
-Chapter IX. Loans And Discounts. Sec. 191. Validity Of Loan
Unless something in the law or the charter forbids it, a bank may loan either upon personal1 or real-estate security.2 There have been in certain states banking schemes which compelled the bank to mak...
-Sec. 192. Collaterals
Whether a note taken for a loan be legal or illegal, the loan itself being a good ground of recovery the collaterals therefor may be enforced.1 It makes little difference in the result upon what princ...
-Sec. 194. Charging Of Interest
In the absence of other statutory provisions, banks are governed by the laws as to the charging of interest which are applicable to individuals.1 But a different rate may be fixed by the charter of th...
-Sec. 195. What Law Governs
The law which governs the performance of the contract determines the lawfulness of the rate.1 Thus, a note made payable in Illinois, though signed in Tennessee, is an Illinois contract where it was to...
-Sec. 196. What Constitutes Usury
Sometimes the statutes against usury apply only to discounts of the bank 1 and sometimes the statute applies to loans of money.2 In either case, however the transaction is disguised, if it amounts to ...
-Sec. 197. Effect Of Usury
The transaction which is usurious is necessarily an illegal agreement. If the illegal agreement has been consummated and the parties are in pari delicto, no recovery of the usurious interest paid woul...
-Sec. 198. Effect Of Usury Under The National Bank Act
The national bank act is exclusive in its terms. It declares the whole interest void1 if it be not paid, and it allows a recovery of twice the excess or the whole interest2 paid where Nat. Bank v. Mi...
-Sec. 199. Who May Set Up Usury
Generally speaking only the parties to a usurious transaction are affected by it. It is not a defense for the drawer of a bill of exchange against the bank;1 but under the national banking law the res...
-Sec. 200. Matters Of Pleading And Procedure
The charge of usury must always be that the act was done knowingly,1 but a corrupt intent need not be averred in the answer if facts equivalent thereto are pleaded.2 The person to set up the usury mus...
-Sec. 201. Rights And Liabilities Of Bank In Discounting
If a bank discounts a note, where the discounting was induced by fraud, it may rescind it;1 and even where no fraud appeared it was held that a discount could be revoked, though unpresented checks had...
-Sec. 202. Payment Of Loans
Where all kinds of money are equally good, the payment of a loan from a bank is a simple matter if the debtor can control any kind of money. Whether the bank-notes of national banks, or treasury notes...
-Chapter X. Exchanges, Securities And Collectible Paper. Article I. - Exchanges And Securities. Sec. 203. Power And Liabilities As To Exchanges And Securities
In a former sectionl we have noticed the general powers of a bank in dealing in negotiable paper and securities. It has the prima facie power to purchase bills of exchange2 at the place where it is au...
-Sec. 204. Forged Paper
In a former section referring to depositsl was stated the rule as to the payment of forged paper that obtains between banks. The payment of exchanges is practically governed by these rules. If the acc...
-Article II. - Acceptance. Sec. 205. Collectible Paper
In former sections (179 etsetf.) was discussed the liability of a bank or banker for failure to take proper steps in making a collection intrusted to the bank. It is the purpose of the author now to d...
-Sec. 206. Paper Requiring Presentment For Acceptance
The instruments which require presentment for acceptance in order to hold certain parties upon them are classed under the head of bills of exchange; but not all bills of exchange need presentment for ...
-Sec. 207. Paper Which Is Not A Bill Of Exchange
As before stated, checks in the ordinary form payable upon demand are not bills of exchange,1 nor are orders payable out of a particular fund,2 even though they have been accepted;3 8Minturn v. Fishe...
-Sec. 208. Paper Not Requiring Presentment For Acceptance
Certain forms of bills of exchange are considered as accepted by the form of them. Thus, a bill by one partner upon his firm drawn in regard to a partnership transaction is the accepted bill of the fi...
-Sec. 209. Waiver Of Acceptance
The instances specified in the foregoing section may be considered as cases where an acceptance was waived as to the drawer by act of the drawer. There are other instances where the drawer waives an a...
-Sec. 210, What Law Governs Acceptance
Since the rule in different jurisdictions varies under statutory enactments as to the form of an acceptance, it becomes a matter of some importance to ascertain what law governs the contract of accept...
-Sec. 211. Sufficiency Of Presentment For Acceptance
The bill should be presented by the holder or his agent to the drawee personally, or to some one designated by him, and a diligent attempt should be made to find him.1 But a presentment at the place o...
-Sec. 212. Written Acceptances
Various statutes require acceptances to be in writing and unconditional.1 Acceptances of checks are held to be. within the terms of these statutes.2 Under these statutes, and a fortiori where there is...
-Sec. 213. Oral Acceptances
Where no statute requires an acceptance to be in writing it is well settled that an oral acceptance is sufficient.1 Such an acceptance may be considered as made by words or by conduct. Acceptances by ...
-Sec. 214. Implied Acceptances
Where conduct of the drawee is relied upon as an acceptance, it must be in a jurisdiction where oral acceptances are valid.1 The acts of the acceptor may be proven just as his words may be proven.2 Me...
-Sec. 215. Promises To Accept And Letters Of Credit
Promises to accept a bill or order or check before it is drawn may arise either from an actual promise, oral or written, or from an authority given to draw the bill. Each instance may be considered as...
-Sec. 216. Sufficiency Of Authority Or Promise
The existence of the promise or authority will be a matter to be proven by evidence and inference from circumstances,1 and may be proven by any competent evidence, such as an admission of the party2 o...
-Sec. 217. Construction Of The Promise Or Authority
A promise to accept drafts drawn against shipments is necessarily conditional upon the shipment or bill of lading accompanying the draft;1 but such a promise is an acceptance of drafts accompanied by ...
-Sec. 218. Promise As To Existing Bill
A promise to accept an existing bill is a collateral promise as to any one who has already taken the bill, and should be founded upon a new consideration.1 To any one who upon the faith of the promise...
-Sec. 220. Conformity Of Bill To Promise Or Authority
Promises to accept drafts or orders are considered somewhat in the light of contracts of guaranty, and the promise or the authority must be strictly followed.1 Any material departure from the terms of...
-Sec. 221. Revocation Of Authority Or Promise
The authority may be considered as revoked by a failure to act upon it within a reasonable time, or by a failure to conform to the terms of the authority. It may be considered revoked by a refusal to ...
-Sec. 222. Defenses To Promise To Accept
The situation of the accounts between the drawer and drawee,1 or an abuse of the confidence of the drawee,2 or a failure on the part of the drawer to carry out his contract with the drawee,3 or a clos...
-Sec. 223. Revocation Of Acceptance Made
An acceptance once made in writing cannot be revoked after delivery of the acceptance to the holder, unless the holder was in some way a party to an imposition upon the acceptor.1 It would seem to fol...
-Sec. 224. Necessity Of Acceptance As To Drawee
Until a bill of exchange is accepted by the drawee, no obligation to pay it as a party to the bill exists upon the drawee's part,1 unless the acceptor waives acceptance, which he may do by parol;2 nor...
-Sec. 225. Effect Of Non-Acceptance
If acceptance of a bill of exchange be refused, whether it should be protested or not depends at common law on whether it is an inland or a foreign bill. This subject will be discussed under a later s...
-Sec. 226. Effect Of Acceptance
The absolute acceptance of the draft or order renders the acceptor the principal debtor upon the instrument 1 and obligates the acceptor to pay the amount according to the tenor and effect of the inst...
-Sec. 227. Admissions By Acceptance
The acceptance of the drawee is, nothing further appearing, an admission that the drawee has funds of the drawer to the amount of the bill.1 As to the holder this presumption from the admission is abs...
-Sec. 228. Liabilities And Rights Of Acceptor
Since, as we have seen, the acceptor becomes the principal debtor, the presumption is that the acceptor had funds of the drawer,1 and if the accepted bill be protested for non-payment the drawer may r...
-Sec. 220. Conditional And Variant Acceptances
A conditional acceptance is an absolute acceptance of a conditional order or a conditional acceptance of an absolute order. Of the first sort are acceptances of orders payable out of a particular fund...
-Sec. 230. Discharge Of Parties To Accepted Bill
A bill of exchange differs from a checkl in this, among other things, that an absolute acceptance of it does not release the drawer or indorser; they remain liable secondarily to the acceptor. But in ...
-Article III. - Demand. Sec. 231. Presentment For Payment - What Law Governs
Under the settled rules of law the presentation of commercial paper for payment, the demand of payment, and the notice of non-payment are governed by the law of that place where the paper is payable,1...
-Sec. 232. Acceptance Supra Protest
In days when instantaneous communication by telegraph was not possible, an acceptance supra protest was of far more importance than it is to-day. If a bill were dishonored and the drawer could be reac...
-Sec. 233. Presentment For Payment Of Accepted Or Non-Accepted Bills
A bill that has been accepted must none the less be presented for payment,1 except as to the acceptor. There is an apparent exception, however, in the fact that an acceptance may be made payable at a ...
-Sec. 234. Parties Entitled To Require Demand Of Payment
The various kinds of instruments that this question may arise in regard to are bills of exchange, checks, promissory notes and non-negotiable orders. The parties to bills of exchange entitled to deman...
-Sec. 235. Drawer And Indorser Of Bill
The drawer or indorser of a bill of exchange contracts that he will pay the amount of the bill, if the bill be duly presented by the holder for acceptance (if it requires it) and for payment, and if d...
-Sec. 236. Accommodation Parties To Bills
The word accommodation presupposes two persons, - one who accommodates and another who is accommodated. An accommodation drawer, that is to say, one who lends his name for accommodation, and the acc...
-Sec. 237. Drawer And Indorser Of Checks
A check being payable upon demand, the drawer, if he had funds in the bank, and the indorser are entitled to have demand of payment made within a reasonable time; such is the law.1 But the consequence...
-Sec. 238. Maker Of Note Or Acceptor Of Bill
The maker of a promissory note stands in the same position as the acceptor of a bill of exchange. A failure to demand payment of the note does not prejudice him in any way. His engagement is to pay th...
-Sec. 239. Indorser Of Note
The regular indorser of a negotiable promissory note is entitled to have a demand of payment made upon the maker by the holder at the date of the legal maturity of the note, whatever that may be,1 unl...
-Sec. 240. Accommodation Parties To Notes
The accommodation maker of a promissory note, though known to be such to the holder, is nevertheless responsible as maker to the holder.1 He certainly cannot claim any demand upon the party whom he ac...
-Sec. 241. Guarantors Of Bills Or Notes
A guaranty of a negotiable instrument may result from an actual contract of guaranty upon the bill or in a separate written agreement,1 or may result from the relation of a party to the bill. The actu...
-Sec. 242. Parties To Non-Negotiable Instruments
The great weight of authority is that the drawer or assignor or the indorser, so called, of a non-negotiable instrument is not entitled to have a demand made upon the drawee;1 but if the instrument is...
-Sec. 243. Parties To Certificates Of Deposit
Courts have spoken of certificates of deposit as the promissory notes of the bank issuing them, and apparently upon that theory it has been held that being, if payable upon demand, demand notes, as to...
-Sec. 244. Forged, Stolen And Yoid Paper
If the paper be forged and therefore a nullity, nothing whatever passed from the indorser to the indorsee, and therefore no demand of payment of the paper, or of acceptance where that is required, nee...
-Sec. 245. Sufficiency Of The Demand
The question as to whether a demand of payment has been made depends, of course, upon whether a proper demand has been made, and this must be determined with reference to the person who makes the dema...
-Sec. 246. Person To Make Demand On Foreign Bills
Since a foreign bill of exchange must be protested if not paid, the demand, unless there be no anticipation of a refusal of acceptance or of payment, should be made by a notary public.1 The notary pub...
-Sec. 247. By Whom Demand Made On Domestic Paper
Domestic paper, which includes everything requiring a demand of payment, such as promissory notes, checks, orders or certificates of deposit, does not require a notarial demand unless a statute so pro...
-Sec. 248. On Whom Demand To Be Made
The general statement of the rule for making a demand upon the obligor upon commercial paper, where a demand is required, is that the demand should be made upon the drawee or maker, or upon his agent ...
-Sec. 249. Manner Of Presentation For Payment
Subject to certain qualifications which will appear under the head of demand upon paper payable at a particular place, the general rule unquestionably is that a demand must be accompanied by the instr...
-Sec. 250. Hoar Of Demand
The consideration as to the proper time in which to make a demand involves two branches: first, the proper hour at which to make a demand; and second, the proper day on which to make a demand. 11 Car...
-Sec. 251. Time Of Demand Upon Bills Of Exchange
Bills of exchange may be drawn payable on demand or at sight, or so many days after sight, or upon a fixed day. As we have seen, a bill payable so many days after sight,1 and a bill payable at sight,2...
-Sec. 252. Time Of Demand Upon Notes
A promissory note differs from a bill of exchange in the fact that it is always payable either at a fixed day or upon demand, and notes payable at a fixed day are like bills so made payable. Promissor...
-Sec. 253. Paper Indorsed Overdue
Special attention must be given to a note or bill indorsed after its maturity, in which case the paper becomes ordinary demand paper. If the note has not been presented for payment at maturity, the in...
-Sec. 254. Demand Upon Checks
A check being an order payable upon demand and negotiable should be treated as to demand as a demand draft. Generally speaking, a check therefore resembles a demand draft, but business convenience has...
-Sec. 254. Demand Upon Checks. Continued
Burked, 48 Mich. 241, and Marbourg v. Brinkman, 23 Mo. App. 511, deny the rule as to prompt demand as to bank checks. The rule ought to be, as to bank checks or certified checks, that, if they are act...
-Sec. 255. Demand Upon Bank Checks And Certified Checks
Bank checks are sometimes considered as drafts, but they are in fact checks.1 No reason can be seen why a bank as well as any other depositor cannot draw a check upon a bank where it has money deposit...
-Sec. 256. Holidays And Sundays
If an instrument be entitled to days of grace, and the last day of grace falls upon Sunday or a holiday, demand should be made upon Saturday, which would be the second day of grace;1 but if that 1 Se...
-Sec. 257. Time Of Demand As Affected By Sickness Or Death Of Party
The time of demand upon negotiable paper may be affected either by the death of the holder or the death of the obligor upon whom demand is to be made. The death of the holder excuses a presentment unt...
-Sec. 258. Demand Where Place Stipulated
The paper may be made payable at a particular place by being expressly made so payable either in the paper or by parol agreement, and by naming a particular place, in the case of a bill of exchange, f...
-Sec. 258. Demand Where Place Stipulated. Continued
7 Goodloe v. Godley, 13 Smedes & M. 233; Woodin v. Foster, 16 Barb, 146. 8 Bank of U. S. v. Carneal, 2 Pet. 543; Eason v. Isbell, 42 Ala, 456; Townsend v. Heer Dry Goods Co., 85 Mo. 503; Guignon v. ...
-Sec. 259. Bern And Where No Place Stipulated
Where the paper itself does not provide for the place of its presentation, as explained in the preceding section, the general rule is that the demand must be a personal demand. This personal service o...
-Sec. 260. Demand Where Residence Or Place Of Business Unknown
If the person sought for is not known to the holder to have a residence or place of business, various contingencies may arise. Thus, the city or town where he resides may be known or it may not be kno...
-Sec. 261. Customs And Usages Upon Demand
General business customs of notoriety are presumed to be known to the business community.1 Such a custom not to do business on particular days has made Harvard commencement day a holiday in a portion ...
-Sec. 262. Excuses For Failure To Make Demand
We have already considered the excuse of ignorance of the address of the person to whom presentment for payment is to be made as a defense, when due diligence has been used in searching for the addres...
-Sec. 263. Insolvency Of Maker Or Drawee
The rule is settled that although the maker of a note has become absolutely and notoriously insolvent, a demand must be made upon him for the payment of the note.1 This rule seems to be supported by n...
-Sec. 264. Failure To Provide Funds
A man who draws a bill of exchange upon another without any authority to do so, without any reasonable expectation that his draft will be honored, certainly cannot have the hardihood to pretend that h...
-Sec. 265. Change Of Residence
If the maker of a note or the drawee or acceptor of a bill changes his residence after the note is made or the bill is drawn or accepted, what must be done by the holder depends upon the place to whic...
-Sec. 266. Absconding Of Maker Or Drawee
Where the maker of the note absconds before the maturity of the note,1 or where the drawee of a bill absconds,2 or where the acceptor absconds,3 no demand is necessary upon him unless the paper is pay...
-Sec. 267. Pestilence And Disease
The prevalence of a malignant disease or of a pestilence that suspends the functions of commerce ought to be an excuse for a failure to make a demand upon the person to be charged, if the pestilence p...
-Sec. 268. War And Interdiction Of Intercourse
The existence of a state of war between the country of the maker of a note or the drawee of a bill and that of the holder, or the interdiction of commercial intercourse between the places where the ho...
-Article IV. - Notice Of Non-Payment. Sec. 269. Notice Of Dishonor In General
Where a demand has been made upon a promissory note or due diligence has been used in trying to make a demand, and the note has not been paid, or where a bill of exchange or a check has been presented...
-Sec. 270. Form And Recitals Of The Notice
The notice may be either oral or written.1 This is true even as to the notice of dishonor upon a foreign bill;2 and a copy of the certificate of protest, either upon non-acceptance or non-payment, nee...
-Sec. 271. Mode Of Serving Notice
The methods of giving notice are by personal service, either actual or constructive, corresponding to an actual or constructive personal demand, by service at a place designated as the place of servin...
-Sec. 272. When Service By Mail Permitted
The propriety of a service by mail is dependent upon the residence of the parties. It is allowable in all cases, except when the party giving the notice and the one receiving the notice reside in the ...
-Sec. 273. Sufficiency Of Mailing
If notice by mail be permissible, a proper notice, mailed at a proper time, and properly stamped and addressed, is a good service of notice, whether the person ever received it or not.1 But a letter a...
-Sec. 274. Personal Service Of Notice
Personal service is required only in the case mentioned in the preceding section, to wit, that where the party serving notice and the party to be served reside in the same place. This personal service...
-Sec. 275. Service At A Place Designated
The place to serve a party with notice may be designated by him, and such direction remains good until it is countermanded;1 and a notice left at that place will be good, although an actually personal...
-Sec. 276. To Whom Notice Is To Be Given
In the matter of serving notices, the notice, however it comes to the person to be charged, whether by mail or by messenger, from the holder or his agent or from other prior party, must be given to hi...
-Sec. 277. Notice To Successive Obligors
The question of the person to whom notice is to be given has hitherto been considered as if the holder were himself giving notice. But the theory of commercial paper is that it is a succession of cont...
-Sec. 278. By Whom Notice Is To Be Given
The notice may be given by the holder or his agent.1 It is not material whether the one or the other gives the notice.2 Under this rule the notary employed is an agent, which fact may be inferred from...
-Sec. 279. Place To Direct By Mail
We have hereinbefore discussed the place of service where the service is not to be made by mail and the residence is known.1 It will be necessary now to consider to what postoffice the notice should b...
-Sec. 279. Place To Direct By Mail. Continued
9 Beckwith v. Smith, 22 Me. 125. 10 Young v. Durgin, 15 Gray, 264; Robinson v. Barber, 8 Am. Law J. (N. S.) 59; Lewiston Falls Bank v. Leonard, 43 Ma 144 (represented by indorser to be his postoffice...
-Sec. 280. Absence From Home
Incidentally, in the preceding section upon personal service, the effect of a person's absence from his home was noticed. The rule may be stated to be that the temporary absence of a person from his r...
-Sec. 281. Change Of Residence
Some of the instances mentioned in the former section may be considered as cases where the indorser or drawer has changed his residence, and no further reference needs be made to them here. It is need...
-Sec. 282. Diligence To Find Address
The question of notice to an indorser is never one of the actual receipt of notice, except where the server has failed to exercise due diligence in the manner of service.1 Assuming the server not to k...
-Sec. 282. Diligence To Find Address. Continued
13 Gilchrist v. Donnell, 53 Mo. 591. See the language of the court in Whitridge v. Rider, 22 Md. 548; but Goodloe v. Godley, 13 Smedes & M. 233, says that no further inquiry is necessary. 14 See the ...
-Sec. 283. Time For Service
Subject to excuses for no notice at all, and subject to reasons for delay which are adequate, the rule as to the necessity of promptitude in giving notice is strictly held. The parties who may claim t...
-Sec. 284. What Mail Of The Day
As we have seen, where notice is served by mail in the same place where it is given, the letter should be deposited in the mail, if deposited the next dav after demand, in time to be delivered on that...
-Sec. 285. Time For Successive Obligors
As we have seen, the notice may come through successive holders or indorsers,1 and each indorser has one day in which to forward notice after service has been received by him.2 The rule of the earlies...
-Sec. 286. Time Of Service As Affected By Holidays And Sundays
Where the day upon which notice should have been given is a holiday, assuming that day to be the day of demand and refusal, if that day had not fallen upon Sunday or a holiday, there is no question bu...
-Sec. 287. Service As Affected By Death Or Illness
The death of the person to be served may affect the place of service, the manner of service or the time thereof. The death of the holder can only affect the time of service or the person by whom the n...
-Sec. 288. Customs And Usages As To Notice
The customs and usages of a.bank where a note is made payable, even though it may be made payable there by parol agreement, binds the indorser who knows of the agreement,1 and so it is that a custom o...
-Sec. 280. Actual Notice
Actual knowledge of dishonor is not the equivalent of notice.1 The fact that an indorser was present when payment was demanded and refused does not excuse notice as to him,2 unless, of course, he had ...
-Sec. 290. Excuses For Failure To Notify
The use of due diligence may be considered as an excuse for failure to notify, as may miscarriages in the mail, or failure of the person to deliver with whom the notice is left where a proper personal...
-Sec. 291. Effect Of War And Pestilence
Where war has suspended the ordinary intercourse between two places, the transmission of notices between those places cannot be made.1 While the state of war continues the giving of notice is nugator...
-Sec. 292. Result Of Want Of Due Notice
As to all parties to negotiable paper entitled to claim notice, except the drawer of a check, who can claim recompense only to the extent of injury, those who have not been given notice in the manner ...
-Article V. - Waivek Or Demand And Notice. Sec. 293. Waiver Of Demand And Notice In General
The waiver of acceptance of paper requiring acceptance has been examined in preceding sections.1 The waiver of acceptance, it was said, does not dispense with demand of payment and notice of non-payme...
-Sec. 294. Who May Make Waiver
The person to be charged by demand and notice must make the waiver either himself or through an agent with express or implied authority. Where the agent's authority to waive demand and notice of disho...
-Sec. 295. To Whom The Waiver Should Be Given
A waiver must be made to one who is a holder of the paper or to some one for such a holder,1 except that an agreement, it has been held, made by the indorser with the maker, that he would take up the ...
-Sec. 296. Express Waiver In Writing
Cases of guaranty are sometimes considered, and no doubt very properly so, as instances of waiver.1 An indorser who writes the word accountable after his signature waives demand and notice;2 but the...
-Sec. 297. Filling Up Of Blank
The general rule is said to be that if a written waiver appears above the signature of an indorser, it is presumed to have been placed there with his authority.1 The courts are badly divided upon the ...
-Sec. 298. Parol Waiver
The waiver of the necessity for demand and notice may be made by paroll unless the statute or rule of law held in the jurisdiction expressly, requires the waiver to be written;2 but even in the latter...
-Sec. 299. Promise To Pay Before Maturity
A promise by the indorser to pay the note, made before maturity, is a promise essentially different from the promise made by the indorsement. If this promise is orally made at the time of the indorsem...
-Sec. 300. Indemnity As A Waiver
An indorser who protects himself by receiving security from the principal debtor, the maker of the note, or from a prior indorser, waives his right to demand and notice,1 provided the security is suff...
-Sec. 301. Waiver After Maturity
The waiver of demand and notice after maturity presupposes that the indorser has already been released. For such a waiver there would seem to be no consideration, if it is gratuitous. But the question...
-Sec. 302. New Promise After Maturity
Anew promise to pay the note after maturity, made by the indorser with knowledge of his release, is binding upon him as a new and valid contract,1 dispensing with the proof of demand and lYeager v. Fa...
-Sec. 303. Part Payment After Maturity
A partial payment of the note by the indorser is equivalent to a new promise to pay,1 if the money to make payment came from by an indorser or a drawer of demand and notice.1 This waiver may arise eit...
-Sec. 304. Acknowledgment Of Liability
An unconditional acknowledgment of liability upon the paper after its maturity, made with knowledge of a release, operates as a waiver Peters, 9 S. & R. 125. See, however, for a partial payment in de...
-Article VI. - Protest And Certificate. Sec. 305. Meaning And Form Of Protest
The word protest as used by judges and lawyers has two meanings: one, those acts necessary to charge a drawer or indorser;1 the other, the formal certificate drawn up by a notary or some one acting ...
-Sec. 306. Execution Of The Certificate
The certificate should be made by a notaryl or by some one who has notarial powers; it may be a justice of the peace,2 or, where there is no notary, by a private person in the presence of witnesses.3 ...
-Sec. 307. Certificate As Evidence
A certificate of protest by a notary upon foreign bills proves a demand of payment and notice, if it so recites;1 but if the protest certificate is made by some other officer than a notary, his author...
-Sec. 308. Recitals Of Certificate
The certificate to be sufficient as proof of demand and notice should state in some way that a demand was made, that payment was refused, and that notice of non-payment was given.1 The fact of demand ...
-Sec. 309. Facts Of Which Certificate Is Evidence
The certificate of protest, where it is admissible as evidence, either under the general law or by reason of a statute, is competent to prove demand, refusal of payment, and notice.1 The certificate, ...
-Sec. 310. Conclusiveness Of The Certificate
The certificate, whether it be of a protest of domestic paper made evidence by statute or a foreign protest, is not conclusive, but it is prima facie evidence.1 The statements contained therein may be...
-Chapter XI. Circulating Notes. Sec. 311. Power To Issue Circulating Notes
The power to issue bank-notes by an incorporated bank must always be a question of statute. In the case of a private banker it must always be an inquiry as to a statutory prohibition. As to a corporat...
-Sec. 312. Statutory Prohibitions
Where there is a prohibition against the issuance of bank-notes, in order to show a violation of the act where the paper in itself is not a violation of the act, an intent to do so must be shown;1 but...
-Sec. 313. State Bank Tax
The state bank tax applies to amounts paid out by the bank in its previously issued notes, as well as to payments in the notes of other banks.1 But it applies only to notes payable in money.2 Due-bill...
-Sec. 314. Payment Of Notes
A bank note is an engagement by the bank to pay bearer a certain amount of specie upon demand.1 Being negotiable it passes by deliver7; hence if it be lost the holder loses his cause of action, if the...
-Sec. 315. Stockholders' Liability
If the association is unincorporated, each of the members of it is liable for all notes issued while he was a member.1 This liability is not, it seems, varied by an express notice that the terms of th...
-Sec. 316. Remedies For Refusal To Pay Notes
The action against the bank upon its notes should be at law, and under a statute it may be for money had and received;l and the action for destroyed notes, where no indemnity is needed, is at law.2 Wh...
-Chapter XII. Dissolution And Insolvency. Sec. 317. Surrender Of Charter
The charter having been granted by the state, it may be surrendered with the consent of the state,1 but not without it.2 This consent may be given by a special act3 or in accordance with a general law...
-Sec. 318. Reorganization And Consolidation
A reorganization of a bank or consolidation of banks can take place only under statutory authority. The national bank act permits the reorganization of a state bank into a national bank.1 The new nati...
-Sec. 319. Forfeiture Of Charter
The state has the right to forfeit a charter either for failure to observe the law in forming the corporation or for acts done in violation of law after the corporation is formed; thus, a failure to p...
-Sec. 320. Waiver Or Remission Of Forfeiture
Whenever a forfeiture has been incurred it may be remitted by the state by legislative act,1 and it seems by borrowing money from the bank after a forfeiture has been incurred.2 The forfeiture for ins...
-Sec. 321. Proceedings To Forfeit
The action to forfeit a charter is an action at law on behalf of the state in a direct proceeding for that purpose unless a different procedure is fixed by statute.1 The proceeding is of a civil natur...
-Sec. 322. Declaration Of Forfeiture
There has been an instance where the statute itself has operated to declare the forfeiture;1 but the forfeiture under statutes which define grounds for a forfeiture must be declared by a court.2 Until...
-Sec. 323. Effect Of Forfeiture Or Expiration Of Charter
When a charter has been duly declared forfeited, the bank has no longer any corporate existence. The bank only has such powers as are given to it by the statute.1 It is exactly the same with the expir...
-Sec. 324. Insolvency
A bank is insolvent when it is unable to meet its obligations out of its assets in the due course of business.1 A general suspension of specie payments, or notorious and continued inability to pay its...
-Sec. 326. Preferences
A preference by a bank in an assignment for creditors is permissible, unless forbidden by law.1 Such is the great weight of authority in spite of the protests of some courts and text writers. But pref...
-Sec. 327. Preferences By National Banks
Sections 5234, 5236 and 5242 of the Revised Statutes of the United States forbid preferences by insolvent national banks and require a pro rata distribution of its assets among its general creditors a...
-Sec. 328. Receivers Or Trustees For State Banks
However a receiver or assignee or trustee may be appointed, he acquires title to the bank's assets.1 The appointment under a statute of trustees, the appointment of an assignee by deed in trust for cr...
-Sec. 329. Rights Of Receivers Or Trustees Of State Banks
The rights of an assignee in insolveuey are determined by the deed of assignment unless a statute controls his action. 9 Dickerson v. Cass Co. Bank, 64 N. W. R 395. 10 People's Sav. Bank v. Superior...
-Sec. 330. Right Of Set-Off As To Insolvent Bank
The depositor's right of set-off has already been noticed,1 as well as the bank's right against the depositor.2 The debtor to the bank may set off against his debt owing to the bank any claim due to h...
-Sec. 331. Allowance And Payment Of Claims
It is usual, after a trustee or a receiver is in possession of the assets of the bank, for such officer to advertise the time for the presentation of claims. But he may pass upon claims before the dat...
-Sec. 332. Holders Of Notes Of The Bank
The vicissitudes of holders of the notes of insolvent banks in the days of state banks of issue form a melancholy chapter in the history of state banks. Owing to what may be termed an inherent defect ...
-Sec. 333. Receivers Of National Banks
The national banks are governed by the provisions of the national banking act, with the amendments thereto. Whenever a national bank has failed to make specie payments upon its notes or has become ins...
-Sec. 334. Effect Of Appointment Of Receiver Of National Bank
The appointment of the receiver does not dissolve the corporation. The bank may be suedl without joining the receiver,2 but he may be substituted and then the bank becomes merely a nominal party.3 But...
-Sec. 335. Claims And Assets
All the property of the bank at the time of its suspension becomes fixed as a fund for distribution among the general creditors.1 The receiver, acting for the comptroller, allows the various claims or...
-Sec. 336. Preferences And Attachments
The strenuous efforts made by the New York courtsl to maintain their jurisdiction over a foreign corporation doing business with citizens of the state caused it to hold that a national bank before ins...
-Sec. 338. Agent Succeeding Receiver Of National Bank
The third section of the act of congress of June 30, 1876, provides that, when the receiver has fully paid all the claims against the bank, the assets may be turned over to an agent nominated by the s...
-Sec. 339. Priorities Among Creditors And Claimants
It may be said to be a rule without exception that where a creditor enforces his claim against the assets of an insolvent bank, he can gain no priority from filing the suit to enforce his claim.1 It i...
-Sec. 340. General Creditors
Unless a system of preference is established by statute among general creditors, all those persons between whom and the bank the relation of debtor and creditor exists are general creditors. In a pecu...
-Sec. 341. Trust Funds As A Priority
As we have already seen, a deposit by a trustee rightfully made in the bank makes the trustee merely a general creditor of the bank.1 But a man may be a trustee because he is acting in violation of th...
-Sec. 341. Trust Funds As A Priority. Continued
19 If a general deposit is created and the depositor by fraud is induced to let his deposit remain, he is a general creditor. Venner v. Cox, 35 a W. R 769. 1 See note 3 to last section. 2 See Sec. S...
-Sec. 342. Special Depositors' Priority
As we have already seen, certain transactions with a bank create special or specific deposits,1 the essence of the transaction being that the relation created is that of bailor and bailee. The charact...
-Sec. 343. Proceeds Of Collections As A Priority
In discussing the nature of the undertaking assumed by a bank upon the deposit of paper for collection, it was pointed out that, when paper requiring collection is deposited, the transaction might be ...
-Sec. 344. Deposit In Insolvent Bank As A Priority
The act of a banker in keeping open his bank for the reception of deposits when he knows his bank is insolvent is a gross fraud, as such an act is on the part of an incorporated bank whose officers kn...
-Sec. 345. Public Funds
As we have seen, public funds rightfully deposited in a bank are not entitled to a priority,1 but if the deposit was made contrary to law a trust results against the bank,2 and this trust creates a pr...
-Sec. 347. Statutory Preferences
Under one system, at least, the creditors of a bank are divided into classes, as noteholders, depositors, and creditors, and a preference upon the assets is given in the order stated to the respective...
-Chapter XIII. Actions And Jurisdiction. Sec. 348. Summary Remedy
In the days when banks were considered as the favored creatures of the law, a summary remedy was given to them in some states and jurisdictions. Especially in the early Alabama reports will be found a...
-Sec. 349. Matters Of Procedure
Certain miscellaneous matters of procedure are grouped in this section. In those states which gave the president the right to bring suit for the bank, it was held that he, as the bank, could sue or be...
-Sec. 350. Jurisdiction Of Courts Over National Banks
The law of June 30, 1864 (13 Stat. 99), and of June 3, 1866, carried into section 5198 and section 629 of the Revised Statutes, gave jurisdiction in cases relating to national banks to the state court...
-Sec. 351. What Court Of State Or United States Has Jurisdiction
The rule as to jurisdiction of the various federal courts in the act of 1888 is that the suit, where diverse citizenship exists, must be brought either in the district of the residence of the plaintif...
-Sec. 352. Injunctions And Attachments Against National Banks
No state court, under section 5242 of the Kevised Statutes, can issue an injunction against a national bank prior to final judgment.1 This would seem to cover any injunction against officers of the ba...
-Chapter XIV. Savings Banks. Sec. 353. The Nature Of Savings Banks
The original conception of a savings bank was a place where the savings of working people could be deposited and united so as to form loanable capital. The funds were managed without pay by officers w...
-Sec. 354. Illustrative Cases On The Nature Of Savings Hanks
Whether a bank is a savings bank or not depends upon its functions and not its name.1 A savings bank which is authorized to do a commercial banking business is an ordinary commercial bank;2 and a stat...
-Sec. 355. Officers Of Savings Banks
The statutes are sometimes drawn so as to prevent an officer of a bank of circulation or deposit from becoming a director of a savings bank an exceedingly wise provision; but a court is likely in such...
-Sec. 356. Stockholders
Where the stockholders of a savings bank are bound upon their stock subscription in double the amount of the stock, the liability does not differ from that imposed upon ordinary bank stockholders; it ...
-Sec. 357. Powers Of The Savings Bank
The usual purpose for which a savings bank is incorporated or formed is to loan money. It may loan upon real estate1 and take security by way of mortgage upon land in another state. If it have power t...
-Sec. 358. Ultra Vires Acts
If a savings bank makes a loan contrary to a statute,1 or if it discounts a note without authority of law,2 or if it receives a bond to enable it to continue its business,3 the various instruments can...
-Sec. 359. Powers Of Officers
The power of an officer as agent to represent and act for his bank has been fully examined in section 73, ante, and the following sections. Some peculiar instances as to savings banks will be stated h...
-Sec. 360. The Contract Of Deposit
A savings bank does not pay money upon check, but upon production of the passbook accompanied by an order of the depositor. Such banks have generally a by-law to the effect that the deposit will be pa...
-Sec. 361. Ownership Of The Deposit
Deposits in savings banks are peculiarly prolific in questions as to the real owner of the deposit. Husband and wife often make deposits in the bank in their joint names, and the rule as to ownership ...
-Sec. 362. Transfer Of Deposit
As we have seen, the courts consider the matter of transferring the pass-book as controlling, where the pass-book is required to be produced for payment.1 But the pass-book is not a document that is n...
-Sec. 363. Payment Of The Deposit
There are two rules of savings banks which have a bearing upon the question of payment. The first is that a payment upon the production of the bank-book shall be a good payment. This does not excuse t...
-Sec. 364. Actions For Deposits
The usual action for a deposit will be the common-law action of assumpsit or debt.1 The book is, of course, evidence to show the deposit, and it may be offered solely for that purpose.2 A suit is not ...
-Sec. 365. Forfeiture Of Charter And Insolvency
The grounds for forfeiture of a charter of a bank have been already indicated.1 In the case of a savings bank a forfeiture for suspension, where no stockholder was complaining, was refused.2 Where ins...
-Chapter XV. Clearing-Houses. Sec. 366. Nature Of The Clearing-House
A clearing-house is a voluntary association1 of banks for the purpose of facilitating exchanges and settlements between them. Each bank in the clearing-house has a representative there at a certain ho...
-Sec. 367. Clearing-House Certificates
The status of these documents has not been settled. They are issued by a voluntary association and pass between the banks as money. There is no reason why they should not pass among individuals as mon...
-Sec. 368. Rules Of The Clearing-House
The rules of the clearing-house are binding only upon the members. They are not binding upon the depositors in the various banks;1 nor can customers claim the benefit of them or be injuriously affecte...
-Sec. 369. Bank As Clearing Agent
The rule of the clearinghouse as to a clearing agent generally requires notice to be given before the agent can withdraw, and therefore the clearing agent must keep on receiving and paying the paper o...
-Sec. 370. Clearing-House Settlements
It has been said that a settlement through the clearing-house upon balances presented does not become an account stated, where made in time of great public excitement, when there was no chance to inve...
-Sec. 371. Clearing-House Lien
Since insolvency of a national bank does not interfere with or change any liens existing at the time of the insolvency, the clearing-house has a perfect right to enforce upon the securities deposited ...
-Revised Statutes Of The United States And Acts Amendatory Thereof
Sec. 324 Bureau of the Comptroller of the Currency. - There shall be in the Department of the Treasury a bureau charged with the execution of all laws passed by Congress relating to the issue and regu...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 2
Sec. 736. Proceedings to Enjoin Comptroller.- All proceedings by any national banking association to enjoin the Comptroller of the Currency, under the provisions of any law relating to national bankin...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 3
Act of July 12, 1882, 22 Stat. 162, provides: That any national banking association may, at any time within the two years next previous to the date of the expiration of its corporate existence under p...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 4
Sec. 9. That any national banking association now organized or hereafter organized, desiring to withdraw its circulating notes, upon a deposit of lawful money with the Treasurer of the United States, ...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 5
Sec. 5140. Payment of Capital Stock. - At least fifty per centum of the capital stock of every association shall be paid in before it shall be authorized to commence business; and the remainder of the...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 6
Sec. 5148. Filling Vacancies. - Any vacancy in the board shall be filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election. Sec. 51...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 7
Sec. 5155. State Banks with Branches. - It shall be lawful for any bank or banking association organized under State laws, and having branches, the capital being joint and assigned to and used by the ...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 8
Sec. 5167. Custody op Bonds and Collection of Interest. - The bonds transferred to and deposited with the Treasurer of the United States, by any association, for the security of its circulating notes,...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 9
Sec. 5182. National Bank Notes and Money. - After any association receiving circulating notes under this title has caused its promise to pay such notes on demand to be signed by the president or vice-...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 10
Sec. 5189. Mutilation of Bank Notes. - Every person who mutilates, cuts, defaces, disfigures, or perforates with holes, or unites or cements together, or does any other thing to any bank bill, draft, ...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 11
(Act of March 3, 1875, 18 Stat. 399, provides for the reimbursement of the Treasurer by the Secretary of the Treasury of the expenses incurred under this act.) Sec. 4. That any association organized ...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 12
Act of February 18, 1875, 18 Stat. 320, provides that suits, actions, and proceedings against any association under this title may be had in any Circuit, District, or territorial court of the United S...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 13
Sec. 5207. United States Notes or Bank Notes as Collateral- No association shall hereafter offer or receive United States notes or national bank notes as security or as collateral security for any loa...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 14
Sec. 5214. Taxes Payable to the United States. - In lieu of all existing taxes, every association shall pay to the Treasurer of the United States, in the months of January and July, a duty of one-half...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 15
Sec. 5225. Destruction of Redeemed Notes. - Whenever the Treasurer has redeemed any of the notes of an association which has commenced to close its affairs under the (six) (five) preceding sections, h...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 16
Sec. 5233. Cancellation of Bank Notes. - All notes of national banking associations presented at the Treasury of the United States for payment shall, on being paid, be canceled. Sec. 5234. Appointmen...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 17
Sec. 4. This will be found incorporated in section fifty-two hundred and five, ante. Sec. 5. That all United States officers charged with the receipt or the disbursement of public moneys, and all off...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 18
First. To pay the expenses of the trust to the date of such payment. Second. To repay any amount or amounts which have been paid in by any shareholder or shareholders to such association upon and by ...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 19
Act of March 3, 1887, 24 Stat. 554, corrected by 25 Stat., provides that whenever in any cause, pending in any court of the United States, there shall be a receiver or manager in possession of any pro...
-Revised Statutes Of The United States And Acts Amendatory Thereof. Part 20
Sec. 5243. The Term National. - All banks not organized and transacting business under the national currency laws, or under this title, and all persons or corporations doing the business of bankers,...
-Addendum. Bills of Lading
The statement made on page 299 in regard to the duty of a bank in collecting a draft attached to or accompanied by a bill of lading, while technically correct, may seem to be misleading, and therefore...
-Addendum. Bills of Lading. Continued
A further question presents itself and maybe stated in this way: What is the effect of an acceptance of the draft upon the title to the property which is covered by the bill of lading ? It will not be...









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