29. Payment Of Depositors' Notes

Another duty of the bank is to pay the notes of depositors that reach the bank on or before the day of their maturity. The rule is not uniform ; in some states the courts have distinctly declared that banks must not do this, but in most of them the rule is otherwise. A note that is unindorsed, the bank can and generally does pay; an indorsed note, it must pay in order to protect the indorsee. Of course, if the depositor forbids the bank from paying or draws out his deposit before the note is charged up to him, this is his right; but in many cases they are made payable at the bank where he keeps his deposit with the expectation that they will be presented there and paid very much like his checks, and thus all thought of them is banished from his mind.1

30. By-Laws Regulating Payments And Collections

Lastly may be added some suggestions in the form of bylaws regulating the payments of deposits and making of collections.

1. Every check received for deposit in whatever way it may be entered in any book of the bank, will not be regarded as actual cash for which the bank will be responsible until the money has been received from the bank or banks to which it has been sent for collection, or through which it may pass before the collection is completed; and a draft or other check sent by the collecting bank or agent in return as payment, shall not be regarded as cash until actually paid, and this rule shall be binding between this bank and its depositors in all cases, except those, if any, in which it has been negligent in selecting agents for collection.

1 See Chapter X, Section 28, for a more complete statement.

2. This bank will not be responsible for the excess paid on any altered or raised check which has been altered or changed so skilfully that it can not be detected by the exercise of ordinary care by the paying teller.

3. The checks of depositors drawn on sufficient funds will be paid, notwithstanding the death of the depositor, or at any time within ten days after knowledge of the event has come to the bank unless otherwise directed by the executor or administrator of the estate of the deceased.

4. Checks will not be paid beyond thirty days after their date unless satisfactory reasons are given for the delay in presenting them, or authority has been directly given to the bank by the maker after making them to pay the same.

5. Deposits made by two or more trustees, executors, administrators, or other persons acting in a joint capacity, not including partnerships, can he withdrawn only on the signed order of all of them, unless a satisfactory reason is given to the bank for paying on the order of one, or a less number than all.

6. Depositors should examine their pass books, checks, and other vouchers within ten days alter their pass books have been written up and returned with accompanying vouchers to them, and this hank will not hold itself re sponsible for any mistake made in paying on a wrongful signature if Such examination is not made within the time mentioned, unless the depositor was sick, absent, or other-wise unable to perform his duty, or unless the bank was wilfully negligent or wrong in paying without adequate authority.

7. When a check is presented and the funds of the maker are not sufficient to pay it, the bank may pay whatever amount it may have belonging to him, either taking the check and indorsing the amount thus paid on the back, or taking a receipt therefor, describing fully the check on the authority of which the amount is paid.

8. If two or more checks are presented either directly over the counter or through the clearing house at the same time for payment, and the maker's deposit is insufficient to pay the full amount of all, his deposit may be applied pro rata on each and indorsed or receipted for as described in the foregoing by-law.

9. All checks, notes, or other deposits credited as cash, in whatever manner they may be indorsed, may be charged back in the event of their non-collection.

10. Checks and other instruments deposited for collection may be sent to the drawee bank to be collected, if this bank shall so determine. Checks and other instruments deposited for collecting may be sent to the drawee bank to be collected when there is no other reputable bank or banker in the same place.

11. In making collections, this bank considers itself fully authorized in taking other checks in payment drawn on a reputable bank in another city than the drawee bank.

12. In collecting time drafts secured by merchandise to which the bill of lading or other title thereto is attached, the bank may surrender the same on the presentation and acceptance of the draft, unless it clearly and unequivocally states that this shall not be done, or instructions to that effect have been received from the owner.

13. Notes and other obligations made payable here will be regarded as a direction to pay them, which will be done whenever the maker's deposit is sufficient for that purpose.