The relation of banker and general depositor is that of debtor and creditor, not that of trustee and benefici167. Nat. Bk. v. Whitney, 103 U. S. 09.
ary. The depositor loans his money to the bank and the bank thereupon becomes the owner of such money and indebted to the depositor for the amount thereof. See, however, next section, as to character of special deposits.
Deposits are known as general, special and specific. A general deposit is a deposit made generally, to be mixed with the other funds of the bank, the depositor becoming a general creditor; a special deposit is a deposit under an agreement that the identical funds shall be returned; a specific deposit is a deposit made for some particular purpose, as of transmission.
A general deposit is the usual one. The deposit is set down to the depositor's general account, he becomes a general creditor and loses his right to the particular funds deposited. A special deposit is made for the pur pose of safe keeping and return by the bank of the particular funds deposited. In such a case the bank becomes, not a general debtor, but a trustee. A specific deposit is one made for a particular purpose as where particular money is to be transmitted by the bank.
For a number of reasons it is important to know whether a fund is general or special or specific. Perhaps the most important is, that on the failure of the bank, the general depositor must share pro rata with other general depositors, while a special depositor can claim the very fund deposited by him.
Where money is deposited, and even where checks are deposited, which are credited as cash received, the deposit is general. Thus A has on hand $100 in currency, and $25 in the shape of a check received from B. He makes out a deposit slip for, and is credited in his bank book with a deposit of $125. This deposit is general. A becomes a general creditor. If the bank fails A must share pro rata with other creditors. He cannot claim payment in full, unless the funds of the bank are sufficient to pay 100 per cent to all general depositors.
A bank may, however, receive deposits for special keeping, as where it receives money in a bag or box to be kept in that manner by it; or where it receives money or funds specially in trust, or where it receives a package of bonds or other securities for safe keeping and return. In such a case it must return the very thing received, must keep the same with due care, and if the bank fails, the depositor can receive the very thing deposited. On the other hand, the depositor runs the risk of its theft or loss, without the bank's negligence, and also of its depreciation. In case of the bank's failure, however, the special fund must be capable of identification; otherwise the special depositor stands on the footing of a general depositor.
Certificates of deposit are certificates issued by the bank reciting the receipt of a certain amount of money received by the holder, an equivalent of which is to be returned to the depositor or to the holder, upon return of the certificate properly indorsed. It is negotiable if drawn in accordance with the rules that govern commercial paper.
Banks issue certificates of deposit which when drawn to order or to bearer are negotiable if otherwise in accord with the rules governing commercial paper. They are forms of promissory note. In such a case the money represented by the deposit is not subject to check. The holder of the certificate is a general depositor of the bank, to be paid out of its general funds. Usually also a certificate stipulates that it shall draw interest at a certain rate.