In accordance with the principles which apply to orders, a draft which is not payable out of any specific fund does not amount to an assignment of a debt owing by the drawer to the drawee, as long as it is not accepted, since it does not purport to convey any designated fund.1 This rule has been carried into the Negotiable Instruments Law by express statutory provision.2

8Holbrook v. Payne, 151 Mass. 383, 21 Am. St. Rep. 456, 24 N. E. 210.

9 McDaniel v. Maxwell, 21 Or. 202, 28 Am. St. Rep. 740, 27 Pac. 952.

10 Goldman v. Murray, 164 Cal. 419, 129 Pac. 462; Emerson-Brantingham Co. v. Lyons, 102 Kan. 733, 172 Pac. 513; Wamsley v. Ward, 61 W. Va. 65, 55 S. E. 998.

11 Nelson v. Bennett Co., 31 Wash. 116, 71 Pac. 749.

12 Andrews v. Frierson, 134 Ala. 626, 33 So. 6; Wamsley v. Ward, 61 W. Va. 65, 55 S. E. 998 (not a legal assignment).

13 See Sec. 2261.

1 United States. Fourth Street National Bank v. Yardley, 165 U. S. 634, 41 L. ed. 855; In re Hollens, 215 Fed. 41, L. R. A. 1915B, 438; Macy v. Roed-enbeck, 227 Fed. 346.

California. Cashman v. Harrison, 90 Cal. 297, 27 Pac. 283.

Connecticut. Windsor Cement Co. v. Thompson, 86 Conn. 511, 86 Atl. 1.

Georgia. Baer v. English, 84 Ga. 403, 20 Am. St. Rep. 372, 11 S. E. 453; Talladega Mercantile Co. v. Robinson, etc., Co., 96 Ga. 815, 22 S. E. 1003.

Illinois. Abt v. Savings Bank, 159 111. 467, 50 Am. St. Rep. 175, 42 N. E. 856 (controlled by New York law).

Kansas. Clark v. Toronto Bank, 72 Kan. 1, 115 Am. St. Rep. 173, 2 L. R. A. (N.S.) 83, 82 Pac. 582.

Massachusetts. Duryea v. Harvey, 183 Mass. 429, 67 N. E. 351.

Michigan. Grammel v. Carmer, 55 Mich. 201, 54 Am. Rep. 363, 21 N. W. 418.

Minnesota. Lewis v. Bank, 30 Minn. 134, 14 N. W. 587.

Missouri. Kimball v. Donald, 20 Mo. 577, 64 Am. Dec. 209.

Oklahoma. First National Bank v. School District No. 4, 31 Okla. 139, 39 L. R. A. (N.S.) 655, 120 Pac. 614.

The drawer may order the drawee not to pay the draft, and if such order is given to the drawee before acceptance and payment, the drawee can not charge to the account of the drawer a subsequent payment made in defiance of such order.3 Such draft does not assign an interest in collateral held by the drawer to meet a proposed overdraft.4 If the drawee makes an assignment before acceptance the payee has no claim against such assignee.5 If the drawer makes an assignment after giving the draft and before it is presented for payment, the funds in the hands of the drawee should be paid to the assignee.6 If the property of the drawer passes into the hands of a receiver after the draft is issued and before it is accepted or paid, the holder of the draft has no priority as to funds belonging to the drawer in the hands of the drawee.7 If a creditor of the drawer attaches the funds of the drawer in the hands of the drawee before the draft is accepted, such creditor obtains priority over the payee.8 This rule has been applied where the draft is for the exact amount of the debt due from the drawee,9 or for a less amount,10 or where a particular fund has been designated, out of which the drawee is to be reimbursed, as long as the draft is payable generally on acceptance by the drawee.11 In some jurisdictions it has been held, apparently contrary to the intention of the parties, that a draft for the whole amount due from the drawee to the drawer is an assignment of such fund.12 In other jurisdictions a draft for part of the amount due from the drawee to the drawer is an assignment in equity.13

Oregon. Erickson v. Inman, 34 Or. 44, 54 Pac. 949.

Pennsylvania. Commonwealth v. Ins. Co., 162 Pa. St. 586, 42 Am. St. Rep. 844, 29 Atl. 660.

Tennessee. Akin v. Jones, 93 Tenn. 353, 42 Am. St. Rep. 921, 25 L. R. A. 523, 27 S. W. 669.

Virginia. Gardner v. Moore's Administrator, 122 Va. 10, 94 S. E. 162.

Washington. Frederick v. Spokane Grain Co., 47 Wash. 85, 91 Pac. 570.

2 Fulton v. Gesterding, 47 Fla. 150, 36 So. 56; Gardner v. Moore's Administrator, 122 Va. 10, 94 S. E. 162; Frederick v. Spokane Grain Co., 47 Wash. 85, 91 Pac. 570.

3 First National Bank v. School District No. 4, 31 Okla. 139, 39 L. R. A. (N.S.) 655, 120 Pac. 614.

4Macy v. Roedenbeck, 227 Fed. 346, L. R. A. 1916C, 12.

5Abt v. Savings Bank, 159 111. 467, 50 Am. St. Rep. 175, 42 N. E. 856. So where a receiver is appointed for the drawee. Bosworth v. Bank, 64 Fed. 615, 12 C. C. A. 331.

6 Covert v. Rhodes, 48 O. S. 66, 27 N. E. 94.

7 Clark v. Toronto, 72 Kan. 1, 115 Am. St. Rep. 173, 2 L. R. A. (N.S.) 83, 82 Pac. 582.

8 Baer v. English, 84 Ga. 403, 20 Am. St. Rep. 372, 11 S. E. 453.

9 Fulton v. Gesterding, 47 Fla. 150, 36 So. 56 (decided under the Negotiable Instruments Law).

10 Bush v. Foote, 58 Miss. 5. 38 Am. Rep. 310.

11 Whitney v. Bank, 137 Mass. 351, 50 Am. Rep. 316; Schmittler v. Simon, 101 N. Y. 554, 54 Am. Rep. 737, 5 N. E: 452.

By agreement outside of the draft, the parties may cause it to operate as an assignment to the payee of the funds in the hands of the drawee.14 Thus a letter asking the drawee to pay to the holder of the draft the amount due to the drawer, even if the drawee should not pay the draft, is an assignment.15 A direction to the consignee of goods to apply the proceeds to paying a bill of exchange, does not effect an assignment unless the bill was negotiated under an agreement that such proceeds should be applied to its payment.16

Acceptance of a bill by the drawee is said to bind the funds of the drawer in the hands of the drawee; and accordingly it is held that if the bill of exchange is accepted, it effects an assignment of the funds in the hands of the drawee,17 even if it is drawn on the drawee at his previous request.18 On the other hand, acceptance does far more than merely bind the funds of the drawer in the hands of the drawee. It makes the drawee personally liable to the holder, without regard to the existence of funds of the drawer in the hands of the drawee. For this reason it has been held that acceptance is not assignment.19

If a draft is drawn upon a specific fund for the whole of such fund, and such draft is in the control of the payee, it has been held to be an assignment of such fund as it places it in the control of the payee.20 Whether a draft for a part of a particular fund can operate as an assignment thereof is discussed in connection with partial assignments.21

12Abt v. Savings Bank, 159 111. 467, 50 Am. St. Rep. 175, 42 N. E. 856; Brady v. Chadbourne, 68 Minn. 117, 70 N. W. 981; Nimocks v. Woody, 97 N. Car. 1, 2 Am. St. Rep. 268, 2 S. E. 249.

13 Warren v. Bank, 149 111. 9, 25 L. R. A. 746, 38 N. E. 122.

14 Lawrence National Bank v. Ko-walsky, 105 Cal. 41, 38 Pac. 517 (the draft being for the full amount of the debt); First National Bank v. Steel Co., 87 Ga. 435, 13 S. E. 586; First National Bank v. Ry., 52 la. 378, 35 Am. Rep. 280, 3 N. W. 395; Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83, 17 N. E. 671.

15 First National Bank v. Steel Co., 87 Ga. 435, 13 S. E. 586.

16 Shannon v. Wolf, 173 111. 253, 50 N. E. 682.

17 Mandeville v. Welch, 16 U. S. (5 Wheat.) 277, 5 L. ed. 87; Wells v. Brigham, 60 Mass. (6 Cush.) 6, 52 Am. Dec. 750; Buttrick Lumber Co. v. Collins', 202 Mass. 413, 89 N. E. 138; White v. Fernald-Woodward Co., 76 N. H. 83, 79 Atl. 641.

18Walcott v. Richman, 94 Me. 364 47 Atl. 901.

19 Cowperthwaite v. Sheffield, 3 N. Y 243.