If A credits B on his account, with the value of a negotiable instrument which B has transferred to A, and B checks out such deposit before A has notice of defects in such instrument, A is holder for value.1 According to the weight of authority, it is not the giving credit but honoring checks to the extent of such credit in whole or in part that makes the bank a holder for value,2 and until such credit is checked out, A is not a holder for value.3 If the entire amount of the deposit is checked out before A has notice of defects in the paper for which such credit was given, A is a bona fide holder.4 If A applies the amount of such instrument to the payment of B's indebtedness to A, with B's consent, A is a holder for value.5 to Camas Prairie State Bank v. Newman, 15 Ida. 719, 21 L. R. A. (N.S.) 703, 99 Pac. 833.

11 Matlock v. Scheuerman, 51 Or. 49, 17 L. R. A. (N.S.) 747, 93 Pac. 823.

12 Matlock v. Scheuerman, 51 Or. 49, 17 L. R. A. (N.S.) 747, 93 Pac. 823.

1 United States. Armstrong v. American Exchange Bank, 133 U. S. 433, 33 L. ed. 747.

Arkansas. Hamilton National Bank v. Emigh, 127 Ark. 545, 192 S. W. 913.

Illinois. American Exchange Nat. Bk. v. Theummler, 195 111. 90, 88 Am. St. Rep. 177, 58 L. R. A. 51, 62 N. E. 932.

Iowa. Shaw v. Jacobs, 89 Ia. 713, 719, 48 Am. St. Rep. 411, 21 L. R. A. 440, 55 N. W. 333, 56 N W. 684.

Massachusetts. Shawmut National Bank v. Manson, 168 Mass. 425, 47 N. E. 196.

Minnesota. First National Bank v. McNairy, 122 Minn. 215, Ann. Cas. 1914D, 977, 142 N. W. 139.

Nebraska. National Bank v. Bosse-meyer, 101 Neb. 96, L. R. A. 1917E, 374, 162 N. W. 503.

Oklahoma. First National Bank v. Stallings, - Okla. - , 177 Pac. 373.

Utah. Helper State Bank v. Jackson, 48 Utah 430, 160 Pac. 287.

Wisconsin. Northfield National Bank v. Arndt, 132 Wis. 383, 12 L. R. A. (N.S.) 82, 112 N. W. 451.

See, When is a Bank the Bona Fide Owner of a Check Left for Deposit or Collection? by Albert S. Bolles, 56 Pennsylvania Law Review, 375.

2Fruitticher Electric Co. v. Birmingham Trust & Savings Co., - Ala. - , 79 So. 248; Dreilling v. Bank, 43 Kan. 197, 19 Am. St. Rep. 126, 23 Pac. 94; Union National Bank v. Winsor, 101 Minn. 470, 118 Am. St. Rep. 641, 112 N. W. 999; Citizens' State Bank v. Cowles, 180 N. Y. 346, 105 Am. St. Rep. 765, 73 N. E. 33.

3 United States. Dresser v. Construction Co., 93 U. R. 92, 23 L. ed. 815.

Alabama. Alabama Grocery Co. v. First National Bank, 158 Ala. 143, 132 Am. St. Rep. 18, 48 So. 340; Sherill v. Merchants' Bank, 195 Ala. 175, 70 So. 723; Fruitticher Electric Co. v. Birmingham Trust & Savings Co., - Ala. - , 79 So. 248.

Iowa. McNight v. Parsons, 136 la. 390 [sub nomine, McKnight v. Parsons, 22 L. R. A. (N.S.) 718, 113 N. W. 858].

Whether A can be a bona fide holder if less than the entire amount of the credit has been exhausted, is a question on which there is a conflict of authority. It is said that as long as B has on deposit with A an amount of money greater than the amount of the negotiable instrument, A is not a holder for value.6 If B's checks against the deposit and his prior indebtedness do not, when added together, equal or exceed the credit, the bank is not a bona fide holder as to such excess.7 On the other hand, it is said that the withdrawal of a substantial amount of the credit is sufficient to make A a bona fide holder.8If B deposits a large number of notes with A, and checks out half of the total amount thus deposited, it has been said that A is a bona fide holder for value, although A has on hand an amount exceeding the face of the instrument which he has thus acquired.9

In any event, the existence of an apparent balance which consists of credit upon other deposits which prove to be of no value, does not prevent A from being a holder for value.10

Minnesota. Union National Bank v. Winsor, 101 Minn. 470, 118 Am. St. Rep. 641, 112 N. W. 999.

Nebraska. National Bank of Commerce v. Bossemeyer, 101 Neb. 96, L. R. A. 1917E, 374, 162 N. W. 503.

New York. Citizens' State Bank v. Cowles, 180 N. Y. 346, 105 Am. St. Rep. 765, 73 N. E. 33.

Oklahoma. Morrison v. Bank, 9 Okla. 697, 60 Pac. 273.

Pennsylvania. Dougherty v. Bank, 93 Pa. St. 227, 39 Am. Rep. 750.

West Virginia. Marion National Bank v. Harden, - W. Va. - , 97 S. E. 600.

4 Hamilton National Bank v. Emigh, 127 Ark. 545, 192 S. W. 913; First National Bank v. Stallings, - Okla. - , 177 Pac. 373; Northfleld National Bank v. Arndt, 132 Wis. 383, 12 L. R. A. (N.S.) 82, 112 N. W. 451.

5 Mechanics Bank v. Chardavoyne, 69 N. J. L. 256, 101 Am. St. Rep. 701, 55 Atl. 1080.

6 McNight v. Parsons, 136 Ia. 390 [sub nomine, McKnight v. Parsons, 22 L. R. A. (N.S.) 718, 113 N. W. 8581; Central Savings Bank v. Stotter (Mich.), 174 N. W. 142; Citizens' State Bank v. Cowles, 180 N. Y. 346, 105 Am. St. Rep. 765, 73 N. E. 33; Marion National Bank v. Harden, - W. Va. - , 97 S. E. 600.

7 Tatum v. Commercial Bank, 185 Ala. 247 64 So. 561.

8 Bland v. Fidelity Trust Co., 71 Fla. 499, L. R. A. 1916F, 209, 71 So. 630; First National Bank v. Persall. 110 Minn. 333, 136 Am. St. Rep. 499. 125 N. W. 506, 675; United States National Bank v. McNair, 114 N. Car. 335, 19 S. E. 361.

9 Bland v. Fidelity Trust Co., 71 Fla. 499, L. R. A. 1916F, 209, 71 So. 630.

10 Standard Trust Co. v. Commercial National Bank, 240 Fed. 303.