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 though he gain it from a thief.

4First Nat. Bank v. First Nat. Bank, 151 Mass. 280, semble; Third Nat. Bank v. Central Nat. Bank, 76 Hun, 475, semble.

5 Some cases put the right of recovery upon the ground of the first bank's negligence. First Nat. Bank v. First Nat Bank, 151 Mass. 280; People's Bank v. Franklin Bank, 88 Tenn. 299. But see Comm. Nat. Bank v. First Nat Bank, 30 Md. 11. The basis of the rule ought to be that the bank first receiving a check ought to be compelled to verify the various indorsements. See also Van Wert Nat Bank v. First Nat. Bank, 6 Ohio Cir. Ct. R. 130; Allen v. Fourth Nat Bank, 59

N. Y. 12; Bank of Com. v. Grocers' Bank, 2 Daly, 289.

6 Corn Exchange Bank v. Nassau Bank, 91 N. Y. 74; First Nat Bank v. Northwestern Nat. Bank, 152 111. 296; Central Nat Bank v. North River Bank, 44 Hun, 114.

7 Bank of St. Albans v. Farmers' Bank, 10 Vt 141.

8 Corn Ex. Bank v. Nassau Bank, 91 N. Y. 74.

9 Corn Ex. Bank v. Nat. Bank of Republic, 78 Pa. 233: Iron City Nat. Bank v. Fort Pitt Nat. Bank, 159 Pa. 46.

10 See note 5, ante, to this section.

11 Preston v. Canadian Bank, 23

Fed. R. 179. But if the clearingit does it at its peril.1 Even though the stealing and forging be done by a clerk2 or a messenger3 of the depositor, where the depositor has not been guilty of negligence, the bank cannot charge the check, when paid, against the depositor. But where the depositor has been guilty of negligence in leaving the paper in negotiable form, he will be liable to the bank.4 The situation of the payee of stolen or lost paper, if not negotiable in form, is the same as if it were forged paper. The same rules precisely ought to govern as to certifying or paying such paper, whether as between the depositor and the bank or the bank and third parties. As between two banks, the same rules ought to govern as obtain in the case of forged paper. The principle is impliedly laid down in a case where stolen paper indorsed by a forged signature was paid by the bank on which it was drawn to another bank. The first bank was held entitled to recover from the second.5 Certificates of deposit when indorsed are negotiable. But where they are unindorsed they are not negotiable, and the owner may recover the amount of them from the bank without giving security.6 The situation of overdue certificates . of deposit would be the same.7 A certified check, payable to order, unindorsed, ought to be subject to the same rule as certificates of deposit unindorsed. An unaccepted check, payable to order, if lost can be stopped, either by the drawer or payee, and the payee of a certified check may stop it. But a certified check payable to bearer or generally indorsed house rule has been violated, the case is to be determined under the general rules of law as if there were no rule. National Bank v. Bangs, 106 Masa 441. See Sec. 368, post.

1 Belknap v. National Bank, 100 Mass. 376; First Nat Bank v. Bremer, 7 Ind. App. 685.

2 Belknap v. National Bank, supra.

3 Bristol Knife Co. v. First Nat. Bank, 41 Conn. 421. There was no forgery in this case.

4 Bowden v. Third Nat. Bank, 12 Wkly. Law Bui. 184.

5 State Nat. Bank v. Freedmen's Sav. Bank, 2 Dill 11.

6 Citizens' Bank v. Brown, 45 Ohio St. 39; National Bank v. Ringel, 51 Ind. 393. In this case a certificate payable in current funds is said not to be payable in money.

7 Citizens' Nat. Bank v. Brown, 11 Wkly. Law Bui. 220, at the end of the opinion recognizes this principle, but the syllabus does not contain a reference to this holding.