Where a note or other security is made payable at a bank, the bank is not thereby made the agent of the payee or holder to receive payment,1 and any payment which it receives from the maker on such a securitv it receives as the maker's agent and not the payee's.2 One case has gone so far as to hold that the presentation of the note and the having it marked good by the teller of the bank does not constitute payment to the payee.3 But the payee of the note may make the bank his agent to receive payment on the note.4 If he does so, the bank is bound to the same duties that any other bank owes to one depositing paper for collection.5 If it has funds of the maker and fails to credit them on a check, it will make itself liable for the check,6 but not if it credits the check and, finding the depositor insolvent, before it communicates the credit to the payee, revokes it.7 Where a note is made payable at a bank, as we have seen, the great weight of authority is that the bank has the right to apply upon it a deposit to the credit of the person liable to pay the note;8 but this rule would properly apply only to the actual presence of funds, although if it did pay the note it would thereby become the owner and could enforce it against the maker.9 Hence if there is a credit to the maker in the bank which is made the payee's agent, in those jurisdictions which admit the bank's right to make the application, the bank would be liable for failing to make the application of the deposit.10 But in those jurisdictions which do not admit this right in the bank, there would probably be no such duty;11 certainly not unless the payee agreed to it,12 and certainly not as to deposits afterwards received.13

1 Kent v.Dawson Bank,13Blatchf. 237.

2 St. Nicholas Bank v. State Nat. Bank, 128 N. Y. 26. It is amusing to note that the court does not consider the decisions of the Supreme Court of Tennessee any proof of what the common law is.

1 Ward v. Smith, 7 Wall. 447; Wood v. Merchants' Sav. Co., 41 111. 267; Caldwell v. Evans, 5 Bush, 380; Pease v. Warren, 29 Mich. 9; Williamsport Gas Co. v. Pinkerton, 95 Pa. 62; Grissom v. Commercial Nat Bank, 87 Tenn. 350.

2 Ward v. Smith, 7 Wall. 447.

3Wood v. Merchants' Sav. Co., 41 I11. 267. But there is a grave question whether this decision is correct. If the note were a check and presented and certified to the payee, there would be a novation and the drawer would be released. The same rule applies to the certification of a note. Riverside Bank v. First Nat. Bank, 74 Fed. R. 276. The bank becomes liable and the drawer is released. The court in this case did not seem to understand that a certification takes so much of the drawer's money and gives it to the bank The payee by obtaining the certification asks for it. The case is wrong.

4 Ward v. Smith, 7 Wall 447.

5 Blakeslee v. Hewitt, 76 Wis. 341; Wood River Bank v. First Nat. Bank, 36 Neb. 744.