The bank of primary collection in the states which recognize its liability for the acts of its correspondent banks may maintain an action against the last-named bank for negligence,1 but the holder of the paper cannot.2 In those jurisdictions which hold the rule that the correspondent bank is the agent of the owner of the paper, the owner may sue the correspondent bank for negligence;3 and this would seem to be the proper rule, even though the fact of the collection being for the owner, and not for the first bank, did not appear, as it would not, if the owner indorsed generally to the first bank. The real owner of the paper may maintain the action against the collecting bank, even though the paper had been pledged and the paper was not placed in the bank for collection by the pledgee.4 "Where note was returned to the owner after the negligence occurred, it is of course not necessary to show a redelivery to the bank.5 The fact that the note was received for collection by the bank is sufficient proof of the general contract of collection,6 and unless it is sought to charge the bank with knowledge of special instructions, it is not necessary to prove them or to allege them. It is said in one case that only that part of the contract of which the breach occurred needs to be set out in the pleading.7 The pleading and the proof plaintiff to show in regard to a check that the drawee was solvenl and the check collectible.5 And where the negligence alleged is a failure to present a check which was given for a draft, whereby the payment of the check was lost, the holder must show that the drawer of the draft became insolvent.6 The fact that checks of the drawer were paid up to the day after the check should have been presented is proof that the check would have been paid if presented at the proper time.7 In proving insolvency of a particular person a return of nulla bona against him is competent proof,8 or a general reputation of insolvency within a reasonable time after the maturity of the paper on which he is liable.9 But the fact that a person was in embarrassed circumstances does not necessarily indicate insolvency.10 Other questions that have arisen are noticed in the note.11

5 First Nat Bank v. Price, 52 Iowa, 570.

1See cases cited in note 32 to Sec. 181, ante.

2 Montgomery Co. Bank v. Albany City Bank, 7 N. Y. 459. Bank of Washington v. Triplett, 1 Pet. 25, has a dictum to the contrary. Even in those states which consider the correspondent bank as the agent of the primary bank, the latter bank ought to have an action against its correspondent for negligence See Merchants' Bank v. Stafford Nat.

Bank, 44 Conn. 565, and note 32 to Sec. 181.

3 All the cases recognize this principle.

4 Bank of Utica v. McKinster, 11 Wend. 473.

5 Merchants' Bank v. Bank of Commerce, 24 Md. 12.

6 Jagger v. National Germ. Am. Bank, 53 Minn. 386.

7 American Exp Co. v. Pinckney, 29 111. 392. This case shows clearly the fact that a collection is a bailment from the form of the pleadmust show damage.8 If it is alleged that certain parties to the paper were discharged, it must be alleged and proven that those remaining liable are not good and that the parties discharged were.9 If the negligence complained of was a delivery to the payer, the loss of the claim must be averred as a consequence.10 The allegation of a consideration is not material where an acceptance of the collection is averred.11 It certainly is not necessary where the action is one against the bank for conversion.12