Unless a system of preference is established by statute among general creditors, all those persons between whom and the bank the relation of debtor and creditor exists are general creditors. In a peculiar case it was held that creditors of the bank who, after the bank went into voluntary liquidation, had taken paper belonging to the bank in payment of their claims were not entitled to share in the assets, because the bank had indorsed the paper; the reason of the decision was that the bank has no such power.1 But conceding that the relation of debtor and creditor exists, there is no preference among such creditors upon the assets. This principle has been applied in many ways. "Where the directors of a bank paid into it a large sum of money to enable it to continue business, and an account was opened with the fund in the name of trustees, they were held to be mere general creditors.2 Where a deposit is rightfully made by a trustee, the trustee is merely a general creditor,3 or where funds are rightfully deposited by an agent, the agent is nothing more than a general creditor.4 Public funds properly deposited in the bank give no preference; the public is merely a general creditor through the officer depositing the money.5 Certificates of deposit create no lien upon any portion of the assets,6 even though the banker promised to keep the funds deposited separate from the other funds of the bank.7 The same rule applies to certified and accepted checks.8 So collections deposited for credit when collected and credited create only the general relation of debtor and creditor;9 and in those jurisdictions which hold that a deposit for collection is a purchase by the bank, as soon as the deposit is credited the bank becomes a debtor to the depositor.10 General depositors in an insolvent bank, known to and creditor and the claimant becomes a general creditor.19 This is the true test and the only test to determine the rights of the creditor as to a priority.

3 See Sec. 330, ante.

1 Richmond v. Irons, 121 U. S. 27. But if the hank took the benefit of the transaction it ratified the transaction as a whole; the plea of ultra vires was bad. Therefore this opinion is wrong. It misses wholly this view of the matter. But Stanley

Matthews was so great a lawyer that it is wonderful to find him writing an incorrect opinion. Perhaps this view of the case may be taken. There was an implied prohibition by statute and therefore the contract of indorsement was actually illegal. See Sec. 33, ante.

2 Booth v. Wills, 42 Fed. R. 11.

3 Fletcher v. Sharpe, 108 Ind. 276; McAfee v. Bland, 11 S. W. R 439; Hawkins v. Cleveland R R. Co., 89 Fed. R 266 (C. C. A.).

4 Henry v. Martin, 88 Wis. 367.

5In re West. Ins. Co., 38 111. 289; Otis v. Gross, 96 111. 612 (as to court funds). But see District Tp. v. Farmers' Bank, 88 Iowa, 194, and State v. Thum, 55 Pac. R 858 (Idaho). In this case it will be noticed that the syllabus to the case made by the court itself misses the whole point of the decision. Judges would do well to leave this matter to a competent reporter.

6 Bayor v. Schaffner, 51 I1L App. 180. This case is affirmed in the next case following.

7 Bayor v. American Trust & Sav. Bank, 157 111. 62. The court here says that the plaintiff's evidence was perjured and then proceeds to decide the case on the theory that it was true. Such a performance cannot be said to be proper for any court.

8 People v. St. Nicholas Bank, 77 Hun, 159. Or checks agreed to be accepted. Citizens' Bank v. Bank of Greenville, 71 Miss. 271.

9 Commercial Bank V.Armstrong, 148 U. S. 50. And see Sec. 188, ante, for a full consideration of this question, and also Sec. 133. ante.

10Lanterman v. Travous, 73 111. App. 670, 174 I11. 459; Doppelt v. National Bank of Republic, 74 I1L App. 429,175 111. 432. This latter deits officers to be insolvent, are not necessarily general creditors.11 But in some jurisdictions they are held to be when the deposit becomes mingled with the bank's general funds,12 but this doctrine is a mistake.13 But general depositors in a bank not known to its officers to be insolvent are of course mere general creditors.14 So banks with mutual credits or creditors upon open account are mere general depositors.15 Where the correspondent bank credits proceeds of collections to the bank which transmitted the paper for collection to it, the relation of debtor and creditor between the two banks results.16 The same result follows where the bank transmitting paper for collection sends it to the bank on which the paper is drawn, and the latter bank credits the transmitting bank and charges the paper against the drawers.17 Even where the depositor in the bank obtains a draft from the bank by his check, and the draft is not paid, he is merely a general creditor.18 Thus, it will be seen that whatever the transaction may be, if the money or thing of value received by the bank goes rightfully into the general fund and assets of the bank, the relation resulting is one of debtor cision puts the case on the ground that the correspondent bank was a holder for value. The decision of the court upon the point in the text is therefore a bald dictum. But the other Illinois cases decide such a rule. Craigie v. Hadley, 99 N. Y. 181. But if the bank, on failure of the collection, can charge back to the depositor the check or draft not collected, what situation is the depositor in ? These cases do not seem to comprehend that phase of the question. 11 See Sec. 344, post.

12 See Sec. 344, post.

13 See the next section and Sec. 344, post.

14 Deposits in insolvent banks are trust funds only when the bank is known to its officers to be insolvent.

15Faulker v. Union Banking Co., 6 Wkly. Notes Cas. 109. Unless the priority is given by statute. In re Patterson, 18 Hun, 221,78 N. Y. 608; Rosenblatt v. Manufacturers' Bank, 69 N. Y. 358.

16 See Sec. 189, ante. Commercial Bank v. Armstrong, 148 U. S. 50; Bowman v. First Nat. Bank, 9 Wash. 614; Sunderlin v. Mecosta Sav. Bank, 74 N. W. R. 478. This' last case is an authority for the proposition that when a collection is made the relation of debtor and creditor results as to the depositor for collection.

17 See Sec. 189, ante.

18 People v. Merchants' Bank, 78 N. Y. 269.