In discussing the nature of the undertaking assumed by a bank upon the deposit of paper for collection, it was pointed out that, when paper requiring collection is deposited, the transaction might be a sale to and a purchase by the bank of the paper. In such a case there is no doubt that if the transaction was really a sale or was so treated by the parties, it will be held re Johnson, 103 Mich. 109; Harrison v. Smith, 83 Mo. 210; Stoller v. Coates, 88 Mo. 514.

5 In re Johnson, 103 Mich. 109. And see notes 11 and 12 to preceding section.

6 Lanterman v. Travous, 73 I11. App. 670, citing other Illinois cases.

7 Merchants' Nat. Bank v. School District, 94 Fed. R. 705. And see National Bank v. Lattimer, 67 Fed. R.27.

8 Downing v. Lillyett, 36 S. W. R

890. There was no intention here to make a special deposit.

9Moreland v. Brown, 86 Fed. R 257. And see Massey v. Fisher, 62 Fed. R 958.

10 Anderson v. Pacific Bank, 112-Cal. 598.

11In re Johnson, 103 Mich. 109.

12 In re Commercial Bank, 2 Ohio Dec. 304.

13 See Sec. Sec. 162, 163, ante. And see Venner v. Cox, 35 S. W. R 769; Bayor v. Am. Trust and Sav. Bank, 157 111. 62.

1 Taft v. Quinsigamond Bank, 52 N.E.R 387.

2 See Sec. Sec. 133 and 188, ante; Henderson v. O'Conor, 106 Cal. 385.

3 See the references in preceding note and Continental Bank v. Weems, 69 Tex. 489; Peak v. Elli-cott, 30 Kan. 156; Ellicott v. Barnes, 31 Kan. 170.

4 See the references in notes 2 and 3 preceding, and Wallace v. Stone, 107 Mich. 190; Griffin v.

Chase, 36 Neb. 328; First Nat. Bank v. Sanford, 62 Mo. A pp. 394; Anheuser-Busch Ass'n v. Morris, 36 Neb. 31; People v. Dansville Bank, 39 Hun, 187; Hunt v. Townsend,26 S.W. R.310.

5 Anheuser-Busch Ass'n v Clayton, 56 Fed. R. 759. And see Sec. Sec. 133, 187, 188, ante.

6 See Sec. Sec. 133 and 188, ante.

7 Evansville Bank v. Germ. Am. Bank, 155 U. S. 556; Beal v. Somer-ville, 50 Fed. R, 647.

8 Evansville Bank v. Germ. Am. Bank, 155 U. S. 556.

9 This, of course, must be the result. There is no payment. Crane v. Fourth Street Bank, 173 Pa. 556, carries this idea too far, for there was a payment.

10 See Sec. Sec. 187,188,189 and 190, ante, and Commercial Bank v. Armstrong, 148 U. S. 50; Beal v. Somer-ville, 50 Fed. R. 647.

11 See Levi v. National Bank, 5 Dill. 104. This applies even to a deposit for credit.

12See Sec. 189, ante. This only can apply as to a deposit for credit. Where the indorsement is to the first bank for collection the second bank has no claim.

13 The form of the indorsement is notice to every other bank that the collection does not belong to the first bank. Evansville Bank v.

Germ. Am. Bank, 155 U. S. 556. See Sec. 189, ante. This only can apply as to a deposit for credit. See the preceding note.

14 See Sec. 189, ante, and Comm. Bank v. Armstrong, 148 U. S. 50; and see the preceding note.

15 See Sec. 181, ante, for those jurisdictions. The transmitting bank could claim the priority unless cut off by the insolvent bank's set-off or lien.

16 This follows because his claim is simply one for damages.

17 If the bank has received the proceeds by credit to it or set-off against it, the money has been received by it, and the depositor has a priority or has the claim of a general creditor as determined by his contract with it. See notes 4 and 5 to this section.

18 See Sec. 181, ante, for those states.

19 This is the custom. But if the indorsement is for collection and credit by the first bank to the second bank, and the second bank fails with the proceeds in its hands, the first bank is a general creditor, but the owner of the collection can hold the first bank.

20 See Sec. 188, ante, and cases in note 4, supra, not a general creditor. If the proceeds reach that bank after its insolvency, its power to collect being ended, the owner of the collection has a priority upon the funds of the bank.27 If the funds are in the hands of a correspondent bank he may claim them from that bank as a priority if it is in solvent,28 provided that bank has no lien upon the proceeds or right of offset against the bank transmitting to it.29 In this latter case he may hold the bank in which he deposited for its agent's default in most jurisdictions,30 but in other jurisdictions he cannot;31 but the primary bank having received the deposit by set-off or credit, he has the right to recover from it; but if it is insolvent, he is merely a general creditor.32 But in some states the rule is held that a deposit for credit passes title in the paper to the bank, where the depositor has the privilege of checking against it,33 and hence the depositor in such case becomes a mere general creditor of the first bank upon the deposit.34 He could not reach the proceeds in the hands of a correspondent bank35 so as to claim any priority at all. In such jurisdictions, if the correspondent bank fails with the proceeds of a collection in its custody, the transmitting bank must enforce the priority against the correspondent bank.36 In such cases also the doctrine is held by some courts that the proceeds of the bank upon being mingled with its general funds lose their right of priority, and in consequence the person or bank claiming the priority becomes a mere general creditor.37 But the better rule is otherwise even as to bailments, because a bailment presents a case of a fiduciary relation giving rise in equity to a trust.38

21 This applies as between the owner and the primary bank, where that is insolvent The same principle applies as between the primary bank and the secondary bank, where the latter is insolvent, with the proceeds in its hands.

22 See note 8, supra.

24 See Sec. 341, note 12; Bowers v. Evans, 71 Wis. 133 (now wrongly overruled); Windstanley v. Second Nat. Bank, 13 Ind. App. 544. _

25 See Sec. 133, ante.

26 See Sec. Sec. 133,187 and 188, ante.

27 Beal v. Somerville, 50 Fed. R. 647, 5 U. S. App. 14.

28 Evansville Bank v. Germ. Am. Bank, 155 U. S. 556. In this case the form of the indorsement was not for credit, but for collection, yet the court recognizes the principle. The case cited in the last note states the principle in its best form.

29 See notes 12,13 and 14 to this section, 30 See Sec. 181, ante.

31 See Sec. 181, ante,

32 This is said on the assumption tliat the deposit was simply for credit without there being any course of dealing or understanding to control the effect of the indorsement. See Sec. 188, ante. But if the credit be given by the secondary to the primary bank, it is an absolute nullity, if that bank had notice of the preliminary bank's insolvency. If it had not notice the owner can claim the proceeds from that bank in spite of the credit. Germ. Am. Bank v. Third Nat. Bank, 5 Dill. 104; Evansville Bank v. Germ. Am. Bank, 155 U. S. 556; Beal v. Somerville, 50 Fed. R. 647; Jones v. Kil-breth, 49 Ohio St. 401. Or he can claim the remittance received. Beal v. Somerville, supra.

33 See Sec. 133, ante.

34 This rule places the depositor in the situation that if the second bank fails the primary bank has the priority. If the primary bank fails it has a claim in full against the secondary bank, but the depositor is only a general creditor of the primary bank, and all the time the collection, if not made, can be charged back against him.

35 He has no title.