Question 337. - Mr. X is a customer of bank A. He has deposited in bank A a cheque of $5,000 drawn on bank B at such-and-such a place. A's correspondent at this place is bank C. Bank C sent cheque to bank B and received payment on the same date. Bank C has failed the same day. Can the person who has deposited cheque for $5,000 recover the amount from his bank, the remittance not having been made by the bank which has failed?

Answer. - It is now generally conceded that in such circumstances the collecting bank is the agent of the bank which employs it, not the agent of the latter's customer, so that if the agent collects money belonging to the customer and fails to account for it, the customer's bank is liable to him for the amount. (See Falconbridge on Banking, page 186).