An obligation, which, on account of the time elapsed since it was incurred, or since any payment of either principal or interest has been made thereon, cannot legally be collected, is said to be "outlawed." That is to say, the statutes of limitations provide in each State the length of time during which legal action may be taken to collect a claim; neglecting so to do within the time fixed deprives one of his right to collect. A recent court decision of interest to the holders of national bank stocks is given under the last paragraph of the subject "Double Liability."
Out-of-Town Checks. A check drawn on a bank situated without the city in which a certain clearing-house is located, is an " out-of-town check " to that clearing-house. That is to say, it is a check that cannot be collected through the ordinary machinery of that clearing-house, but must be sent away for collection.
Out-of-Town Clearings. In England, each country bank has a running account with some London bank, and all the city banks daily settle transactions with each other through the clearing-house. Therefore, the payment from any part of the country to any other part can be accomplished through London.1 By this, supposing the reader to be familiar with the subject " Clearing-house," "out-of-town clearings" may be understood.
The " out-of-town clearing " system is also explained under "Foreign Department Boston Clearing-house Association."