money actually reaches the proper officer and is credited to the depositor, the bank is liable.** The deposit must be made at the bank; but a deposit elsewhere is good, if the bank receives it or ratifies it.4°

Entry in Pass Book

It is usual for the customer of a bank to have a bank book or pass book, and to present it when making a general deposit, for the purpose of having the amount and date of the deposit entered by the receiving teller or other officer receiving it. Such entry in the usual form, crediting the depositor, does not constitute a written contract between the parties, but is merely prima facie evidence, in the nature of a receipt for

Sterling v. Marietta & S. Trading Co., 11 Serg. & R. (Pa.) 179. See Hotchkiss v. Artisans' Bank, *41 N. Y. 564. See, also, Kelley v. Chenango Valley Savings Bank, 22 App. Div. 202, 47 N. Y. Supp. 1041.

*

Where a customer, who had overdrawn his account, received a request from the paying teller to call, and at his request paid him over the counter the amount in excess of the overdraft, it not appearing that the receiving teller was present, and it appearing that in his absence the other officers acted in his place, it was held payment to the bank. The court said: "When one finds behind the counter one of its officers employed in its business, and upon his demand pays a debt due the bank in good faith, without any knowledge that the officer's authority is so limited that he has no right to receive it, he must be protected, and the bank must be bound by the payment." East River Nat. Bank v. Gove, 57 N. Y. 597. See, also, Second Nat. Bank v. Averell, 2 App. D. C. 470, 25 L. R. A. 761. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. §§ 293-302.

44 Dougherty v. Vanderpool, 35 Miss. 165; Thatcher v. Bank of State of New York, 5 Sandf. (N. Y.) 121. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. §§ 293–302.

45 Demarest v. Holdeman, 34 Ind. App. 685, 73 N. E. 714; Morse, Banks & B. (4th Ed.) § 168. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. §§ 293–302.

46 Jumper v. Commercial Bank of Columbia, 48 S. C. 430, 26 S. E. 725. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. 293–302.

a deposit, and may be explained or contradicted by oral testimony. Of course, a pass book is not negotiable. It is usual for the depositor to write the items of his deposit, with

47

48

47 Bank of Lawrenceville v. Rockmore & Co., 129 Ga. 582, 59 S. E. 291; Talcott v. First Nat. Bank, 53 Kan. 480, 36 Pac. 1066, 24 L. R. A. 737; Follansbee v. Parker, 70 Ill. 11; French v. Eastern Trust & Banking Co., 91 Me. 485, 40 Atl. 327; President, etc., of Union Bank v. Knapp, 3 Pick. (Mass.) 96, 15 Am. Dec. 181; Davis V. Lenawee Co. Sav. Bank, 53 Mich. 163, 18 N. W. 629; Branch v. Dawson, 36 Minn. 193, 30 N. W. 545; Quattrochi v. Farmers' & Merchants' Bank, 89 Mo. App. 500; Mechanics' & Farmers' Bank v. Smith, 19 Johns. (N. Y.) 115; Bruen v. Hone, 2 Barb. (N. Y.) 586; Greenhalgh Co. v. Farmers' Nat. Bank, 226 Pa. 184, 75 Atl. 260, 134 Am. St. Rep. 1016.

It has been held that, if the deposit be entered when made, the entry is original and binding on the bank; but if the entry be afterwards made by copying from the books of the bank, it could be questioned. President, etc., of Manhattan Co. v. Lydig, 4 Johns. (N. Y.) 377, 4 Am. Dec. 280. See, also, Hepburn v. Citizens' Bank of Louisiana, 2 La. Ann. 1007, 46 Am. Dec. 564; Mechanics' & Traders' Bank v. Banks, 11 La. 261.

Though a deposit be not entered in the books of the bank till five days after its entry in the pass book, the deposit must be held to have been made at the date of the entry in the pass book. Wasson v. Lamb, 120 Ind. 514, 22 N. E. 729, 6 L. R. A. 191, 16 Am. St. Rep. 342.

A depositor, failing to examine his pass book, is not thereby estopped to claim that the amount entered was too small, unless the bank was prejudiced by the neglect. Kemble v. Nat. Bank of Rondout, 94 App. Div. 544, 88 N. Y. Supp. 246, affirmed 183 N. Y. 545, 76 N. E. 1098.

But where a debtor, D., applied for credit to a bank for the amount of the debt, promising to deposit in a few days, and the credit was given, and D. took a deposit slip and pass book in the name of A., his creditor, and delivered them to him in payment of the debt, the transaction was a loan by the bank to D., and a deposit of the amount by A., and D.'s failure to deposit could not affect A.'s rights. Andrews v. State Bank of Wheatland, 9 N. D. 325, 83 N. W. 235. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. § 300.

48 Witte v. Vincenot, 43 Cal. 325; Stewart v. State, 42 Tex. 242. See "Bills and Notes," Dec. Dig. (Key No.) § 151; Cent. Dig. § 383

his own name as depositor, upon a deposit slip, and to hand it in with the pass book, in which the total amount of the deposit is entered by the teller; the book being returned, but the deposit slip being retained by the bank, to guide it in making the proper entries in its own books. Sometimes, for convenience, as where the depositor has failed to bring his pass book to the bank, a duplicate deposit slip, in the nature of a receipt for the deposit, is delivered to the depositor. Such a deposit slip is the equivalent of an entry of the deposit in the book, and is prima facie evidence of the deposit.50

49 Where plaintiff, having checks to deposit, handed them in with his pass book and a deposit slip, erroneously headed with the name of another customer, and the teller entered the amount in the pass book and returned it, and later from the deposit slip the amount was entered in the ledger to the credit of the other customer, it was held that, the pass book not constituting the account and being open to explanation, and the effect of handing in the slip being a direction to credit the other customer, so that the relation of debtor and creditor was not created between plaintiff and the bank as to such deposit, and the first act of negligence, leading to the error, if negligence be considered, having been that of plaintiff, he could not recover of the bank on account thereof. Schwartz v. State Bank, 135 App. Div. 42, 119 N. Y. Supp. 763. Cf. Jackson Ins. Co. v. Cross, 9 Heisk. (Tenn.) 283. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. §§ 293–302. 50 Weisinger v. Bank of Gallatin, 10 Lea (Tenn.) 330; First Nat. Bank of Union Mills v. Clark, 134 N. Y. 368, 32 N. E. 38, 17 L. R. A. 580 (holding that the delivery by the depositor to a third person of a deposit slip in which a bank acknowledged receipt of a deposit did not operate as an assignment of the deposit).

A deposit slip or receipt issued by the cashier upon a specific deposit is prima facie evidence of the liability of the bank. American Nat. Bank of Arkansas City v. Presnall, 58 Kan. 69, 48 Pac. 556. See "Banks and Banking," Dec. Dig. (Key No.) § 121; Cent. Dig. § 293-302.

DEPOSIT OF PAPER

9. DEPOSIT FOR COLLECTION-Where checks, bills, notes, or other negotiable instruments are deposited with a bank for collection, the ownership of the paper is not transferred; but the bank holds it as agent or trustee of the depositor until collection, and upon collection, unless it be otherwise agreed, by the weight of authority becomes debtor to the depositor for the amount collected, as upon a general deposit. A deposit is one for collection, if the indorsement of the paper so indicates, and also, if the parties so agree, although the paper be not thus restrictively indorsed, but is indorsed generally, either by a special or a blank indorsement, or, being payable to bearer is transferred by delivery.

10. SALE OR DEPOSIT FOR COLLECTION-When a negotiable instrument is indorsed generally, or, being payable to bearer, is delivered to and deposited with a bank, the transaction may be a sale of the paper or a deposit for collection, according to the agreement of the parties. If the paper is credited by the bank to the depositor as cash, the rule prevails generally that, unless a different understanding affirmatively appears, the beneficial ownership of the paper, as well as the legal title, is transferred to the bank, which thereupon becomes a debtor to the depositor for the amount, as upon a general deposit of money, or, in other words, that the transaction is a sale of the paper; but by some courts it is held that, unless it affirmatively appears that the credit is irrevocable by the bank, the transaction is a deposit for collection.

11. CHECK ON DEPOSITORY-Where a check on the depository bank is deposited, the transaction is in effect a presentment of the check for payment, and if the bank unconditionally credits the amount to the depositor, it thereupon becomes a debtor for the amount as upon a general deposit of money.

In General

51

Where checks, bills, notes, or other negotiable instruments are "deposited," using the term somewhat loosely, with a bank, the transaction may take one of several different forms, according to the circumstances of the case. It may take the form of a deposit for collection, in which case the ownership of the paper is not transferred to the bank, which holds the paper as agent or trustee for the depositor until collection, and does not become a debtor to the depositor until it has made the collection. Or the transaction may take the form of a sale of the paper by the depositor to the bank in exchange for credit given to him by the bank, in which case the paper becomes the absolute property of the bank, which thereupon owes the amount credited to the depositor as upon a general deposit of money.52 Or the transaction may be a deposit of a check upon the depository bank, in which case, if it gives the depositor credit for the amount, it thereby in effect pays the check, and becomes a debtor for the amount as upon a general deposit of money. The principles which determine the legal effect of these transactions are clear, but the application to particular cases is often difficult, for the reason that the agreement of the parties may not be expressed, and must be inferred from their acts and from other circumstances. Deposit for Collection

Where paper is deposited for collection, the nature of the transaction may be indicated by the indorsement. An indorsement "for collection" is restrictive, and does not vest the

51 Post, p. 30.

52 Post, p. 33.

53 Post, p. 38.