remitted for collection to the credit of the other on a subsisting indebtedness which it happens at the time to have standing against the other, there is no such lien and no right to retain and apply the money collected in that manner, but the real owner of the funds may maintain an action to recover the amount." In the case of the First National Bank of Clarion v. Gregg & Co., 79 Pa. St. 384, the rule as stated is as follows: "A note was made to plaintiff's order, endorsed by him and sent through the house of Brady, a banker, for collection by him, endorsed to the defendant, a bank, for collection and credit. Held, that Brady by the endorsement did not become the owner of the note and had no right to pledge it, or direct its proceeds to be credited to him in payment of his indebtedness to the defendant." Mr. Justice Williams, in delivering his opinion, says: 'Brady & Co. did not become the owners of the note by the plaintiff's endorsement and delivery of it to them for collection, and they had no right to pledge it or direct its proceeds to be placed to their credit in payment of their indebtedness to the bank. It is true that they were the apparent owners of the note, and in the absence of notice of the plaintiff's title the bank had the right to treat them as the real owners. If it had made advances or given new credits to Brady & Co., on the faith of the note, it would undoubtedly be entitled to retain the amount out of the proceeds, but just at this point the defense wholly fails. The affidavit of the cashier does not show that the bank made any advances or gave any new credits on the faith of the note, nor does it show that it incurred any liability or did anything by which its condition is worse than it could have been if it had not received the note for collection and credit, or that it will suffer any loss or damage if the credit is not allowed. If so, the bank has clearly no equity which entitles it to withhold the proceeds from the owners of the note." In the case of Lawrence and Another v. The Stonington Bank, 6 Conn. 521, the court holds that: * * a custom among banks of transmitting bills and notes from each to the other for collection, and when paid of passing the avails to the credit of the bank so transmitting them, and to the debt of the bank so receiving them, cannot affect the claim of a third person to the avails of a bill which he has committed to one of them for collection." The court in the above case, in discussing a banker's lien, says: "In Jourdaine v. Lefevre et al., 1 Esp. Rep. 66, it was said by Lord Kenyon that a banker had a lien on a note paid into his house and, of course, a right to retain it for his general balance. The doctrine more clearly appears from the case of Davis and Al. Bowsher, 5 Tenn. Rep. 488: 'A customer lodges Lills of exchange in the hands of his banker generally, and when the banker advances money to him he applies it to the discount of such of the bills as happen to be nearest in value to the sum advanced, but without any special agreement to that effect. This does not invalidate the banker's general lien upon all of the other bills in his hands, but he may retain them in order to secure the payment of his general balance."" A bank cannot acquire a lien against a specific or special deposit. A bank holding securities assigned to it by a partnership cannot in any event apply money belonging to one of them, to the satisfaction of a debt due by the other, without the consent of the former.7 The deposit of funds in the name of a person as trustee cannot be apportioned or applied by the bank to the payment of his individual indebtedness to the bank.8 In the case of Hodgins v. Bank, 124 N. C. 540, the rule as to the right of the bank to apply the deposits of a surviving partner to cancel the debts of the former is stated as follows: "A bank has the right to apply the debt due by it for deposits to any indebtedness by the depositor in the same right to the bank, provided such indebtedness to the bank has matured." 6 Fitzgerald r. State Bank, 64 Minn. 469; Bank v. Ins. Co., 104 U. S. 54; Judy v. Farmers' and Traders' Bank, 81 Mo. 404. 7 Bank of Lagrange r. Calter, 101 Ga. 134; Dawson et al. . Real Estate Bank, 5 Pike (Ark.), 283; Ferry v. Home Savings Bank, 114 8 Bundy r. Town of Monticello, 84 Ind. 119; National Bank r. Ins. Co., 104 U. S. 54; Clemer r. Drovers' Nat. Bank, 157 Ill. 206; Preston v. Prather, 137 U. S. 604. CHAPTER XLI. STATUTE OF LIMITATIONS. § 312. Runs against checks, when. In the absence of a statute of a State declaring that the statute of limitations shall not run against money deposited in the bank, the rule is that the statute begins to run against the liability of the bank from the time a demand for payment is made.1 A delay to call for a deposit for a period of six years from the time the money was placed in the bank is not a bar to a right of action against the banker.2 Where a bank holds funds of a depositor subject to call, the contract is one to pay on demand, and the statute does not begin to run until demand.3 A certification of a check by the bank does not change the rule. The statute does not begin to run until after demand. It is also claimed that the statute does not begin to run until demand is made by owner of bank stock for dividends. § 313. Runs against certificates of deposits, when. A certificate of deposit is, by the courts, declared to be in legal effect a promissory note; and the statute of limitations, if such is the law, begins to run immediately, and no demand is necessary. In the case of Mitchell v. Easton, 37 Minn. 335, the court says, in discussing the question of the statute of limitations in a suit brought upon an instrument designated as a certificate of deposit which is in the words and figures following: "Mower County Bank, Austin, Minn., March 29, 1876. "L. S. Mitchell, Esq., has deposited in this bank seven hundred fifty and no-100 dollars, payable to the order of himself, in current bank notes, on the return of this certificate properly indorsed, with interest at the rate of ten per cent. per annum. "SMITH, WILKINS & EASTON." 139 Pa. St. 92. 2 Girard Bank v. Bank of Penn Township, 39 Pa. St. 92. 3 Starr v. Stiles, 19 Pac. Rep. 225. "The defendants received the money of the plaintiff, and, by the instrument sued on, promised and agreed to repay it, with interest, and by placing their obligation in this form they manifest an intention to change the character of the transaction from that of an ordinary deposit to that of a debt or loan evidenced by an instrument construed to be a promissory note payable on demand. If the parties desired to place any other or further limitation upon the rights or obligations of either, it should have been expressed upon the face of the instrument. "Upon the question under discussion it is admitted that the authorities differ. In New York the cases indicate much conflict of opinion. Some of them hold that such certificates are promissory notes; others mere receipts or written evidences of a deposit, and as such continuing securities, which, though negotiable, are not dishonored until after an actual demand. See National Bank of Fort Edward v. Washington County Bank, 5 Hun, 605. But if they are promissory notes payable on demand, then, under the statute above referred to, they would be dishonored after sixty days. But this could not consistently be the case if the paper was not due until an actual demand. But it is manifestly the better rule in practice to hold that such demands become stale and outlawed unless collected or sued within six years. Brummagin v. Tallant, 29 Cal. 503 (89 Am. Dec. 61); Tripp v. Curtenius, 36 Mich. 494; Curran v. Witter, 68 Wis. 16 (31 N. W. Rep. 705).” The general rule is that a certificate of deposit, if a promissory note and payable on demand, is due immediately without any actual demand, and that the statute begins to run at once.* The statute begins to run when a right of action accrues.5 Where the courts hold that a certificate of deposit is not in legal effect a promissory note, the certificate becomes due (unless a date is fixed) from the date of demand, and the statute does not begin to run until demand is made. The Supreme Court of the State of Massachusetts, in the case of Shute v. Pacific Nat. Bank, 136 Mass. 487, holds that a certificate of deposit issued by a national bank is not a 4 Brummagin v. Tallant, 29 Cal. 503; Cousins v. Partridge, 79 Cal. 228; Story on Promissory Notes, § 29; Angell on Limitations, § 59; Wood on Limitations, § 124. 5 Jones v. Nicholl, 82 Cal. 32. promissory note within the meaning of the General Statutes, chapter 53, section 10. It is also held by the same authority, that a certificate of deposit is not due until a demand is made and the certificate returned or tendered." § 314. Statute runs against stockholder's liability, when. In a suit by a receiver of an insolvent national bank to collect an assessment authorized by the Comptroller of the Currency, upon the stock from a stockholder who has made a fraudulent transfer of his shares, is based upon the statutory liability of the stockholder, and the statute begins to run from the date the assessment becomes due. The statute begins to run from the accrual of the liability." When a bank fails and its assets are insufficient to pay off all of its liabilities, the stockholders become liable for such deficiency to the extent provided (if a national bank by the statute of the United States, if a State bank by the statute of the State), and no limit of time being prescribed by the Federal Statutes within which an action must be brought to enforce an assessment against a stockholder, such an action is governed, as to limitation, by the statute of the United States. But see Aldrich v. Skinner, 98 Fed. Rep. 345. The court here holds that the statute of the State where the action is brought governs. In a very late case the Supreme Court of the United States has decided that the Statute of Limitations of a State is no defense to an action brought by the receiver of a failed national bank against its stockholders. Chief Justice McKenna, in rendering the opinion of the court in the case of Rankin, Receiver of the Hutchinson National Bank v. Edward E. Bartin, a stockholder, says: "We think the Kansas Supreme Court overlooked the of ficial character and power of the Comptroller of the Currency and the decisions of this court declaring them. A national bank is an instrumentality of the United States, its circulating notes 6 Bellows Falls Bank v. Rutland County Bank, 40 Vt. 377; Monger v. Albany City Bank, 85 N. Y. 580. 7 Thompson v. German Ins. Co., 77 Fed. Rep. 258; Godfrey v. Terry, 97 U. S. 171. |