stop payment by notice.51 In the case of a bill of exchange, the rule appears to be that the order to accept is not revoked by the drawer's death.52 In jurisdictions where a check operates as an assignment, it seems that the death of the drawer would not work a revocation; 53 but a decision based on the assignment theory would not be any authority in other jurisdictions.54

Whatever may be the duty and authority of the bank, the holder has, of course, a right to recover against the drawer's

estate.

Insanity of Drawer

It seems that an adjudication of the drawer as insane will revoke the authority of the bank to pay a check. 55 But otherwise, where a deposit is made when the depositor is sane, the bank may pay the check at any time, in the absence of knowledge of his incapacity at the time of payment.56

Signature of Check

In order to authorize a bank to apply the funds of a depositor to the payment of a check, the check must, of course, be

Drawer of a Check," by John Maxey Zane. See "Banks and Banking," Dec. Dig. (Key No.) § 139; Cent. Dig. §§ 406–409.

51 Weiand's Adm'r v. State Nat. Bank of Maysville, 112 Ky. 310, 65 S. W. 617, 66 S. W. 26, 56 L. R. A. 178. See "Banks and Banking," Dec. Dig. (Key No.) § 139; Cent. Dig. §§ 406–409.

52 See Billings v. Devaux, 3 Man. & Gr. 565; Cutts v. Perkins, 12 Mass. 206; 14 Harv. Law Rev. 588. Cf. Negotiable Instruments Law, $ 185. See "Banks and Banking,” Dec. Dig. (Key No.) § 139; Cent. Dig. §§ 406-409.

53 See Lewis v. International Bank, 13 Mo. App. 202 (the assign ment theory no longer prevails in Missouri); Wasgatt v. First Nat. Bank (Minn.) 134 N. W. 224. See "Banks and Banking," Dec. Dig. (Key No.) § 139; Cent. Dig. §§ 406–409.

54 Ante, p. 127.

55 American Trust & Banking Co. v. Boone, 102 Ga. 202, 29 S. E. 182, 40 L. R. A. 250, 66 Am. St. Rep. 167. Sce "Banks and Banking," Dec. Dig. (Key No.) § 139; Cent. Dig. §§ 406-409.

56 Reed v. Mattapan Deposit & Trust Co., 198 Mass. 306, 84 N. E.

58

the check of the depositor." If a check be drawn in the name of a depositor, but his signature was forged, or if his signature purports to be made by an agent, but the signature was unauthorized, the rights of the drawer are unaffected by the payment.

59

61

If an account stands in the name of joint depositors, the bank must require the signatures of all; but if the account stands in the name of a partnership, the firm signature made by one partner is sufficient. If an account is in the name of a corporation, the signature must be made by an officer who is authorized to sign. It is customary for banks to require a depositor to file his signature, or the signature of such other persons as are authorized to sign, and in such case,

62

469. See "Banks and Banking," Dec. Dig. (Key No.) §§ 138, 139; Cent. Dig. §§ 398-409.

57 Fricano v. Columbia Nat. Bank, 118 App. Div. 567, 103 N. Y. Supp. 189.

A bank which pays as garnishee under execution against a judgment debtor other than its depositor, though bearing the same name, is liable to the depositor. O'Neil v. New England Trust Co., 28 R. I. 311, 67 Atl. 63, 11 L. R. A. (N. S.) 248, 125 Am. St. Rep. 740. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398– 405.

58 Post, p. 160.

59 Post, p. 160.

A deposit may be made under such circumstances that the depositor is estopped from denying the authority of another to sign checks in the depositor's name. Tobias v. Morris, 126 Ala. 535, 28 South. 517. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398-405.

60 Columbia Finance & Trust Co. v. First Nat. Bank, 116 Ky. 364, 76 S. W. 156; Nieman v. Beacon Trust Co., 170 Mass. 452, 49 N. E. 748, 64 Am. St. Rep. 315. See "Banks and Banking," Dec. Dig. (Key No.) 138; Cent. Dig. §§ 398-405.

61 Carr v. Fidelity Bank, 126 N. C. 186, 35 S. E. 246. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398–405.

62 First Nat. Bank of Allegheny v. Joseph Fleming & Son Co., 226 Pa. 416, 75 Atl. 718.

Where there are no circumstances to excite suspicion, the bank is not responsible if the money is misappropriated. Hatch v. Johnson

63

where the signature is actually by a person so authorized, the bank will be protected. On the other hand, if a depositor instructs the bank to pay no checks not signed or countersigned by designated persons, and the bank disregards the instruction, the burden is upon the bank to show that the depositor actually received the benefit of the payment.“*

Conformity to Order

In order to give the bank the right to charge a payment to the depositor's account, the payment must be made in conformity with the order contained in the check.65

The bank must at its peril ascertain that the person presenting the check is a person authorized thereby to receive payment. If the check is payable to order, payment must be

Loan & Trust Co. (C. C.) 79 Fed. 828. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398-405.

63 Shoe Lasting Mach. Co. of New York v. Western Nat. Bank, 70 App. Div. 588, 75 N. Y. Supp. 627. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398-405.

64 Ellis v. Western Nat. Bank, 136 Ky. 310, 124 S. W. 334; Gladstone Exch. Bank v. Keating, 94 Mich. 429, 53 N. W. 1110; Shoe Lasting Machine Co. of New York v. Western Nat. Bank, 70 App. Div. 588, 75 N. Y. Supp. 627.

Where the deposit was by a receiver of a corporation appointed by an order of court which provided that the funds should be paid out only on checks countersigned by the judge, of which the bank had knowledge, the bank was liable to creditors of the corporation for funds paid out on checks not countersigned. American Nat. Bank of Macon v. Fidelity & Deposit Co., 129 Ga. 126, 58 S. E. 867.

Where the depositor was a city, a city ordinance was not notice. City of Newburyport v. Spear, 204 Mass. 146, 90 N. E. 522, 134 Am. St. Rep. 652. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. $$ 398-405.

65 National Dredging Co. v. President, etc., of Farmers' Bank, 6 Pennewill (Del.) 580, 69 Atl. 607, 16 L. R. A. (N. S.) 593, 130 Am. St. Rep. 158; Jordon Marsh Co. v. National Shawmut Bank, 201 Mass 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250. Sce "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398–405.

66

to the payee, or one claiming under a genuine indorsement.67 If the check is payable to bearer, the bank may pay it to any person who presents it,s unless there are circumstances to put it on inquiry as to his ownership of the check or as to defects in his title. The Negotiable Instruments Law provides that an instrument is payable to bearer "when it is payable to the order of a fictitious or nonexisting person, and such fact was known to the person making it so payable." TO

69

The bank must observe the order in respect to the time of payment. If the check be postdated, payment before the

date is unauthorized."2

66 Murphy v. Metropolitan Nat. Bank, 191 Mass. 159, 77 N. E. 693, 114 Am. St. Rep. 595; Lonier v. State Savings Bank, 149 Mich. 483, 112 N. W. 1119.

The fact that the payee is dead when the check is drawn does not entitle the bank to pay to any other than his personal representative. Murphy v. Metropolitan Nat. Bank, supra. See "Banks and Banking," Dec. Dig. (Key No.) §§ 138, 140; Cent. Dig. §§ 398–405.

67 Western Union Tel. Co. v. Bi-Metallic Bank, 17 Colo. App. 229, 68 Pac. 115; Jordan Marsh Co. v. National Shawmut Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250; United Security Life Insurance & Trust Co. of Pennsylvania v. Central Nat. Bank, 185 Pa. 586, 40 Atl. 97; post, p. 171. See "Banks and Banking," Dec. Dig. (Key No.) 138; Cent. Dig. §§ 398-405.

68 Peerrot v. Mt. Morris Bank, 120 App. Div. 247, 104 N. Y. Supp. 1045; Farmers' & Merchants' Bank v. Bank of Rutherford, 115 Tenn. 64, 8S S. W. 939, 112 Am. St. Rep. 817. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398-405.

69 See Wedge Mines Co. v. Denver Nat. Bank, 19 Colo. App. 182, 73 Pac. 873; Negotiable Instruments Law, § 88. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398-405.

70 Negotiable Instruments Law, § 9(3); post, p. 173.

71 Ante, p. 151.

72 Godin v. Bank of Commonwealth, 6 Duer (N. Y.) 76. See "Banks and Banking," Dec. Dig. (Key No.) § 138; Cent. Dig. §§ 398–406.

FORGED CHECKS

43. SIGNATURE OF DRAWER FORGED-Where the drawee bank pays a check upon which the signature of the drawer was forged, the bank cannot charge the payment to his account, unless he by his conduct has precluded himself from contesting the right of the bank to make the payment or to charge his account. Nor can the bank, although it paid the check in ignorance of the forgery, recover back the amount from the person to whom it has been paid, if he was a bona fide holder of the check, unless by bad faith or misconduct he contributed to the success of the fraud or to the mistake under which the payment was made.

44. ALTERED CHECK-Where the drawee bank pays a check which was altered after its issue, the bank cannot charge the payment to the account of the drawer, unless by his conduct he has precluded himself from contesting the right of the bank to make the payment or to charge his account. The bank may recover back the amount from the person to whom it was paid, although he was a bona fide holder of the check.

45. FORGED INDORSEMENT-Where the drawee bank pays a check to one who is not entitled to receive payment because of a forged indorsement, the bank cannot charge the amount to the account of the drawer, unless by his conduct he has precluded himself from contesting the right of the bank to make payment. The bank may recover back the amount from the person to whom the payment was made.