right itself is barred. We need not discuss here the effect of a statute which bars the right as well as the remedy for enforcing that right. When the creditor has the right to sue, from that date the time is reckoned; then the Statute of Limitations commences to run.

156. Demand Must be Made Before Statute Will Run. -As the contract by the bank is that it will pay on demand, it is generally held that a demand upon the bank, for payment, is necessary before suit can be brought against the bank. And until a demand is made the Statute of Limitations does not begin to run. In some states it is held, however, that where a statement of account is rendered by the bank (and return of pass book balanced is regarded as such statement) the depositor has a right against the bank from that date for that amount, and that at that time the statute begins to run. As the depositor has not demanded payment by leaving his book for balance, and as the money is not due until a demand of payment, no action could be brought before demand against the bank, and the statute ought not to be held to run until there has been a demand. The return of pass books balanced is in no sense a refusal by the bank to pay the balance; and the courts in the majority of states hold that there must be a demand upon and refusal by the bank before the statute commences to run. When the depositor does not object to the amount as shown by his pass book when balanced, of course, it would be reasonable to hold that he could not bring suit for the difference between that amount and what he claims it should be after several years, where he has been negligent.

157. No Demand Necessary Where Bank Commits Wrong. Of course, if the bank commits a wrong it is liable to suit as soon as the wrong is perpetrated, and the statute begins to run at once, without demand. Having done a wrong, the bank has waived the demand. If the

bank notifies the depositor that it claims the money, or that it will not pay his checks, or if it fails, no demand is necessary. Otherwise demand should always be made upon a bank before suit is brought for recovery of a deposit.

158. Against Drawer of Check.-Where a drawer has no funds in bank and gives a check, he commits a wrong, and no demand need be made on him before the right to bring an action accrues, and therefore the Statute of Limitations commences to run as against him as of the time payment is refused. See Sec. 194.

159. Where Bank Refuses Payment.—The right to sue a bank for dishonoring a check accrues as soon as the refusal has been made upon demand or presentation of a proper order, and the statute commences to run from the date of the refusal.

As against Certificates of Deposit, see Sec. 49; certified check, 128.

160. Payment by Mail.-If A requests the bank to send him a check, currency, exchange, etc., by mail, A makes the mail his agent, and if the bank sends it in the manner requested, the bank will be discharged as soon as the item is deposited in the mail addressed as A directed. So if A requests that it be sent by express, or in any other manner, strict compliance with directions releases the bank as soon as the item is delivered to the carrier designated or his agent. The bank's duty is to pay the depositor at the bank. If the depositor asks for transmission of money without naming the carrier to be used, any safe method used by the bank will discharge it from further liability. Currency, paper negotiable by delivery, or coin should be registered or sent by express. The bank must always exercise care in receiving or paying deposits.

161. Deposit Made by Mail.—When a deposit is mailed

SEC. 162

101

to the bank the depositor makes the mail his agent. The bank is in no case liable until the money is delivered to the officer of the bank, and a deposit dates from the receipt of the money.

162. Check.-If A mails a check to B, the title remains in A until the check has been delivered to B, unless B has requested it sent by mail, in which case B makes the mail his agent and delivery to the mail is delivery to B. As the debtor must seek the creditor, unless the creditor has designated an agent to act in accepting payment, payment is not made until there is a delivery to B himself. Garthwaite v. Bank of Tulare, 134 Cal., 237. See Sec. 64.

163. Interest on Deposits.-Unless there is a contract for the payment of interest, a depositor is not entitled to interest. When demand is made for a deposit, however, the money immediately becomes due and if the bank fails to pay, it is liable for interest at the legal rate. Lowndes v. City Nat. Bk., 72 Atlantic Rep., 150. When a bank fails, the suspension renders it impossible to perform its duty to pay if demand is thereafter made, and no demand need be made. The suspension is equivalent to a demand and refusal to pay and the depositor is entitled to interest from the date of failure. Nat'l Bank of Commonwealth v. Nat'l Bank, 94 U. S., 437. If the bank resumes business he is entitled to interest at the legal rate. However, depositors are usually anxious to assist the bank and its officers in putting the bank on its feet again and they will generally waive their right to interest under the circumstances. If the bank does not resume, interest is usually paid creditors from the date of the failure until final payment, if the estate is sufficient, but otherwise a claim is entitled to no interest as against the receiver, unless it would be entitled to it as against the bank at date of failure.

164. Where a bank wrongfully pays out the money of a depositor, he is entitled to interest, even though he would have let the money remain in the bank and was not being allowed interest. Savings Bank v. Nat'l Bank (Iowa), 70 N. W., 769. Where he is drawing interest at a less rate, but is at liberty to withdraw at any time, refusal to pay gives him the right to interest at the legal rate from the date of the demand and refusal or the wrongful payment. As to interest on certificates of deposit, see Sec. 49.

165. Lien.-In most states when a debt of the depositor to the bank matures, any securities which the bank holds for the depositor, in the regular course of business, may be held until payment of the debt. The right to hold the property to secure the debt is called a banker's lien.

166. If a bank holds negotiable paper for collection for the depositor, or the proceeds of collections, although received by the bank before the debt to it became due, the banker's lien attaches when the debt is due, but not before. Nat. Bank of Phoenixville v. Bonsor, 38 Pa. Super. Ct., 275.

167. Collateral and Special Deposit.-Where security is given to a bank under an express agreement that it is collateral to a specific indebtedness, then no part of that security, or the proceeds thereof, can be applied except in payment of the debt expressly secured. A special deposit or a deposit of money or property made for any specific purpose cannot be diverted from that purpose and applied by virtue of such lien or right of set off. Under such circumstances no lien arises except such as is expressly contracted for. Furber v. Dane (Mass.), 89 N. E., 227; Van Zandt v. Hanover Nat'l Bank, 149 Fed., 127. Affirmed in U. S. Supreme Ct., not yet reported.

168. Notes Presented for Discount.-Where a depositor is indebted to the bank and he presents notes for discount, the bank cannot discount the notes and immediately use the proceeds of the discount to extinguish other debts past due; but when the notes so discounted fall due the lien of the bank attaches as to his general deposit or securities held by the bank which it obtained in the regular course of business. And where notes are sent to a bank for discount, and the bank refuses to discount them, it must return them to the sender, and cannot acquire a lien in this way. Hanover Natl. Bank v. Van Zandt,

U. S.,

169. Set Off.-Akin to the banker's lien is the right of set off. If A owes B, and B owes A, an action by A against B, at law, formerly would give B no right to set up A's debt to him as a defense. His only remedy was to also sue A. Thus there would be two actions. Courts of equity, however, afterwards allowed what is called a set off, permitting the one claimant to set off his claim against the claim of the other, adjusting the two claims in one suit, to prevent a useless multiplicity of suits. So where A owes the bank and the bank owes A, in the regular course of business, the bank can offset what it owes A against his debt to the bank.

170. When Right Attaches.-The fact that the debt is due gives the bank the right to the lien, regardless of whether the bank has actually made the application and, therefore, a check presented after the lien has attached will not have any rights prior to the right of the bank, even though the application has not been made and the bank's books show a balance due the depositor. The question is whether the lien has attached, not whether the money has been applied by the bank. In a few States there is no lien without an express contract to that effect, and in some States the bank must notify the de