however, are likely to be contested anyhow, a will is recommended where the amount justifies it.

193. Check of a Third Party.-A check drawn by A, payable to B, may be the subject of a valid gift by B to his donee, if the requirements of intent and delivery, are present; and if otherwise valid, the fact that the check was not endorsed will not invalidate the gift. And this is the law in Pennsylvania. Rhodes et al. v. Childs, 64 Pa., 18. And so a note of A to B can be made the subject of a gift by B, but a donor cannot give his own note, as this is merely a promise to give something and there is no consideration upon which the promise could be enforced.

CHAPTER X.-MISCELLANEOUS.

194. False Pretenses.-When a check is given by one who has not funds in the bank upon which it is drawn, and knows he has no funds, whether or not his act constitutes an offense for which he can be criminally prosecuted depends upon the law of the state. Generally the mere giving of a check without sufficient funds to meet it is not in itself a crime. It may be that the drawer has made an innocent mistake, or he may have an arrangement with the bank by which the check will be paid, as where he has given security for overdrafts. But where one knowingly issues a worthless check to one who, on the strength of the check, parts with money or property, he is, in most states, guilty of obtaining money or property under false pretenses. If he obtained no money or property, but gave the worthless check for an existing indebtedness, he would not be "obtaining" money or property. And it has been held that obtaining credit at a bank for a worthless check is not punishable under a statute punishing the obtaining of money under false pretenses. Maxey v. State (Arkansas), 108 S. W., 1135. There must be a false representation-an inducement to part with something which would not have been parted with but for the inducement offered by the giving of the worthless check-and something obtained, the obtaining of which, in such manner, is made an offense by the laws of the state.

195. Overdrafts.-Where a financially responsible depositor innocently draws a check for an amount in excess of what the bank owes him, or where he has made arrangements with the bank, by depositing collateral or

satisfying the bank as to his financial responsibility, to overdraw, the payment of a check in excess of the depositor's credit is justified. 267; 44 Am. Reports, 138. duty to pay an overdraft.

City N. B. v. Burns, 68 Ala.,

The bank is not under any Merchants National Bank v.

National Bank of Commerce, 139 Mass., 513.

196. A Loan.-An overdraft is a loan of money to the depositor who overdraws, and is payable on demand. If the officers of a corporation, or an agent, be authorized to make overdrafts, they will have implied authority to give a note for such overdrafts. Hennesy Bros. etc., v. Bank, 129 Fed., 557. The depositor who overdraws is liable to the bank, and where he subsequently makes a deposit without an agreement to the contrary, the deposit can be applied in payment of the overdraft. Nichols v. State, 46 Neb., 715; 65 N. W., 774. But no interest can be charged on an overdraft, unless there has been an agreement for interest, until payment thereof has been demanded, when interest can be recovered from the date of demand. Casey v. Carver, 42 Ill., 225.

197. Care in Allowing.-While it may be justified, no overdraft should be allowed unless the board of directors, or an officer whom they have authorized, sanctions it. An agent does not derive any authority to overdraw by simply being empowered to withdraw a deposit. Merchants N. B. v. Nichols & Shepard Co., 79 N. E., 38 (Ill.). Where an overdraft is allowed without the exercise of prudence in ascertaining the financial standing of the person overdrawing, or where an officer of the bank permits another officer to withdraw, directors and officers will be held to the same responsibility as in the case. of any other loans. And an overdraft may be criminal misapplication of the bank's money. U. S. v. Heinze, 161 Fed., 425.

198. Receiving Deposits When Bank Is Insolvent

Some states have statutes which make it a criminal offense for officers of banks to receive deposits when the bank is known to be hopelessly insolvent. The wording of the statute is different in the various states, and the courts of each jurisdiction have construed the respective statutes differently. Where such statute is in force the officers of a national bank are not amenable thereto. Easton v. Iowa, 188 U. S., 220.

199. National Banks.-There is no statute of the United States making it a crime for a national bank to receive deposits when insolvent, but if deposits are received by any bank, state or national, when the bank is known by its officers to be hopelessly insolvent, the officers may be personally liable, and the deposits can be recovered by the depositors, provided the money can be traced into the hands of the receiver.

200. Tracing Trust Funds.-If the bank has in its vaults $200, at the opening of business, then A deposits $1,000, after which the bank pays to B $700, this would leave $500 in the bank. If there were no other transactions, and the bank was closed on account of insolvency, the $500 coming into the receiver's hands could be recovered by A. It would be presumed that the bank paid out its own money first. For the remaining $500 A would have a claim as a general creditor. But where a bank has apparently been insolvent for a long time, the matter of tracing funds is a difficult one, and the claimant on any transaction, whether deposit, collection item or "trust fund," must show that his money, or an amount equal thereto, has remained in the bank at all times since he deposited it, or since the bank received it, until the closing, and that it passed into the receiver's hands, who holds so much more money by reason of that transaction. In the illustration given above, if C had deposited $100 after B withdrew the $700, there would be $600 in

the bank at the time of closing, but only $500 would remain of the amount A deposited. If C does not claim his $100 in full, this does not give A the right to the $600, because he can only trace $500 of his money as swelling the amount in the receiver's hands. Lowe v. Jones, 192 Mass., 94; Commissioners v. Lowe, 192 Mass., 94; Commissioners v. Strawn, 157 Fed., 49.

The question next arises, if $600 is traced into the receiver's hands, but there are many whose deposits or moneys have been received when their receipt was wrongful, and none can affirmatively show that his particular money is still in the bank, how shall the fund be divided? The $600 remains in the bank, but no one of the claimants can trace and identify it as his money. In such cases it has been held in some states that the last deposit made is to be paid first, etc., the deposits and receipts being returned in the reverse order of their receipt, and this seems the more logical deduction if tracing is to be required. Cherry v. Oklahoma Territory, 89 Pac., 190, 192. In one or two states it has been held that the fund should be ratably distributed among all those who claim a preference. Piano Co. v. Auld (N. D)., 86 N. W., 21. As there must be, first, a fund to trace, and secondly a tracing of that fund, it would seem that those claiming priority over other creditors should be required to follow their money into the hands of the receiver, or share, not in a distribution of an unidentified fund, but in the general distribution with all creditors; otherwise the money of the general creditor, who may have participated in increasing the fund in the bank, is used to pay, in full, one who has not established his right to a preference. In re North River Bank, 60 Hun. (N. Y.), 91; Bayor v. Tr. & Sav. Bank. 157 Ill., 62.

201. Where checks or other items have been deposited, if they are in the bank when the receiver takes charge,