they should be returned to the depositors, if under the same circumstances money would have to be returned; but unless the bank was hopelessly insolvent and known by the officers to be so, (See Easton v. Iowa, 188 U. S., 220), the depositors have become creditors of the bank and are not entitled to a return of the money or the items. Quin v. Earle, 95 Fed., 728. If the items would be returnable, but have been sent on the way to collection, then the proceeds when received should be turned over to the owner of the item. Showater v. Cox (Tenn.), 37 S. W. 286; 97 Tenn., 547. If there be no actual cash proceeds, or no actual remittance of the amount collected, but the item was collected by a change of credits, or by checks on the same bank, the owner must prove his claim with all other creditors. Beard v. District, 88 Fed., 375; Bank v. Dowd, 38 Fed., 172. He cannot be paid in full with money that depositors have put in, or other creditors, who are no more to blame for the failure of the bank than he is. The better considered cases hold that parties who deal with banks are presumed to know and assent to the customs which banks resort to to make collections, etc. Freemans N. B. v. Natl. Tube Works, 151 Mass., 413; Aebi v. Bk. of Evansville (Wis.), 102 N. W., 329. It is not the intention of the writer to deal with collections in this volume, but the matter is adverted to here, as many items deposited, while received by the banks as deposits, must be collected by them before they are real deposits. The courts have wrangled with the question of "tracing" of trust funds, and there is still much conflict, but the statement made above is in accord with the principles which the federal courts have established and which are gradually becoming the law and the justice in the states. 202. The "Insolvent Bank" of Tightville, being hopelessly insolvent and known by its officers to be so, ac cepts from A a check drawn payable to A, by B, on the First National Bank of Moneyville, and gives A credit on his account. A has endorsed the check in blank. “Insolvent Bank” transmits the item to its New York Correspondent, endorsing it in the ordinary manner, "Insolvent Bank, Tightville, All prior endorsements guaranteed," etc. The New York Correspondent presents it at the National Bank of Moneyville and either receives the cash or credit to its account for the amount. The New York Correspondent in turn credits the account of the "Insolvent Bank" for the amount and notifies the "Insolvent Bank" that the item has been paid. Now there has been no money passed to the "Insolvent Bank" in the transaction and there is no "fund" which has come into the "Insolvent Bank" which can be traced. In the ordinary course of events the depositor, A, would have checked against the credit given him when he deposited the item. If it had been returned unpaid the "Insolvent Bank" could have charged it back to his account. Had the item been endorsed by A "for collection only," and with the understanding that no credit would be given until actually paid, or had there been other evidence that the item remained A's, the New York Correspondent Bank could not have treated it as "Insolvent Bank's" property, but A could follow it and recover the proceeds. But as there was no mark of title in any other than the "Insolvent Bank," upon being notified of the closing of "Insolvent Bank," the Correspondent Bank can offset the credit balance of "Insolvent Bank," including the the amount of items sent for collection, unless the item shows on its face that title thereto remains in the depositor, or there is some other notice to the Correspondent Bank that the item is not the property of "Insolvent Bank," against any balance the Correspondent Bank had in the "Insolvent Bank," or on any indebtedness owing by the "Insolvent Bank" to the Correspondent Bank in the ordinary course of business. And, while the depositor of checks on other banks usually can be charged back with the amount if the item is not collected, and he usually has only the privilege, and not the absolute right, to check against it before collected, he is, nevertheless, generally regarded as creditor of the bank until the item is charged back. Natl. Commercial Bank v. Miller, 77 Ala., 168; Balbach v. Frelinghuysen, 15 Fed., 675; Bank v. Theummler (Ill.), 62 N. E., 932; and cases cited in Sec. 201. MONEY. 203. Legal Tender.-Gold coin is legal tender for its nominal value when not below the limit of tolerance in weight; when below that limit it is legal tender in proportion to its weight; standard silver dollars and Treasury Notes of 1890 are legal tender for all debts, public and private, except where otherwise expressly stipulated in the contract; subsidiary silver (silver coins of smaller denominations than $1) is legal tender to the extent of $10; minor coins (nickels and cents) to the extent of twenty-five cents in any one payment, and United States notes for all debts, public and private, except duties on imports and interest on the public debt. Gold certificates, silver certificates and national bank notes are not legal tender money. Gold and silver certificates are receivable for all public dues, and national bank notes are receivable for all public dues except duties on imports, and may be paid out for all public dues, except interest on the public debt. 204. Fraudulent Notes.-The act of June 30, 1876, Sec. 5, provides that all United States officers charged with the receipt or disbursement of public moneys, and all officers of national banks, shall stamp or write in plain letters the word "counterfeit," "altered," or "worthless," upon all fraudulent notes issued in the form of and intended to circulate as money which shall be presented at their places of business; and if such officer shall wrongfully stamp any genuine note of the United States, or of the national banks, they shall, upon presentation, redeem such notes at the face value thereof. |