purpose not prescribed by law transfers or applies any portion of the public money intrusted to him, is, in every such act, deemed guilty of an embezzlement of the money so deposited, converted, loaned, withdrawn, transferred, or applied; and shall be punished by imprisonment with hard labor for a term not less than one year nor more than ten years, or by a fine of not more than the amount embezzled or less than one thousand dollars, or by both such fine and imprisonment.

35a. Unauthorized Receipt or Use of Public MoneySec. 5497:

"Every banker, broker, or other person not an authorized depositary of public moneys, who knowingly receives from any disbursing officer, or collector of internal revenue, or other agent of the United States, any public money on deposit, or by way of loan or accommodation, with or without interest, or otherwise than in payment of a debt against the United States, or who uses, transfers, converts, appropriates, or applies any portion of the public money for any purpose not prescribed by law, and every president, cashier, teller, director, or other officer of any bank or banking association, who violates any of the provisions of this section, is guilty of an act of embezzlement of the public money so deposited, loaned, transferred, used, converted, appropriated, or applied, and shall be punished as prescribed in section fifty-four hundred and eightyeight."

36. Trust Funds-Generally an executor, administrator, guardian, etc., has authority to deposit funds in bank, temporarily, awaiting investment or order of court, and if he uses care in selecting the bank he will not be personally liable in case the bank fails. Statutes relating to the particular office should always be examined and closely followed. Where a bank rightfully received such deposits, as has been said before, while the depositor may be a trustee, as between the bank and the depositor the fund is not a trust fund but simply an amount due a general creditor. No one has a legal right to the deposit but the trustee, administrator, executor, guardian, etc., who rightfully deposited same. These hold the legal title for the benefit of those whom they represent. Where an administrator, executor, guardian, trustee, or any person acting in a representative capacity, deposits

funds which are not his own, but which belong to the person, or body of persons whom, or the estate which he represents, he should, to protect himself (and the bank should require for its protection that he do so), deposit the money, not in his individual account, but in an account designated as the account of the person, body of persons or estate represented. For example, if John Smith is executor of the Estate of James Smith, the money should be deposited in an account designated. "Estate of James Smith, John Smith Ex." "John Smith Ex. of the Estate of James Smith" would do, but the other is better. If John Smith represent James Smith as trustee, guardian, agent, attorney, receiver, or otherwise, the same rule should be followed.

While it has been held that the addition of the word trustee, agent, etc., would not in itself give a bank notice, upon receiving a deposit for credit to such account, that the money is a trust fund, it is a general principle of the law of trusts that a trust fund, if misappropriated, can be traced and followed into the hands of another. In Missouri it is held that the addition is simply a description of the person. In better considered cases, however, it is held that the word "trustee" is not meaningless, and that the bank is put upon notice that the deposit is not individual money of the depositor, especially where the depositor keeps an individual account also. One case holds that the word is a description of the fund deposited. The bank should require information which will enable it to determine whether the money is the property of the person deposited or of some one whom he represents. Having received the deposit it must pay to the one whom and upon order drawn in accordance with, the understanding had when the deposit was made. This, however, will not relieve the bank from liability where it should have used reasonable care at least to ascertain the

facts. Where an executor, administrator, guardian or committee, etc., is appointed, evidence of the appointment should be submitted to the bank. Where the authority is given by a court, the appointment or a copy, certified by the clerk of the court, is the best evidence. Where it is an officer of a corporation or committee of some kind, some official, written direction from the corporation or society represented should be filed with the bank, showing to whom the money belongs and who has authority to withdraw the same. The bank is still more in peril when making payment on such accounts. See Sec. 179. It should not pay from such account on the individual check of the depositor, with the understanding that he will make it good; for, even though he owe the bank on his individual account, any deposit he may make thereafter will have to be applied in restoring the amount wrongfully withdrawn and cannot be applied against his debt. If A have an account under his name, A, and another account "A, Trustee," and he give a check to C drawn against account "A, Trustee," the bank must pay the check, even if it be drawn for payment of an individual debt of A's, if the bank does not know it is an individual debt; but if the bank paid directly to A when it knew A was using funds of his trust for his private purpose, or accepted a check for A's indebtedness to the bank, the bank would be liable. If "A, Trustee," draw a check against the account, payable to "A," transferring the amount of the check to A's individual account, without the bank's having knowledge of a wrong, the bank would have to honor the check. While a mere reason to believe depositor is misapplying trust funds cannot make a bank liable, the trend of decisions is toward demanding of the bank more care in informing itself when suspicious circumstances attend checking against funds of which the depositor is trustee. Union Stock Yards Nat'l Bank v. Gil

lespie, 137 U. S., 411; Nat'l Bank v. Insurance Co., 104 U. S., 54.

A late case is Havana Central R. R. Co. v. Knickerbocker Trust Co., 119 N. Y. S., 1035. The treasurer had drawn a check against the account as treasurer, payable to his own order, and deposited it in his individual account. The bank was held to have notice that he was using the company's money.

CHAPTER III.

MAKING, RECEIVING AND KEEPING THE

DEPOSITS.

37. To Whom Made-Care should be exercised by depositors when leaving their money at the bank. The broad statement is made in one of the books that money paid to anyone behind the counter will bind the bank. While it is true that money deposited with one to whom it has been the custom to pay is payment to the bank, and while the president and cashier are generally authorized to receive deposits, and acceptance by them would bind the bank, yet where there is a receiving teller it is safest to deposit with no one else. If a deposit is made with one not authorized to receive it, the person to whom it is paid will be regarded as the agent of the depositor and not as the agent of the bank, and if the money is misappropriated it will be the depositor's loss. Of course if the party to whom it is paid sees that it reaches the proper place in the bank, then the bank is bound. Deposits should always be made in the banking

room.

38. Pass Books-Entries-The bank usually furnishes depositors with a book, called a bank book, or pass book. On making a deposit the depositor enters upon a slip the various items and hands the deposit, the slip and the book to the officer, who, after verifying the deposit, enters the amount in the pass book.

38a. The rule once was that the entry made by the officer of the bank was binding upon the bank, but not on the depositor, if made at the same time that the deposit