Lancaster Bank v. Woodward, 18 Pa., 357; First N. B. v. Needham, 29 Iowa, 249.

98. Post Dated Checks.-Ordinarily a check is presumed to be drawn against funds which the depositor has in bank. If he issues a check when he knows he has no funds to meet it at the time, he may do it either because he has an arrangement with the bank allowing him to overdraw, or he commits a wrong. See Sec. 195. He is not guilty of a wrong, however, when he issues a post-dated check (a check dated ahead). It is not presumed that he has funds in bank to meet such check when drawn, but that he will have funds there to meet it when it is presented in the ordinary course of business at the time of its date. Before that time he has the right to draw other checks against his deposit. Even though the bank knows of the post-dated check outstanding, it cannot refuse to pay proper checks on demand. The bank cannot pay or certify a post-dated check before the day of its date. Clark N. B. v. Albion N. B., 52 Barb. (N. Y.), 592. If it does, it cannot charge the amount to the depositor if he countermands or stops payment before the day of its date.

99. Countermanding or Stopping Payment. It is the law in nearly all the states that the depositor has the right to countermand checks, or stop payment. The bank must pay only on the order of the depositor, but must pay every valid order presented so long as unincumbered funds are to the credit of the depositor. If a dispute arise between the depositor and one to whom he has given a check, these two must settle their dispute themselves and the bank should not be dragged into their difficulty, and, therefore, the bank is not concerned as to how many checks are outstanding, but only as to the validity of the check as it is presented, unrevoked, and the state of the depositor's account. Where payment is stopped on a check the bank must not pay such check or it will be liable to the depositor. Elder v. Bank,

55 N. Y. S., 576. Of course, where the bank has certified a check it is presumed that the depositor has been charged with the amount, and on such a check the bank is liable itself to the holder. It cannot be countermanded. But see Sec. 131b.

100. In Illinois it has been held that a check cannot be countermanded, on the ground that it is a fraud for the depositor, after issuing a check, to withdraw the money so that there will not be sufficient to meet the check, and that it is likewise a fraud to tell the bank not to pay. But suppose the bank does not know of an outstanding check and the depositor himself demands payment of his entire balance? The bank cannot refuse to pay him. In Illinois it was the rule that where A drew a check to B, B could sue the bank, as the check was regarded as an assignment of the fund to the one to whom the check was given. This has been changed by the Negotiable Instruments Law and, as was the rule in most states before, and is the rule now where the Negotiable Instruments Law is in force, a check is not an assignment of the fund, and the money in bank belongs to the depositor until the bank has paid it out on his orders. The bank owes no duty, and is under no legal obligation, to the holder of the check, unless the bank has certified it. If the depositor has the check certified he can countermand it before he delivers the check, but if he has delivered it, or if the bank certifies it at the request of the holder, it cannot be countermanded, as the bank has promised to pay-it is now the obligation of the bank. But see Sec. 131b.

100a. A cashier's check cannot be countermanded. Drinkall v. Movius State Bank, 11 N. D., 10; 88 N. W, 724.

IOI. Revocation by Death.-It is generally held that the death of the depositor revokes checks drawn by him and delivered but not paid. On the death of the depositor

the money in bank passes to his executor or administrator at the instant of his death, for distributon under the law of the state where he is domiciled, subject to the rights of creditors. If the bank knows of his death it will certainly be liable to the estate if it pays a check thereafter, unless it has, by certifying, become debtor to the holder and not to the depositor; and it has been held in most cases that the death of the drawer revokes all unaccepted checks. If the money in bank is the depositor's money until the bank has actually paid it out, and the death of the depositor itself passes the title of his property to his representative, it follows that the effect must be the same on the deposit as on any other personal property. See Secs. 177, 178.

Where the check operates as an assignment, the money represented passes at the time of the assignment and is no longer the depositor's; but checks are generally not regarded as asisgnments now. In some states a certain time after death of drawer is given in which to present checks. Natl. Com. Bk. v. Miller & Co., 77 Alabama, 168.

102. Revocation by Insolvency.-Insolvency of the drawer revokes all checks not paid, in those states where a check is not regarded as an assignment, and also under the United States Bankruptcy Law. Bowker v. Haight & Freeze Co., 146 Fed., 257, and see 146 Fed., 761.

CHAPTER VI.

PAYMENT OF CHECKS.

103. Payment When Presented.-A bank must pay the checks in the order in which they are presented, regardless of the dates. If A, having $100 in bank, gives B a check for $100 on the Ist of the month, and on the 2d A goes to the bank and presents his check for the $100, even though the bank knows of the outstanding check in B's hands, it must pay to A, except where a check operates as an assignment. Bank v. Ingersoll, 2 Neb., 617; Dykers v. Bank, II Paige (N. Y.), 612.

104. No matter how many hands a check passes through, the bank must pay it.

105. When the check is presented at the bank and the money is passed over the counter, to one other than the maker (or depositor who drew it) and accepted by him, the holder is absolute owner of the money. If the bank afterwards finds the depositor's balance was not large enough to meet it, and cannot recover from the maker on the overdraft, it is the bank's loss, unless there is fraud or collusion on the part of the payee, or holder, as where he presents a check when he knows that the drawer has no funds. Bank v. Burns, 68 Ala., 600. Where payment is made and accepted in good faith the money becomes the property of the payee or holder. Bank v. Berrall, 70 N. J. Law, 757, where check was paid after revocation. See Sec. 113. It could not be attached as the depositor's.

106. If a check is presented for more than the depositor has to his credit the bank is not bound to pay what it has,

but if it does it should indorse on the check the amount paid, if check is not surrendered. See Sec. 137.

107. The fact that the bank has previously allowed overdrafts will not obligate it to pay a check in full when the drawer has not sufficient funds. If several checks are presented at the same time, as through a clearing house, and there are sufficient funds to pay one but not all, in some places it is the custom to refuse all, and upon a second presentation pay the first presented; in others the custom is to pay the first in date; and in still others to pay the smaller ones, though the bank is not bound to pay any when they aggregate more than the balance to the credit of the depositor.

108. If a check is presented and payment refused for lack of sufficient funds, the bank may in most jurisdictions disregard the check, and can treat funds deposited or checks presented afterwards without reference to the order refused. Gilliam v. Merchants Nat. Bank, 70 Ill. App, 592.

109. The only duty the bank owes is to pay, upon presentation, all checks properly drawn against an unencumbered balance. It need do nothing else. So it is not bound to certify, or to promise that it will keep out funds when received. It need not answer questions regarding the depositor's account. Though it has been held in Kansas that the bank can be made to disclose the state of the depositor's account, this was in a case where the disclosure was to the grand jury in considering an indictment. Of course, if a bank does accept a check, or certifies, or promises to do something beyond merely making immediate payment, it may become bound, but it is not otherwise under obligations to do more than pay it.

110. A payment in forged or counterfeit paper or money would be no payment at all; payment must be in legal tender, in the absence of any special contract between the depositor and the bank. See Sec. 203.