as he may (42), an insurance policy on the life of his debtor, the debt is paid, and the former debtor then dies. It is generally held that the creditor can still recover the full amount of the policy (43). Some courts, however, hold in this kind of a case, that the creditor can retain only sufficient to reimburse him and any balance goes to the estate of the deceased (44). If the premium in these latter cases has been paid by the debtor, or has been charged up against him, so that it is really his policy, the result reached by the last mentioned courts would seem sound. Otherwise the former view seems preferable.

§ 156. Doctrine of subrogation inapplicable. With both life and accident insurance it necessarily follows, from the principle that they are not contracts of indemnity that there can be no question of double recovery and hence, in the lack of stipulations to the contrary in the policy, or of fraud, the insured may recover from all the companies insuring him. From the same general principles, it also follows that the doctrine of subrogation has no place in these branches of insurance law.

(42) 12, above.

(43) Amick v. Butler, 111 Ind. 578.
(44) Tate v. Building Assn., 97 Va. 74.

§ 1. What is meant by banking. Banking is a business, and any person, natural or artificial, who habitually conducts a business the principal features of which are the transaction of some or all of the incidents of banking is properly designated a banker, but a single or even several isolated transactions precisely similar to those which make up the daily items of a banking business will not constitute one a banker. For example, one of the ordinary transactions of a bank is to loan money, taking the borrower's note for its repayment. Individuals habitually make loans of money and take precisely similar

paper. The most important part of a bank's business is borrowing, but many people habitually borrow. Many persons may, and most business men occasionally do, accept deposits of money agreeing to hold them to the order of the depositors, but the bank deposit is peculiar. In legal effect it is a loan (1). Many men buy or sell notes. Hotels are obliged to receive deposits of money or articles for safe keeping. All these are ordinary things with banks. What then occasions the name Banking and entitles or compels the treatment of the person to be treated as a banker?

In plain words it is as we shall see the making of all of these the habitual business at an established place of business, which makes a bank and constitutes banking (2).

§ 2. Same: The different kinds of banks. Before examining these subjects in detail it may aid the understanding to point out the various kinds of banks.

A private bank is one conducted by an individual or partnership.

A state bank is one conducted by a state or by a corporation under a state charter.

A national bank is always a corporation and all national banks operate under the same charter, the same law, and the same rules (2a) and regulations. These are all instrumentalities of the United States by means of

(1)

Marine Bank v. Fulton Bank, 2 Wall. 252; Straus v. Bank, 122 N. Y 382.

(2) American Loan Assn. v. Levy, 33 La. Ann. 1203. See Auten v. U. S. Nat. Bank, 174 U. S. 125; Wyman v. Wallace, 201 U. S. 230.

(2a) State law as such is not allowed to govern the operation or business of National banks. Yates v. Jones Nat. Bank, 206 U. S. 158.

which the constitutional power to borrow money and regulate the value thereof is in part exercised.

§ 3. Same: Sources of their power. The three kinds of banks above enumerated are all alike subject to regulations, but each derives its title or authority from a different source. The private banker operates under the common law right to contract, except so far as constitutional laws restrain or regulate his business. The state banks derive authority from the state. The national banks are the creation of the national government and while they exercise many of the same powers exercised by the others they possess other important special privileges, franchises, and exemptions.

§ 4. Trust companies. A trust company properly so called is quite a different thing though they do commonly carry on some of the ordinary features of banking. This is easily understood when we remember that much of the business of banking can be done without special authority, as will be explained further on.

§ 5. Banks of issue. Formerly private banks and state banks were in the habit of issuing promises to pay the bearer of a bill the sum indicated. They were called "bills of credit" (3), and passed from hand to hand as money; but the national tax of ten per cent on these destroyed the practice (4).

§ 5a. Savings banks. A savings bank is, strictly speaking, not a commercial bank, for the pure savings bank receives deposits to be invested for the benefit of the

(3) Briscoe v. Bank of Kentucky, 11 Pet. 257. (4) Veazie Bank v. Fenno, 8 Wall. 533.

depositors. A savings bank has neither circulation, checks, drafts, certificates of deposit, or exchange. It is a trustee and not a bank in strict legal parlance. Where a so-called savings bank has capital and is conducted for profit, permitting its depositors to check out, although it is done upon a pass-book, which performs a double office of a certificate of deposit and its return, as a check or draft, the institution must be termed a bank (5).

§ 6. Nature of banking business. The ordinary business of banking is conducted almost, if not entirely, by the use of commercial paper as evidence of each transaction. The most common forms of these are (besides ordinary negotiable paper in general use) commercial paper or contracts peculiarly associated with banking, namely, certificates of deposit, checks, cashier's checks, certified checks, bank drafts, pass-books, and bank-books, which, when duly and lawfully issued pass current as money. Banking is, therefore, in its peculiar incidents, a department of the law-merchant, subdivision contracts. By whom conducted, whether by a private individual, partnership, or firm, is a minor incident. It does not change its nature by reason of the person by whom it is conducted, whether the person be an individual, a partnership or a corporation.

Banking has always been regarded as a common law right; that is of common right, subject, of course, to regulation by law upon the same principle as other public businesses, for the business is one so intimately associated

(5) Oulton v. German Sav. Soc., 17 Wall. 109; Louisiana v. Louisiana Sav. Co., 12 La. 572; McCaskell v. Savings Bank, 60 Conn.