with the security of the public credit that it is everywhere regarded as a public business, or as it is technically expressed publici juris and this is not inconsistent with the proposition that ordinary banking is of common right (6).

§ 7. Definition of a bank. A bank is an appellation indicating both the place of business and the character of the business. A banker has been defined as "one who keeps a place for the traffic in money; who there receives it from others, and keeps it with his own, using the whole fund as his own, or remits it at request to other places; who repays it at the will and call of his customer; who furnishes money to others on the discount of their obligations, or on securities brought by them; and who buys and sells bills of exchange. To these is sometimes added the issuing of his notes to pass as money, when allowed by law to do so" (7). The peculiarities of the business which distinguish it from other business consist not so much in the elemental transactions as in the manner of their mingling. Attempts at definition have not been particularly happy in producing a definition not subject to some criticism as a definition, e. g., the definition quoted above, leaves wholly out of view the paramount idea of banking as hereinafter mentioned. Likewise, the enumeration of the things which may be done in the course of conducting a banking business and which also may be done apart from it, does not aid us in the least to under

(6) Freund, Police Power, sec. 400-1; Meadowcroft v. Peo, 163 Ill. 56; State v. Hastings, 12 Wis. 47.

(7) People v. Doty, 80 N. Y. 225.

stand what is meant by banking; that is, does not bring out the characteristic features which cause a business to be "banking" as distinguished from a trust company, or a loaning company, or a savings bank, or a note broker, or other mercantile business. Banking is a business and is not predicable of a single transaction or of an occasional casual transaction similar to banking transac tions but incident to trade and commerce.

§ 8. Same: Federal revenue law. The statutory definition in the Federal Revenue law brings out the first essential idea involved in defining banking, namely, "having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order, or where money is advanced, or loaned, on stocks, bonds, bullion, bills of exchange, or promissory notes," [or where such are received for discount or sale] (8).

§ 9. Deposits are property of bank. The fundamental feature of real banking consists in receiving deposits upon the contract implied from the custom of merchants that the money becomes the property of the bank, while the bank agrees that it will at any time repay the money on demand on the order of the depositor. This has been a long-established universal doctrine (9). Other incidents may and usually do accompany the fundamental one, but they are, in truth, incidental and not essential to the creation of a bank.

(8) Warren v. Shook, 91 U. S. 704.

(9) Marine Bank v. Fulton Bank, Note 1, above. See Am. Loan Assn. v. Levy, Note 2, above; Bank v. Hughes, 17 Wend. 94; Cragie v. Hadley, 99 N. Y. 131.

§ 10. Relation of bank with a depositor is that of debtor and creditor. The legal contract resulting from the simple acts daily taking place in thousands of banks is almost never expressed in any formal manner but the law gives it a uniform character and affixes definite rights and obligations. The following from a recent case (10) states the universal law of the commercial world.

"The general transaction between the bank and a customer in the way of deposits to a customer's credit, and drawing against the account by the customer, constitute the relation of creditor and debtor. As is said by Mr. Justice Davis, in delivering the opinion of the court in National Bank of the Republic v. Millard, 10 Wall. 152, 19 L. ed. 897, in speaking of this relationship (page 155, L. ed. p. 899):

"'It is an important part of the business of banking to receive deposits; but when they are received, unless there are stipulations to the contrary, they belong to the bank, become part of its general funds, and can be loaned by it as other moneys. The banker is accountable for the deposits which he receives as a debtor, and he agrees to discharge these debts by honoring the checks which the depositor shall, from time to time, draw on him. The contract between the parties is purely a legal one, and has nothing of the nature of a trust in it. This subject was fully discussed by Lords Cottenham, Brougham, Lyndhurst, and Campbell in the House of Lords in the case of Foley v. Hill, 2 H. L. Cas. 28, and they all concurred in the opinion that the relation between a banker

(10) Burton v. United States, 196 U. S. 283.

and customer, who pays money into the bank, or to whose credit money is placed there, is the ordinary relation of debtor and creditor, and does not partake of a fiduciary character, and the great weight of American authorities is to the same effect.'

"When a check is taken to a bank, and the bank receives it and places the amount to the credit of a customer, the relation of creditor and debtor between them subsists, and it is not that of principal and agent.

"The case of Cragie v. Hadley, 99 N. Y. 131, 52 Am. Rep. 9, 1 N. E. 537, contains a statement of the rule as follows, per Andrews, Chief Judge:

"The general doctrine that upon a deposit made by a customer, in a bank, in the ordinary course of business, of money, or of drafts or checks received and credited as money, the title to the money, or to the drafts or checks, is immediately vested in, and becomes the property of, the bank, is not open to question. Commerc`l Bank v. Hughes, 17 Wend. 94; Metropolitan Nat. Bank v. Loyd, 90 N. Y. 530. The transaction, in legal effect, is a transfer of the money, or drafts, or checks, as the case may be, by the customer to the bank, upon an implied contract on the part of the latter to repay the amount of the deposit upon the checks of the depositor. The bank acquires title to the money, drafts, or checks on an implied agreement to pay an equivalent consideration when called upon by the depositor in the usual course of business.'''

The transaction of general deposit is in legal effect a borrowing by the bank and a loan by the customer (11),

(11) Note 1, above.

but there seems to be some reluctance to state this broadly.

§ 11. Bank is not a trustee for deposits. It is sometimes said that the relation is one of trust and confidence, but there is no other or further obligation on the banker than his promise to repay. He is not obliged to hold money, and in practice does not. He has unlimited discretion in reference to its investment, and is not obliged, in the absence of statute, to keep on hand money or security to pay his depositors. In the last analysis the banking business rests on confidence in the integrity and discretion of the banker.

§ 12. Same: Criminal statutes. The frequent failure of bankers has led to statutes regulating the business and fixing criminal penalties for the more common forms of fraud practiced by bankers against customers.

It is a crime in many states, and a fraud everywhere, for a banker, knowing himself to be insolvent, to accept deposits from persons ignorant of the situation; and if a failure follows quickly, under some circumstances equity will treat the deposit as a trust ex maleficio and allow the owner to reclaim the fund on the ground that an assignee or receiver takes only the owner's equities (12).

§ 13. Deposits classified. The word "deposit" was originally an apt word to indicate the nature of transactions which constituted the business of banks, viz.: the receipt and safe keeping of special deposits of plate or

(12) St. L. & S. F. Ry. Co. v. Johnson, 133 U. S. 566; Wasson v. Hawkins, 59 Fed. Rep. 233; Peo. v. St. Nicholas Bank, 28 N. Y. Sup. 407; cf. Ober Sons Co. v. Cochran, 118 Ga. 396; 98 Am. St. 118.