No. 9,420; Re Lawrence, 10 Ben. 4, Fed. Cas. No. 8,133. In Griffin v. Dutton, 165 Fed. 626, 91 C. C. A. 614, the Court of Appeals for this circuit held an assignment so made and accepted an act of bankruptcy, though neither the form in which the bankrupt had signed it nor the signature of the assignee could be proved with certainty, the instrument itself having been lost, and though no creditor had assented to it. In Canner v. Webster Tapper Co., 168 Fed. 519, 93 C. C. A. 541, the same court held such an assignment an act of bankruptcy, though the assenting creditors repudiated it and were held to have the right to repudiate it because their assent had been induced by fraud and misrepresentation. "But in all the above cases the grantor had gone far enough to make what had been done a transfer of all his property, so far as his part in the transaction was concerned. If he had stopped short of that point, however clearly he may have manifested his intention to make à general assignment, he cannot be said to have made any. He may have prepared a deed of assignment with intent to execute it, but, so long as he has left it unsigned or in escrow, the general assignment contemplated has not been made." See Decision No. 1392. Banks and Banking: Deposits. In Ingber v. Tradesmen's Nat. Bank, Decision No. 1393, the plaintiffs were executors of one Jacob M. Ingber, who in his lifetime had a deposit account with defendant. In the course of business Ingber, from time to time, became indebted to defendant, and it was finally agreed between him and the bank that he should draw his checks to the order of the bank for $3,000, have them certified and deliver them to the bank as collateral security for any indebtedness he might owe the bank. In the meantime Ingber died, his two certified checks to the amount of $3,000 being still outstanding and in possession of the bank. His executors claimed that this $3,000 belonged to his general estate and should be turned over by the bank. The bank claimed in effect that the drawing of the checks constituted an assignment of the account to it to the extent of $3,000 and that therefore the bank could hold on to this balance. The court upheld the contention of the bank, saying that the $3,000 was really not in the account of Ingber at the time of his death, since the certification of a check charges the account with the amount thereof and thereby deducts such amount from any balance the depositor might otherwise have. This view is in accord with the usages of the business and commercial world and with the general understanding of the legal significance of the certification of a check. In summing up the case the court said: "The controversy arises out of the appropriation of $3,000 under the following circumstances: The decedent carried an active account with the bank and desired to make some loans. He entered into an agreement with the bank, in which it was stipulated that he would draw a check upon his account for $1,500, which check should be certified by the bank, properly indorsed, and then be retained by the bank as collateral for any indebtedness of the maker to the bank. The evidence shows that this arrangement was carried out. At a subsequent date an agreement of the same import, involving the same amount, and including the same terms, was made and carried out. "The testimony of the cashier, which is not contradicted, conclusively shows that, upon the very day when each check was certified, it was immediately charged upon the books of the bank against the account of decedent, in whose lifetime the books were balanced, showing the charges thus made. At the time of decedent's death his own bank book showed the appropriation by the bank of the respective amounts for which the certified checks were drawn. These transactions were carried out in strict compliance with the terms of the agreements entered into, and we can see no reason in law or equity why an agreement of this character, lawful in its terms and properly made in the course of business dealings, should be disturbed. The bank became liable for the payment of the check as it was certified, and very properly charged the account of the maker with the amount of each check as soon as its liability for payment attached. The fact that the bank took this method of securing the payment of existing cbligations or of indebtedness to be incurred does not change the nature of the transaction or the liability of the contracting parties." It is of course assumed in the case that Ingber actually owed the bank $3,000 or more. Since the checks were given as collateral security for the decedent's indebtedness, they could not be held for an amount in excess of such indebtedness. See Decision No. 1393. Banks and Banking: Collections. Of much importance to the banking and general business world is the law governing the collection of commercial paper by the system. of correspondent banks. Without some such system the conduct of the business of the world of to-day would be impossible and the law of negotiable paper, together with its use, would be confined to the petty doing of the country store instead of extending, as it does, to every enterprise in commerce, financing, manufacturing or engineering that spreads beyond the limits of the same country store. Gradually by repeated litigation and consequent adjudication this law is becoming well defined. A glance through the files of the Quarterly for the last few years will show scores of decisions on this aspect of the law. The recent case of Farmers' Nat. Bank of Center v. Merchants' Nat. Bank of Houston, Decision No. 1394, makes clear certain principles of law governing this branch. The rule in most banks is that paper deposited for collection cannot be drawn against unless certified until it has actually been collected. This is a reasonable rule and has been upheld by the courts. Suppose, however, the rule is not enforced. or that a certain bank has provided no such rule. If under these conditions, a depositor who has forwarded paper for collection be allowed to draw against the amount of such paper before actual collection thereof and the paper be subsequently returned dishonored, what rights has the bank who advanced money on the strength of the dishonored paper? Clearly if the depositor has endorsed the paper, as is usually the case, the bank, under familiar principles of the law of negotiable instruments, may sue him on his endorsement. In any case, however, it may recover the amount so advanced under the reasoning of the case we are discussing. It is there held that the advance by the bank pending the collection was a mere loan from the bank to the depositor and consequently if it were not paid by the proceeds of the paper could be recovered from the depositor whether he had endorsed the paper or not. On this point the court said: "It will be remembered that, as soon as the Farmers' Bank received notice that the draft had been received by the Merchants' Bank, it at once entered the amount of the draft to the credit of Potts & Lynch, and permitted them to check it out in ordinary course of business. This was nothing less than an advancement or loan to Potts & Lynch on the faith of the payment of the draft, and, the draft remaining unpaid through no fault of the bank, left Potts & Lynch its debtors to the extent of the amount so advanced. Thus far we have not discussed the question of liability of the Farmers' Bank to Potts & Lynch, growing out of the matters pleaded by the latter, for the alleged negligence of the former in informing them that the draft had been paid, and in not informing them of the noncollection of the draft in time to allow them to present their claim to the receiver, and thus collect their proper proportion of the debt owing them by the lumber company." Of course the intention of the parties at the time the depositor is allowed to draw is not in so many words that a loan is to be made by the bank. Nevertheless the intention of both the bank and the depositor, unless there be fraud on the part of the latter, undoubtedly is that the bank will not lose if the paper be dishonored, irrespective of the fact of endorsement or non-endorsement of the dishonored paper. This intention is, therefore, given practical effect by this decision, and hence the decision is in accord with justice and common sense, although perhaps some technical fault might be found with its logic. Of course if the non-payment of the paper be caused by any negligence on the part of the bank the bank has no rights against the depositor. On the contrary, the depositor has a right against the bank for any loss caused him by such negligence. So it was in the case we are discussing. In that case the drawee of the draft which was forwarded for collection became insolvent. The forwarding bank neglected to notify the depositors until too late to prove their claim against the insolvent. It was shown that if the claim had been proved the depositors would have received a dividend of 42 per cent. The court therefore held that the bank, by reason of its negligence, was liable for the amount thus lost and that the depositor could avail himself of this right either by an affirmative action or by way of a defense to the amount of the loss. The court said in part: "The issue of negligence of plaintiff in not informing these appellants of the non-collection of the draft in time to allow defendants Potts & Lynch to present their claim to the receiver for allowance before the close of the receivership, and their loss in consequence, was raised by their pleadings. The bill of exceptions referred to shows that the testimony offered and rejected was substantially as stated in the assignment. If in fact the Farmers' Bank informed Potts & Lynch, and they were thus led to believe, that their draft had been paid by the lumber company, and if they had been seasonably informed that the draft had not been paid, they would have taken such. steps as would have resulted in the collection from the receiver of 42 per cent. of their claim, and they were not so informed, we see no reason why they would not be entitled to a judgment against the bank for this amount in set-off to the claim of the bank for the amount advanced by the bank to them." See Decision No. 1394. Bills and Notes: Promissory Note: Negotiability. A promissory note must contain a promise to pay a definite or ascertainable sum of money absolutely and without conditions at a time that is certain to arrive. In addition to these requirements, if the note is to be deemed negotiable it must contain the words of negotiability, i. e., it must be payable to the order of a certain person or to bearer. Should a note lack this last feature it might be a promissory note, but it would not be negotiable. Hence, although all negotiable notes are promissory notes, all promissory notes are not negotiable. It was necessary for the Supreme Court of Massachusetts to invoke this distinction in deciding the case of Bryne v. Bryne, Decision No. 1395, where the instrument in question read as follows: |