Security Bank v. Northwestern Fuel Co. ( 1894 )

Mitchell, J.

The defendant gave its check for $418.12 on the Bank of Minneapolis, payable to the order of the Mill Wood Company, which was a customer of, and had a deposit account with, the plaintiff, on which it was accustomed to deposit cash and checks, which were credited to its account, and against which it was authorized to draw its checks. On the same day on which the Mill Wood Company received the check it indorsed it, “For deposit in the Security Bank to the credit of the Mill Wood Company,” and deposited it, with other checks, with the plaintiff, receiving a deposit slip, and being credited with the amount on its deposit account. Immediately preceding this deposit the Mill Wood Company's account was overdrawn, but, after making this deposit, and another, made the same day, there was a balance to its credit of $876.30, including the credit for the check in question. The next morning it drew checks against its account, which were paid, which overdrew its account $363.72, and this overdraft has never been paid. Subsequently, on the same day, the check was duly presented for payment to the Bank of Minneapolis, but was dishonored, for the reason that the defendant had forbidden its payment. Immediately afterwards the Mill Wood Company became, and still remains, insolvent. This is a suit on the check. The only question is whether the title to the check had passed to the plaintiff. We think it had. The indorsement of the Mill Wood Company was sufficient, and was not restrictive or qualified.

Where a customer has a deposit account with a bank, on which he is accustomed to deposit checks payable to himself, which are credited to him on his account, and against which he is authorized to draw, an indorsement “For deposit” is, in the absence of a different understanding, a request and direction to deposit the sum to the credit of the customer, and passes the absolute title to the •check to the bank. Commercial Bank v. Miller, 77 Ala. 168; First Nat. Bank v. Smith, 132 Mass. 227.

Upon a deposit being made by a customer in a bank, in the ordinary course of business, of money, checks, drafts, or other negotiable paper received and credited as money, the title of the money, drafts, or other paper immediately becomes the property of the bank, which becomes debtor to the depositor for the amount, unless a different understanding affirmatively appears. In re State Bank, 56 Minn. 119, (57 N. W. 336.) There is nothing in this case indicating .any different understanding.

Order affirmed.

Buck and Collins, JJ., absent.

(Opinion published 59 N. W. 987.)