no right of action against the bank for a refusal to pay the check, and for the same reason that the holder of an unaccepted bill of exchange cannot sue the drawee for refusing to accept, that is, because there is no privity between the holder and drawee unless the bill would constitute an assignment pro tanto of the fund drawn against, and this is not feasible by another rule of law which denies the right of a creditor to split up a single indebtedness into a number of obligations or rights of actions. A few authorities do hold that a check does operate pro tanto as an assignment of the fund, and Professor Tiedeman makes a strong argument that in the case of checks this would be no burden on the banker, since it impliedly agrees to pay out the fund in parts as the depositor elects. (Com. Pap., Sec. 452.) But the weight of authority is against the right of the checkholder to sue the bank. (Brown v. Leckie, 43 Ill. 500; Roberts v. Austin, 26 Ia. 316.)

The holder of a check on a bank is entitled to receive payment free from any offset by the bank for a debt which such holder may owe the bank. (Brown v. Leckie, supra.)

Sec. 857. RIGHTS AND LIABILITIES OF DRAWER OF CHECK.-After presentment for payment and dishonor the check is evidence of the indebtedness of the drawer, the check is presumed to be given in satisfaction of a debt, but may be shown to have constituted a loan from drawer to payee, and is then evidence of the amount. (Tiedeman, Com. Pap., Sec. 455.) When held by the drawer the check is pre

sumptively a receipt for money paid the payee, if it was made payable to order. But when the check is payable to bearer, affirmative evidence would be required to show who received the payment. (Conelly v. McKean, 64 Pa. St. 113; People v. Baker, 20 Wend. 602.) The check is not evidence of payment of a particular account, without proof of the special consideration. (Aubert v. Walsh, 4 Taunt. 293; Tiedeman, Com. Pap., Sec. 455.)

The check when paid becomes the property of the drawer, but may be kept by the bank as a voucher or receipt for money paid out on the account of the depositor until the account is balanced or settled, when they are to be delivered up to the depositor.

Sec. 858. ACCOUNT PAID BY CHECK NOT DISCHARGED UNTIL THE CHECK IS PAID.-It is the invariable rule of law that when a check is given in payment of a debt it does not constitute an absolute discharge of that debt until it is paid. Smith v. Miller, 43 N. Y. 151; Hearth v. Rhodes, 66 Ill. 351.) And the surrender of a bill or note could not be compelled until the check given in payment had been paid. (Barnett v. Smith, 30 N. H. 256.)

CHAPTER IX.

PAPER MONEY, COUPON BONDS, AND QUASI-NEGOTIABLE PAPER.

Sec. 859. KINDS OF PAPER MONEY, AND EFFECT AS NEGOTIABLE INSTRUMENTS. -A number of different kinds of paper money exist in the United States, some being made by law legal tender and receivable in payment on all debts, while others simply pass as currency on the credit of the bank or fund which they are drawn against. All these species of paper money are negotiable instruments, payable to bearer, and transferred by delivery. They are: United States Treasury Notes, Silver and Gold Certificates, and Bank Notes.

United States Treasury Notes are in form promissory notes payable to bearer on demand. By statute they are made legal tender, and their issue by the United States, though questioned at first, has been upheld by the Supreme Court. (Juillard v. Greenman, 110 U. S. 421.) Unlike ordinary promissory notes all kinds of paper money is printed on fine paper of a texture selected to prevent counterfeiting. The silver and gold certificates issued by the federal government are not legal tender, and are payable as the certificate states, in gold or silver coin deposited in the treasury and payable to bearer on demand.

Bank-notes or bank-bills are the promissory notes of incorporated banks intended to pass current as money. (Tiedeman, Com. Pap., Sec. 464.) When they are issued and made payable at a future time they are called post-notes, otherwise they are payable to bearer on demand. Bank-notes not being legal tender, they are not a valid tender in payment of a debt if objected to, and this is true as to a debt due to the bank that issued them unless by statute they are made receivable for all debts owing the bank of issue. (Thomas v. Todd, 6 Hill 340; Bank of U. S. v. Bank of Ga., 10 Wheat. 333; Bank v. Roosevelt, 9 Cow. 409.) Bank-notes and post-notes are negotiable, and since they are designed to circulate rapidly as currency or money, the holder is presumed to be the bona fide owner even though guilty of negligence in taking the notes, and can compel payment to him though the notes were stolen from the true owner. (Tiedeman, Com. Pap., Sec. 464; Worcester Co. Bank v. Dorchester Bank, 10 Cush. 488.)

The holder should receive the notes in the usual course of business and not as a pledge or security upon an agreement not to put them in circulation, in order to be deemed a bona fide holder. (Davenport v. City

Bank, 9 Paige 12.)

Since bank-notes are specially intended to circulate indefinitely, they are not to be deemed overdue because not presented a reasonable time after issue. And they may be re-issued after payment, unless protested for non-payment, in which case the holder, with or without

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notice, would be charged with equities. (2 Parsons, N. & B. 95; Burroughs v. Bank, 70 N. C. 284.)

The transfer is customarily made by delivery only, though a transfer by indorsement may be made. In either case the transferor warrants the genuineness of the note, and in case of its being counterfeit he is the loser, and the debt for which it was transferred is not cancelled. (Young v. Adams, 6 Mass. 182; Ramsdale v. Horton, 3 Pa. St. 330.) The receiver of counterfeit notes must give notice of its character within a reasonable time or he will lose his remedy against the transferor. Reasonable time is governed by the facts of each (Simms v. Clark, 11 Ill. 137; Gloucester Bank v. Salem Bank, 17 Mass. 44.) In case the holder of bank-bills or notes loses them the loss falls on him, unless he can show that certain specific notes were destroyed and indemnify the bank against their future presentment for payment. In case of a partial destruction or loss of a note the authorities differ, some holding that a recovery may be had by showing the facts without an indemnifying bond, others requiring a bond. (Bank of U. S. v. Sill, 5 Conn. 112; Commercial Bank v. Benedict, 18 B. Monr. 311; Story on Bills, Sec. 448.)

case.

State bank-notes have been superseded by National bank-notes, and these later notes differ only from the former in that they are secured by the federal government, which guarantees their payment. The government is protected by the deposit of government bonds by the banks issuing the notes.