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Banks And Banking--Holder Of Draft Paid For By Check On Issuing Bank As Preferred Claim Upon Drawer's Insolvency

Michigan Law Review

A depositor presented his own check to his bank and received in exchange a New York draft drawn by the bank payable to a third person. The drawer bank was closed and the draft was dishonored. The depositor redeemed the draft and sought to establish a preferred claim against the bank's assets. In Fulton v. Baker-Toledo Co. the court held that a trust existed in favor of the depositor, under an Ohio statute which declares that when a check drawn by a depositor is presented to his bank for "collection and payment," and such check is charged against the depositor's …