Law Commons^™

Banks And Banking - Collections -"Cash Or Solvent Credits"

Michigan Law Review

The plaintiff drew an out of town draft and deposited it with the A bank for collection. The A bank sent the draft to its correspondent, B bank, to collect and make return when actually paid. The B bank collected the amount of the draft and, according to a custom between the two institutions, credited the account of the A bank and sent them a notice of collection. On the very day this notice was received the B bank closed its doors. A statute provided that items deposited for collection should be credited subject to final payment in cash or …