First National Bank v. Pettit & Smith

Citations

• 41 Ill. 492

Syllabus

<p>Checks—liability of the drawee to the holder of a check. Where a party obtains credit at the bank for a ceftain amount, and for a specific purpose, and the bank agrees to pay his checks to that amount, after the credit thus negotiated has been overdrawn, the bank is under no obligation to pay any more checks drawn by that party, although they may be drawn in favor of persons who have contributed to the purpose for which the drawer obtained the credit with the bank, and were drawn on that account, and the deficit in the amount to be drawn against arose from the payment by the bank of checks drawn for a purpose foreign to that for which the bank agreed to give the credit to the drawer. In such case there is no privity between the bank and the holders of the rejected checks which will in any way render it liable to them.</p>