State National Bank v. Reilly

Citations

• 124 Ill. 464

Syllabus

<p>1. Banks and banking—trust funds on deposit—paying out on checks ■of depositor. Where a bank account is opened between a depositor, as trustee, generally,—-not as a permanent investment, but to be drawn against, —the contract of the bank is, that it will pay out the same on the checks of the depositor, and when such checks are drawn in proper form, the bank is bound to presume they are drawn in the proper discharge of the duty of the trustee, and to honor them accordingly.</p> <p>2. Same—bankruptcy funds on deposit—m what manner to be paid ■out—duty and liability of the bank. Under act of Congress and the rule of court, all sums of money received by assignees in bankruptcy, and by the clerk of the United States District Court, were required to be deposited with a certain bank to be named by the court, to be drawn out upon the •checks of the court. The funds so deposited were kept as a unit to the ■credit of the court, and were paid out on checks signed by the clerk and ■countersigned by the judge. The clerk failed to make deposit of all the funds received by him, and the bank paid checks drawn on it until it paid ■out all the funds deposited, but refused to pay other checks drawn, when suit was brought on a check so refused: Held, that the bank was not liable •to the holder of such check.</p> <p>3. The bank having properly kept the account of> deposits as a unit with ;and in the name of the district court, as required by the act of Congress •and rule 28 in bankruptcy, and the deposits having been properly withdrawn on checks drawn as required by the statute and the rule, for the benefit of the beneficiaries entitled to share in the common fund, it was .held, that as there was no misappropriation of such funds by the bank, it was not liable for any deficit in the amount due the beneficiaries, arising from the neglect of the clerk to deposit all the trust funds that came to his hands as an officer of the court.</p> <p>4. In such case, the bank was not bound to take