The right of set-off between the bank and its depositor is reciprocal. The depositor has a right of set-off against the bank for his deposit against the bank's claim,1 or for any other direct and ascertained claim which constitutes a set-off.2 But an unaccepted check in his favor, drawn by another depositor, would not be a claim that could be set off,3 except, perhaps, in those states which allow the holder of a check to sue the bank, and in that case only after the check has been presented.4 If the bank is insolvent, the depositor or an indorser upon a note held by the bank may set off his individual deposit in the bank, although the note matured after the insolvency.5 If the note was due at insolvency, all authority concedes the right.6 This right of set-off is not lost by the appointment of a receiver7 or an assignee;8 for such an assignee or receiver obtains only the bank's right, no more. It is said that where a director has been sued by the bank or its representative for securities which were transferred to him by the bank in the way of an illegal preference, he may set off his deposit to the extent of dividends he would have received upon his deposit in settlement of the bank's affairs.9 In another case an insolvent bank indorsed defendant's note to another bank after maturity. The second bank did not claim to be a bona fide holder. The ruling was that the defendant could set off his deposit in the first bank against the note sued upon by the second bank.10 The ruling would necessarily have been different if the plaintiff had been a bona fide holder.11 But where a bank agrees to hold a note for a surety upon the surety's agreement that he will not reduce his deposit below the note, the note belongs to the depositor and the bank is a mere trustee and cannot sue the surety.12

24 Mandeville v. State Bank, 19. La. Ann. 392.

25 Gumbel v. Abrams, 20 La. Ann. 568.

26 Chesapeake Bank v. Swain, 29 Md. 483.

27 Case last cited.

28 Mayer v. Heidelbach, 123 N. Y. 332.

29 Meridian Nat. Bank v. Hauser, 145 Ind. 496; Jackson Ins. Co. v. Cross, 9 Heisk. 283. Unless, of course, they are accepted or certified, and in some states unless they have been presented. See Sec. 147, post.

1 Whittington v. Farmers' Bank,

5 Har. & J. 489; Equitable Bank v. Claasen, 23 N. Y. Supp. 310.

2 Whittington v. Farmers' Bank, 5 Har. & J. 489.

3Butterworth v. Peck, 5 Bosw. 341. But in those states which recognize the holder's right to sue the bank, it would logically follow that the check after presentment could be set off after insolvency. This would make it a simple process to wipe out the bank's assets against solvent debtors.

4 See the last note. Surely those states would hesitate before making such a ruling.

5 Schuler v. Israel, 120 U. S 506; Jordan v. Sharlock, 84 Pa. 366; Skiles v. Houston, 110 Pa. 254 In Pennsylvania the depositor is in better position than the bank. So also in Wisconsin. Jones v. Pien-ing, 85 Wis. 264: Merchants' Ex. Bank v. Fieldner, 92 Wis. 415; Mc-Cagg v. Woodman, 28 111. 84; Sick-els v. Herold, 36 N. Y. Supp. 488; Clute v. Warner, 8 App. Div. 40; Davis v. Industrial Mfg. Co., 114 N. C. 321; Second Nat Bank v. Hemingray, 34 Ohio St. 381. In this last case, by agreement, the firm deposit was used as a set-off against the debt of an individual partner. Yardley v. Clothier, 49 Fed. R. 337, a case which in a masterly way demolishes Armstrong v. Scott, 86 Fed. R 63, which is contra; but Munger v. Albany Nat. Bank, 85 N. Y. 580, is also contra, but the case is correct on other grounds. See also Sec. 330, post.

6 State v. Brobston, 94 Ga. 95, where state had a lien upon the funds of the bank; Batty v. Scuddy, 10 La. Ann. 404; In re Van Allen, 37 Barb. 225; Seymour v. Dunham, 24 Hun, 93.

7 Yardley v. Clothier, 49 Fed. R. 337; Miller v. Franklin Bank, 1 Paige, 444.

8 Fort v. McCulley, 59 Barb. 87.

9 Lamb v. Pannell, 28 W. Va. 663.

10 Merchants' Ex. Bank v. Fieldner, 92 Wis. 415.

11Philler v. Woodfall, 32 Wkly. Notes Cas. 183.

12 Harrison v. Harrison, 118 Ind. 179.

Certificates of deposit are governed by the same rule as other general deposits as to a depositor's right to set off.13 This right if waived is ended,14 and cannot be revived by a bill in equity.15