It is apparent that this question may take different phases. First, we may consider the question as between the owner and the bank to which he consigns the paper for collection. This bank, for want of a better term, we will call, after the analogy of carriers, the initial bank. The situation as to the holder after collection of the proceeds and the final crediting of them in the initial bank differs from the situation before being credited there. If the proceeds have been collected and credited, the relation resulting between the depositor and the bank will vary with the instruction given or the course of dealing between the parties. It may also be varied by the fact that the initial bank was insolvent when it received the collection. Before collection has been made, the holder may have rights which are controlled by the form of indorsement to the initial bank or the form of its communication of the paper to a correspondent bank. Between the banks doing the collecting, the initial bank, when the paper is credited to it, will be in the same situation relative to the secondary bank as the holder occupies toward the initial bank when it has credited the proceeds after collection to him. The situation of the secondary bank may vary with its claims against the initial bank and the nature of the indorsements on the paper. The whole situation as between the various parties will be subject to a sudden change upon the insolvency of any of the parties. These various questions will be considered in the order of the holder's rights, the initial bank's rights, and the correspondent bank's rights in the proceeds. Most of the law upon this subject has been produced in the last decade or two.

1 Wingate v. Mechanics' Bank, 10 Pa. 104.

2 Am. Exp. Co. v. Parsons, 44 I11. 313. This case is remarkable for two reasons: (1) In Illinois an express company collecting paper is liable for all connecting companies, which is the exact contrary of the rule applied here to banks; and (2) the court recognizes that a deposit for collection is a bailment when given to an express company. See note 7 to Sec. 184, ante.