1. Regulations For Paying Deposits

In paying savings-bank depositors numerous questions have arisen, and the answers to the more important will now be given. Savings banks make rules or by-laws for the double purpose of informing their depositors and protecting themselves. These are printed in the pass book issued to depositors and, unless they are unreasonable, form a contract between the two parties. Says Justice Folger: "We hold that in the absence of any rules assented to by its customers, a savings bank is to be governed by the same legal principles which apply to other moneyed institutions. When it has prescribed rules, and its depositor has assented to them, they are the agreement, and each party must keep it to preserve rights against the other. The extent of the duty which the savings bank is under will, in some degree, be measured by the strictness or extent of the rules it has put on itself. Ordinarily, it is bound to the exercise of reasonable care and diligence." 1

2. Depositors Should Know The By-Laws

The bank when giving a book to a depositor should call his attention to the by-laws printed in them, especially if he is not familiar with the language in which they are printed. His ignorance of the language, however, is no excuse for not learning what the by-laws are. It would be strange, indeed, if these simply bound one party to the contract the bank. They are equally binding on both parties. In a Pennsylvania case the Supreme Court made short work of this contention, on the part of a depositor's counsel, by declaring that if he was illiterate and could not read the rules in the bank book this "made no difference. He ought to have requested it to read the rules to him. Common prudence required this precaution." 1

1 Allen v. Williamsburgh Savings Bank, 69 N. Y. 321.

3. Effect Of Changing A Bylaw

Sometimes a by-law is changed. When this is done after a depositor has opened his account and he is not notified of the change, he is not bound thereby. He is regarded as assenting to those by-laws only that were in force at the time of becoming a depositor, unless the subsequent by-laws were made known to him and his assent was given in a formal manner. Should he learn through a newspaper or another depositor that a by-law had been amended or adopted, in short, should he understand the change, and make no objection within a reasonable time, doubtless he would be regarded as assenting thereto. Hut from a permissive statute, authorizing a bank to change its mode of business, a depositor derives no binding inference that his bank has put it into operation. A positive or compulsory statute would have a different effect. A depositor would be bound by this as clearly as by any other statute.2

4. Withdrawing Deposits

Savings banks provide several ways or rules for withdrawing deposits which will now be considered. One rule is that no money can be withdrawn except by the depositor and on the prcscntation of his book. This rule covers the larger number of cases. The depositor appears, presents his book, and makes known his wish. He either writes out a check, or one is prepared for him to sign, or he signs a receipt in a book kept for that purpose, and the money is paid to him.

1 Burrill v Dollar Savings Bank . 92 Pa. 134.

2 More recenntly savings banks have adopted a by-law declaring that any by-law that may be hereafter adopted shall be as effective as existing ones.

As this has received judicial sanction, it ought to be incorporated in the code of every. savings bank.

This method seems simple enough; it could hardly be simpler, yet difficulties constantly arise in following it. Another person gets the book, presents himself, assures the paying teller that he is the depositor, and the money is paid to him. By and by the true depositor appears, and then the paying teller discovers the fraud. Must the bank pay the true depositor ? It is hard, indeed, for him to lose the money. If the bank pays, the loss comes out of the other depositors, which is hard for them. Another by-law says that the bank is protected in paying on the presentation of the book, the object of which is to protect the bank from just such an untoward accident; and the law says that the by-law is reasonable and may be applied to all cases in which the bank has used reasonable care in seeking to pay the rightful person.