The plaintiff was payee of three cashier's checks issued by the X bank. Plaintiff deposited these checks with defendant bank for collection. Defendant bank, instead of collecting the checks for plaintiff on a separate account, mingled them with a mass of paper of its own, representing obligations of the X bank, and used the entire fund to offset obligations of its own held by the X. bank. This transaction left a balance of $2882 due defendant bank, which the X bank remitted by draft. Before the clearance of this draft, defendant bank became insolvent, and plaintiff sued to impress a trust upon the proceeds of the draft, deposited with the state banking commission. Held, that it must be presumed, in the absence of evidence to the contrary, that defendant collecting bank applied to its debt due the X bank its own obligations, and received the draft as representing in part the amount of plaintiff's checks, and hence, on defendant bank's becoming insolvent, plaintiff was entitled to impress a trust on such draft or its proceeds. Peoples Nat. Bank v. Moore (1928) 25 F. (2nd) 599.

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