BANKS AND BANKING - HOLDER OF DRAFT PAID FOR BY CHECK ON ISSUING BANK AS PREFERRED UPON DRAWER'S INSOLVENCY

Authors

Abstract

A depositor received from his bank in exchange for his check a New York draft drawn by the bank payable to a third person. The draft was dishonored because of the insolvency and closing of drawer. After redemption of the draft the depositor sought to establish a preferred claim therefor against the bank's assets. An Ohio statute declared that when there remains unpaid at the time the bank is closed a check drawn by a depositor which has been presented to the drawee bank "for collection and payment," charged to the depositor's account, and a draft issued in payment thereof, the assets of the bank shall be impressed with a trust for the payment of such draft. Held, the statute applied and the depositor was entitled to preference over general creditors. Fulton, v. Baker-Toledo Co., (Ohio 1932) 182 N. E. 513.

Recommended Citation

BANKS AND BANKING - HOLDER OF DRAFT PAID FOR BY CHECK ON ISSUING BANK AS PREFERRED UPON DRAWER'S INSOLVENCY, 31 Mich. L. Rev. 843 (1933).
Available at: https://repository.law.umich.edu/mlr/vol31/iss6/11