tiable and payable at the bank, and was duly indorsed and sent to it for collection. The depositor repudiated the act of his banker, and sued the bank to recover an alleged balance, which it is conceded he is entitled to recover, unless the bank has the right to set off the amount of the note above mentioned. There is no question but that the bank acted in good faith, nor is there any dispute but that the plaintiff below owed the note to Stone, Sons, & Co.

It is settled that as soon as money is deposited in a bank, the depositor and the bank assume the relation of debtor and creditor. The money at once becomes the property of the bank, and unless the money deposited was designed for a special purpose, or unless there exists an agreement to the contrary, the bank has the right to apply a sufficient amount of the deposit to the payment of any debt due from the depositor to the bank: Lamb v. Morris, 118 Ind. 179. If the Bedford Bank had discounted the note of Stone, Sons, & Co., or taken an absolute assignment to itself of the paper, there would be no dispute about its right to retain the amount due out of the depositor's account. Is the right of the bank to set off the sum admitted to be due on the note destroyed because the amount was paid, not by way of discount, but in consequence of the note having been made payable at the bank? The authorities are not agreed upon the question, but upon principle, and in consonance with the weight of authority, it seems to us the right of the bank to set off the amount must be affirmed. In England, it is the settled rule that if a note is made payable at a particular bank, the maker thereby authorizes the bank to pay it out of his funds on deposit, or by advancing the amount to his credit. Accordingly, in Robarts v. Tucker, 16 Ad. & E., N. S., 560, Parke, B., said: "If this were the ordinary case of an acceptance made payable at a banker's, there can be no question that making the acceptance payable there is tantamount to an order, on the part of the acceptor, to the banker to pay the bill to the person who is, according to the law merchant, capable of giving a good discharge for the bill." So in Kymer v. Laurie, 18 L. J. Q. B. 218, certain bankers holding in their hands an amount of money on account of a depositor, paid a bill of exchange which had been made payable at their banking-house, when it became due and was presented to them by the holder. No orders to pay the acceptance had been given, nor had the authority contained on the face of the bill been countermanded. It was held that the

bankers had authority to apply the funds of the depositor in their hands to the payment of the acceptance. This rule, with some modifications, has been recognized almost universally by the courts in this country. Accordingly, we find it declared in an early case (State Bank v. Armstrong, 4 Dev. 519) that there can be no question that if a bank pays off a note or acceptance of a depositor, payable at the bank, this constitutes a proper debit in the account of the depositor; and in Mandeville v. Union Bank, 9 Cranch, 9, Chief Justice Marshall said: "By making a note negotiable in bank, the maker authorizes the bank to advance on his credit, to the owner of the note, the sum expressed on its face."

Many well-considered cases go to the full extent of holding that a note payable at a banking-house is, in effect, the equivalent of a check or draft on the bank in favor of the holder of the note, and that the bank is in default if it allows the paper to go to protest, in case the maker has money due him from the bank on account generally applicable to the payment of drafts or checks: Commercial Nat. Bank v. Henninger, 105 Pa. St. 496; Indig v. National City Bank etc., 80 N.Y. 100; Ætna Nat. Bank v. Fourth Nat. Bank etc., 46 N. Y. 82; 7 Am. Rep. 314. See also Randolph on Commercial Paper, sec. 1441; Daniel on Negotiable Instruments, sec. 326 a; 2 Morse on Banks, sec. 557; Bolles on Banks and Depositors, sec. 403.

A contrary view has, however, been vigorously maintained: Grissom v. Commercial Nat. Bank, 87 Tenn. 350; 10 Am. St. Rep. 669; Ridgely Nat. Bank v. Patton, 109 Ill. 479. While we are not inclined to the view that a promissory note negotiable and payable at a bank in this state is in all respects the equivalent of a check drawn by the maker against a fund on deposit in the bank, so as to require the banker to pay the note on presentation out of funds applicable to that purpose, we can conceive of no valid reason why a note or bill thus drawn should not be held to authorize the banker to pay, and thereby become subrogated to all the rights of the holder, to the same extent as if it had purchased the paper after maturity. One who has drawn a note or bill payable at a bank must have done so for some purpose, and he cannot be heard to say, after his banker has paid a just debt for which he had given a note, to which the maker claims no defense, that the payment was wholly voluntary and unauthorized. In such a case the banker who has paid the note is entitled to hold it as the equitable owner or purchaser, and is entitled to set it

off in a suit to recover a balance due the depositor on general

account.

The decision in Scott v. Shirk, 60 Ind. 160, upon the facts there involved, is not necessarily opposed to the conclusion above. When a note payable at a bank is signed by three persons, one of whom has an account at the bank, it may well be said that the bank has no power to transfer money depos ited by one of the makers to the payment of the note, without the depositor's consent: Lamb v. Morris, 118 Ind. 179.

The court erred in its conclusions of law upon the facts found.

Judgment reversed, with costs, with directions to the court below to restate its conclusions of law in consonance with this opinion.

BANKS AND BANKING - PAYMENT OF NOTE MADE BY DEPOSITOR PAYABLE AT THE BANK. - When the maker of a negotiable note payable at a bank has at the date of its maturity a general deposit to his credit in the bank sufficient to pay off such note, which deposit is not already set aside for some other purpose, the bank must pay the note, and charge the same against the depositor in relief of his indorsers: German Nat. Bank v. Foreman, 138 Pa. St. 474; post p. 000. But the contrary rule is laid down in Grissom v. Commercial Nat. Bank, 87 Tenn. 350; 10 Am. St. Rep. 669. Compare also National Bunk of Newburgh v. Smith, 66 N. Y. 271; 23 Am. Rep. 48, and particularly note 50-52.

CASES

IN THE

SUPREME COURT

ОР

KANSAS.

IN RE CAMERON.

[44 KANSAS, 64.]

CRIMINAL LAW — OBTAINING GOODS UNDER FALSE PRETENSES. — Where an agent obtains personal property belonging to his principal, and to the immediate possession of which the latter is entitled, by means of false statements made to a third party, the agent is not guilty of obtaining goods or property by false pretenses. Nothing is a false pretense, within the meaning of the statute, which has no tendency to and does not harm a person.

ORIGINAL petition for and proceedings on a writ of habeas

corpus.

J. W. Rose, for the petitioner.

W. H. Robb, county attorney, for the state.

HORTON, C. J. The petitioner, Hannah Cameron, alleges that she is illegally restrained of her liberty by the sheriff of Edwards County, under a warrant issued on the twenty-seventh day of March, 1890, by J. Kenneck, a justice of the peace of that county, charging her with having unlawfully, feloniously, and designedly, by false pretenses, obtained from George W. Crawford an organ of the value of ninety-five dollars.

It appears from the agreed statement of facts that Crawford had purchased, in November, 1888, an organ from Mrs. Cameron, who acted as agent; that he had made a cash payment upon the organ, and gave two promissory notes for the deferred payments. The notes were so executed that the payee was entitled to take possession of the organ at any time, if Crawford failed to pay as the notes matured, or if he undertook to

remove the organ from the place where it was. It also appears that he paid upon the organ sums aggregating sixty-six dollars; that at the time Mrs. Cameron came for the organ, on January 8, 1890, there was due upon the last note between thirty-five and forty dollars; that she stated to him "she was the agent of the Western Temple of Music, of which S. R. Huyett was the general manager; that the company had sent her to take the organ on account of the non-payment of the last note; that she would take the organ to her house, at Macksville, in this state, a few miles distant from where Crawford lived, and that he could have the organ at any time by making payment"; that Crawford relied upon these statements, and surrendered the possession of the organ to Mrs. Cameron. Soon afterward, Crawford went to Macksville to see Mrs. Cameron and make the last payment, but found the organ had been taken to Hutchinson, in this state. It further appears, however, that although Mrs. Cameron had been acting as agent for the Western Temple of Music for about two years, and had sold several organs for the company, that the one purchased by Crawford belonged to her daughter, Mrs. Ursula Searles; that she sold the organ to Crawford as the agent of Mrs. Searles; that after the last note was overdue, at the request of her daughter, and as her agent, she obtained possession of the organ from Crawford, who was then in default upon the last note for an amount exceeding thirty dollars. It also appears that Mrs. Cameron believed at the time she went to Crawford's for the organ that he was about to remove with his family to Texas, and take the organ with him.

According to all the testimony, the conditions of the last note which Crawford had executed for the organ were not complied with. It is also conceded that the holder of the note, under its terms, was entitled to the possession of the organ upon default of payment, or if the purchaser undertook to remove the organ from the place where it was. Upon the facts as disclosed by the testimony, Mrs. Cameron has not been guilty of any public offense. Her daughter, Mrs. Searles, was legally entitled to the possession of the organ at the time that Mrs. Cameron made the demand for it. It is true, according to the testimony of Mr. Crawford, that she made false statements concerning the Western Temple of Music, and the order alleged by her to have been given by S. R. Huyett, its general manager; but nothing is a false pretense, within the