and had taken proceedings looking to the appointment of a receiver, the bill of complaint upon which the receiver was appointed having been signed and sworn to on the 17th day of July. It appears from the opinion of this court in Austin v. Hayden, supra, that they were hopelessly insolvent as far back as July, 1907, and that Hayden, Stone & Co. were held to be parties to the fraud of Cameron Currie & Co. in their dealings with their customers after June 23, 1908. We are therefore of the opinion that the trial judge was right in his conclusion that the transaction between Cameron Currie & Co. and Mr. Miller was a fraudulent one, and that the title to the check in them, by reason thereof, was defective.

On the trial of this cause, the plaintiff first introduced the check in evidence, and thereupon rested. The defendant thereupon proved the fraud of Cameron Currie & Co. in obtaining the check. By virtue of section 61 of the negotiable instruments law, the burden thereupon rested upon the plaintiff to prove that it acquired the title as a holder in due course, and it became incumbent upon it to show affirmatively that as a holder in due course, under the conditions enumerated in section 54 of said negotiable instruments law, it took the check in good faith and for value. Thompson v. Village of Mecosta, 127 Mich. 522 (86 N. W. 1044); Merchants' National Bank v. Wadsworth, 166 Mich. 528, 531 (131 N. W. 1108).

On the 17th day of July, Cameron Currie & Co. made four separate deposits in the plaintiff bank, and the aggregate deposits of that day amounted to $75,968.78. In accordance with the bank's business methods, the aggregate amount of the items deposited, as shown by the deposit slips when received by the teller of the bank, was credited by him in the passbook of the customer, on the top of the first leaf of which book was printed the following:

"Notice.-Checks on this bank will be credited conditionally. If not found good at the close of business they will be charged back to depositors, and the latter notified of the fact. Checks on other city banks will be carried over for presentation through the clearing house on the following day. This bank, in receiving check or draft on deposit or for collection, acts only as your agent, and, beyond carefulness in selecting agents at other points and in forwarding to them, assumes no responsibility. Should returns sent by collecting agents for said item be dishonored, the amount will be charged to account and the draft delivered to customers."

It also appears that at the close of the business on July 16th the brokerage firm had a credit balance of $175.97, and from the books it appears that on the 17th of July checks of Cameron Currie & Co. drawn against their account were paid amounting to $74,963.11, leaving a balance to the credit of the firm on the books of the bank at the close of business on that day of $1,181.67. There is no question that in the instant case, in accordance with the terms of the contract entered into between the bank and the brokerage concern, checks were credited conditionally, and, if they were not found good at the close of business, they would be charged back to the depositor.

It seems to be a general rule that when checks or other commercial paper are deposited in a bank indorsed "for collection," or where there is a definite understanding that such is the purpose of the parties at the time of the deposit, the title to the paper remains in the depositor. See note to Fayette National Bank v. Summers, 105 Va. 689 (54 S. E. 862, 7 L. R. A. [N. S.] 694; 5 Cyc. p. 493. And the mere fact that the depositor is allowed to check against the credit does not change the import of the transaction, so as to preclude the bank from charging back the amount of credit if the check deposited is not paid. The bank may, as a matter of favor and convenience,

permit checks to be drawn against it before payment; the depositor, in the event of nonpayment, being responsible for the sums drawn, not by reason of his indorsement, the check not having ceased to be his property, but for money paid. 3 Ruling Case Law (under title "Banks"), p. 522.

This case has some of the features of the case of In re State Bank, 56 Minn. 119 (57 N. W. 336, 45 Am. St. Rep. 454), in which case the supreme court of that State, in an opinion written by Mr. Justice Mitchell, said:

"But, after all, the question is one of the agreement of the parties, either express or implied, from the general course of business between them. There can be no doubt that, if a draft or other paper is delivered to a bank for collection, the mere fact that the indorsement of the owner is unrestricted will not, as between him and the bank, make the latter the owner of the property.

"Neither is it conclusive upon the question of ownership of the paper that before collection the amount of it is credited to the customer's account, against which he has the privilege of drawing by check. It has been frequently held, with the approval of the best text-writers, that if paper is delivered by a customer to a bank for collection, or 'for collection and credit,' a credit of the amount to the customer before and in anticipation of collection will be deemed merely provisional, and the privilege of drawing against it merely gratuitous, and that the bank may cancel the credit or charge back the paper to the customer's account, if it is not paid by the maker or drawee. Giles v. Perkins, 9 East. 12; Levi v. National Bank, 5 Dill. 104 [Fed. Cas. No. 8,289]; Balbach v. Frelinghuysen [C. C.], 15 Fed. 675. The right of banks to do this in case of the deposit of checks on other banks, without any special contract, is generally exercised and recognized. This is inconsistent with the idea that the title to the checks passes absolutely to the bank, and is only consistent with the theory that the bank is the agent of the customer for collection, notwithstanding the credit of the latter. 2 Morse, Banks, § 586; Hoffman v. Bank, 46 N. J. Law, 604.

"Of course, in all such cases the banker, like a factor, has a lien for advances made on the faith of the paper, and consequently the claim of the customer may be modified by the state of his account. No such question, however, arises in this case; the balance of the petitioners' account, independent of these drafts, being in their favor at the time of the failure of the bank. The authorities on this subject are quite fully collated in Morse on Banking, § 573 et seq. See, also, Paley, Ag. 91, note; and Story, Ag. § 228, note 2."

See, also, National Commercial Bank v. Miller, 77 Ala. 168 (54 Am. Rep. 50).

Under the contract here entered into between the bank and the brokerage concern, it is clear that the bank became the latter's agent for collection of the checks, and could not, it is needless to suggest, be the owner of the paper at the same time.

It is contended, however, that, as the books of the bank disclosed that there was a credit of $175.97 at the beginning of business on July 17th, that the credit balance of the firm at the close of business on that day was $1,181.67, and the check in question amounted to $3,526.57, it is conclusive that at least a portion of the amount of the check had been drawn against, and that the bank should have a lien for at least that amount on the proceeds of the check.

The transactions in Cameron Currie & Co.'s checking account on July 17th are thus tabulated in defendant's brief: