United States Supreme Court Cases & Opinions

U.S. Supreme Court

National Bank v. Insurance Company, 104 U.S. 54 (1881)

National Bank v. Insurance Company

104 U.S. 54

APPEAL FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE DISTRICT OF MARYLAND

Syllabus

1. Although the relation between a bank and its depositor is that merely of debtor and creditor, the money which he deposits, if held by him in a fiduciary capacity, does not change its character by being placed to his credit in his bank account.

2. The bank contracts that it will pay the money on his checks and, when they are drawn in proper form, it is bound to presume, in case the account is kept with him as a trustee or as acting in some other fiduciary character, that he is in the course of lawfully performing his duty, and to honor them accordingly; but when against such an account it seeks to assert its lien for an obligation which it knows was incurred for his private benefit, it must be held as having notice that the fund is not his individual property, if it is shown to consist in whole or in part of money which he held in a trust relation.