OVERDRA W. To draw bills or checks upon an individual, bank, or other corpora tion, for a greater amount of funds than the party who draws is entitled to. See State v. Jackson, 21 S. D. 494, 113 N. W. 880, 16 Ann. Cas. 87.
When a person has overdrawn his ac count without any intention to do so, and afterwards gives a check on a bank, the holder is required to present it, and on re fusal of payment to give notice to the maker, in order to hold him bound for it; but when the maker has overdrawn the bank knowing ly, having no funds there between the time the check is given and its presentment, the notice is not requisite; Edwards v. Moses, 2 N. & McO. (S. C.) 433, 10 Am. Dec. 615; True v. Thomas, 16 Me. 36. A bank may properly refuse to pay a check which will overdraw the depositor's account, though on the bank books his balance seems to be larger than the amount of the check, be cause a check of his, paid by the bank two days before, had not yet been charged to such depositor; American Exch. N. Bk. v. Gregg, 138 Ill. 596, 28 N. E. 839, 32 Am. St. Rep. 171. The president of a bank who di rects the payment of checks of a customer who has no money in the bank, drawn in payment of property purchased by the cus tomer, has no such interest in the property as will support an action by him for its con version; Kollock v. Emmert, 43 Mo. App. 566.
An overdraft on a bank is in the nature of a loan; it is considered a fraud on the part of the depositor; 'Peterson v. Bank, 52 Pa. 206, 91 Am. Dec. 146. See Merchants' Bank v. Bank, 10 Wall. (U. S.) 647, 19 L. Ed. 1008. Indebitailis assumpsit will lie against the depositor to recover the over draft; Bank of U. S. v. Macalester, 9 Pa. 475; Thomas v. Bank, 46 Ill. App. 461.
A cashier who knowingly permits an over draft is guilty of a breach of trust, and liable to an action to make good the amount, even though the directors had been wont to countenance him in a custom of allowing good depositors to overdraw; Morse, Bank.,
3d ed. § 357.
If in overdraft on a national bank is properly made and allowed, or even if im properly allowed, the entry of the transac tion on the books of the bank just as it oc curred is not a false entry, under R. S. § 5209; Dow v. U. S., 82 Fed. 904, 27 C. C. A. 140. The mere payment of a check which creates an overdraft is not a fraudulent mis application of the funds; 'id.; and where a national bank officer arranges with a de positor in good faith to give him credit be yond his deposit and makes proper entries of his overdrafts, it is not a false entry un der R. S. § 5209; Graves v. U. S., 165 U. S. 323, 17 Sup. Ct. 393, 41 L. Ed. 732. But where the president of a bank, not acting in good faith, permitted overdrafts which he did not believe and had no reasonable ground to believe would be repaid, and it appeared that he intended by the transaction to injure and defraud the bank, the act be comes a crime; Coffin v. U. S., 162 U. S. 664, 16 Sup. Ct. 943, 40 L. Ed. 1109.
It is not an overdraft, if the bank owes the depositor more money than is standing to his credit; Hubbard v. Pettey, 37 Tex. Civ. App. 453, 85 S. W. 509, affirmed with out opinion 101 Tex. 643.
A bank may refuse to pay a check if it overdraws ; Spokane & E. T. Co. v. Huff, 63 Wash. 225, 115 Pac. 80, 33 L. R. A. (N. S.) 1023, Ann. Cas. 1912D, 491. One who has been permitted to overdraw in the past ac quires no right to do so; St. Louis & S. F. R. Co. v. Johnston, 133 U. S. 566, 574, 10 Sup. Ct. 390, 33 L. Ed. 683. It is not re quired to pay a check which overdraws; but if it pays out the credit balance on such check it may take up the check as evidence of such payment; Harrington v. Bank, 85 Ill. App. 212. The holder of a check which overdraws has no right to the actual balance unless the bank agrees to pay it; Dana v. Bank, 13 Allen (Mass.) 445, 90 Am. Dec. 216.