The complaint states no cause of action either for a declaratory or coercive judgment against the defendant, appellant.
*95Plaintiffs sued defendant Central Honover Bank and Trust Company, as though the moneys which it received through the fraud of its depositor were moneys still belonging to the plaintiffs. But the moneys received by that bank were not the moneys of the plaintiffs, but were moneys from the general funds of the Chase National Bank, and were paid under the obligation of the Chase National Bank to pay the checks which it certified. The funds arose through plaintiffs receiving on August 31, 1929, telegraphic instructions ■— supposed to have been sent by their correspondents, but which were, in fact, forged — at the direction of the defendant Waggoner, who was president of the Telluride Bank, Telluride, Colo. Under these instructions plaintiffs paid various sums aggregating $500,000 to the defendant Chase National Bank for the credit of the Telluride Bank. On that day Waggoner called at the Chase National Bank with three cashier’s checks of the Telluride Bank, drawn on the Chase National Bank, which were blank as to date, amount and name of payee. Waggoner completed the blanks by writing in the date, his own name as payee, and the sums of $225,000, $200,000 and $70,000, in the several checks.
The $225,000 check was certified the same day and indorsed to the order of the defendant First National Bank of Pueblo, Colo., and mailed to the latter to be placed to the credit of the Telluride Bank. The Pueblo Bank transmitted $50,000 in currency to the Telluride Bank, and it paid $30,000 to another bank in Salt Lake City, Utah, to the credit of one Anderson. Anderson is not sued. The Pueblo Bank never collected this certified check, since, before it could do so, the fraud of Waggoner was discovered.
The check for $200,000 was indorsed by Waggoner on the same day and deposited with the defendant, appellant, here, Central Hanover Bank and Trust Company, and indorsed to the credit of the Telluride Bank; and the check for $70,000 was left for similar deposit, which was canied out on the next succeeding business day, which was September third.
The Central Hanover Bank and Trust Company had the two checks for $200,000 and $70,000 certified on September third, and on the next day these checks were paid through the Clearing House. The Central Hanover Bank and Trust Company then applied to the credit of the Telluride Bank more than $200,000 in payment of past due notes held by it of the Telluride Bank, of the defendant Waggoner and of the Norwood Cattle and Loan Company, a Colorado corporation which Waggoner controlled.
On September fifth the Telluride Bank was closed as insolvent by the Colorado authoiities.
It is alleged in the complaint that various of the defendants *96knew certain of these facts, for the purpose of charging defendants with knowledge of the fraud. If these allegations are insufficient to charge the Central Hanover Bank and Trust Company with knowledge, that bank would not be liable.
The judgment asked for is a declaratory judgment as to the rights and relations between plaintiffs and defendants in respect of the $500,000, and for an accounting by defendants, and that each be directed to pay over such part of the sum of $500,000 as shall have come into the possession of each of the defendants.
In the absence of some restriction in the indorsement to the Chase National Bank, that bank became the owner of the draft, and the moneys received by the Central Hanover Bank from the Chase National Bank were from the Chase National Bank’s general funds. Even if the moneys deposited in the Chase National Bank were regarded as plaintiffs’ property, the payment to the Central Hanover Bank and Trust Company was not made from those moneys.
Here the plaintiffs say that the moneys taken from them through the fraud of Waggoner have been traced in the hands of the defendant Central Hanover Bank and Trust Company. These moneys, however, were deposited with the Chase National Bank without restriction, and became that bank’s property.
The Chase National Bank certified the checks drawn on it, which were deposited with the Central Hanover Bank and Trust Company and paid out of its own general funds in discharge of its own obligations to meet that certification, and not from any specific fund received from or for the plaintiffs. Whatever moneys came to the defendant Central Hanover Bank and Trust Company were the Chase National Bank’s moneys. The Central Hanover Bank and Trust Company would, therefore, be hable only if, at the time it became a holder for value, it had notice that it was receiving moneys fraudulently or feloniously obtained of the plaintiffs, since plaintiffs are in the position of a bank which paid a forged instrument to an innocent payee, and such bank could not recover the moneys back unless the party receiving the moneys had knowledge of the forgery, or received the funds without any consideration.
The complaint itself alleges that the Central Hanover Bank and Trust Company received the checks drawn on the Chase National Bank for value, which value was the crediting of the amounts of the checks to the Telluride Bank debt.
At the time of the transaction there was an indebtedness of the Telluride Bank to the Central Hanover Bank and Trust Company alleged in the complaint to have been more than $200,000. The *97Central Hanover Bank and Trust Company was thus, prior to the time of certification, a holder of the checks in due course for value, because of the crediting by it of the amount of the checks to the account of the Telluride IBank, and because of the indebtedness which was due from the Telluride Bank to the Central Hanover Bank and Trust Company, and because of the certification of the checks and the relations arising therefrom. The bank receiving the deposit, unless it was stipulated to the contrary, is entitled to consider the moneys as part of its general funds, and it could be loaned as other moneys and treated as the bank’s property, the bank’s duty being merely to discharge the debt caused by the deposit by honoring depositor’s checks.
Title to drafts or checks or moneys deposited in a bank is immediately vested in and becomes the property of the bank. The bank acquires this money by the implication of an agreement to pay consideration of an equal amount when called upon by the depositor through his checks.
Nor is there any allegation sufficient for the purpose, that the Central Hanover Bank and Trust Company had notice of the fraud which is alleged to have been perpetrated on plaintiffs. Plaintiffs allege that the Central Hanover Bank and Trust Company “ had knowledge or notice of the facts hereinbefore alleged as to the manner in which the said checks had been issued.” (This lefers to their having been drawn in blank by the teller of the Telluride Bank; that the date, name of payee and amount of payment was left blank, and that Waggoner had filled these blanks in and proceeded to deposit the checks to the credit of his bank.) But this did not indicate any illegality in the instruments, because where an instrument is wanting in any particular, the person in possession has prima facie authority to complete it by filling up the blanks. And up to the time of certification, the sole knowledge imputed to the Central Hanover Bank and Trust Company is that it had knowledge or notice or reasonable cause to believe that the Telluride Bank was insolvent, or that insolvency was imminent, and that it did not own such a large amount of money as had been deposited with the Chase National Bank or as had been drawn against this amount, and that no part of the fund could properly be withdrawn by the Telluride Bank by the cashier or by the president, either in the name of the Telluride Bank or otherwise, and that inquiry by them of the banks would have exposed the fraud. This allegation being contrary to the law as to the effect of certification, i. e., that the certifying bank acknowledged that there were sufficient funds of the maker to meet the check, and that *98it had been set aside for such purpose, annuls the effect of this allegation of notice.
The contention of the plaintiffs is that the Central Hanover Bank and Trust Company should, as a matter of law, have considered where the funds came from, and should not have been satisfied with the certification of the Chase National Bank, on which the checks were drawn, that the funds were there available. It should have gone beyond the assurance of their existence and found out where the Chase National Bank received the funds which it certified it had available.
There was no such duty upon the Central Hanover Bank and Trust Company. Bad faith alone will deprive a bona fide holder of that status. Mere negligence or evidence creating suspicion will not defeat a purchaser of a negotiable paper. Actual bad faith must be shown before it can be charged with notice of the defect or infirmity which will prevent collection. One who receives negotiable paper does not owe to the party who puts the paper afloat the duty of active inquiry in order to avert the imputation of bad faith.
I think that the allegations of the complaint do not show bad faith on the part of the defendant Cential Hanover Bank and Trust Company. Certification took place on September 3, 1929, and the notice at that time has been discussed.
The complaint alleges further that prior to three p. m. on September 4, 1929, the Cential Hanover Bank and Trust Company had knowledge that the amount, of $270,000 had been obtained from the banks by fraud as aforesaid. It is not alleged when on September 4, 1929, prior to three p. m., the defendant had this notice, and there is no allegation as to any particular time prior to three p. m. on September 4, 1929; and there is not a definite allegation in the complaint as to the nature of the notice which the defendant bank is said to have had. Such allegations may not be enlarged by inference. .
This allegation refers to the events of September 4, 1929. Whatever notice the Cential Hanover Bank and Trust Company had on September fourth does not affect the holder of the checks in due course for value, and title to these funds would not thereby be revested in the plaintiffs and transferred from defendant’s possession and title acquired by deposit and certification.
Neither is there a right to a declaratory judgment with respect to these funds, since there is no specific fund to be recovered. But, even if the action be regarded either as an action to recover a specific fund, or to recover damages, the plaintiffs have asserted rights as against these defendants, and such rights, if they exist, *99could be enforced in the usual forms of actions at law. Since there is no action at law, because the defendant, appellant, is a bona fide holder of such funds as it received without notice or knowledge requisite to put it upon inquiry, according to the allegations of the complaint, and since no declaratory relief can be granted where coercive remedies are proper, the complaint should be dismissed as against the Central Hanover Bank and Trust Company.
The order appealed from should, therefore, be reversed, with ten dollars costs and disbursements, and the motion to dismiss the complaint as to the defendant Central Hanover Bank and Trust Company granted, with ten dollars costs.
Merrell, J., concurs.
Order affirmed, with ten dollars costs and disbursements, with leave to defendant, appellant, to answer within twenty days from service of order upon payment of said costs and ten dollars costs of motion at Special Term.