The Theory and Practice of Banking

85. Cheques may be taken in execution

1 & 2 Vict. (1838), c. 110, s. 12. Watts v. Jefferyes, 3 Mac. & Gor., 422

86. 1. If a cheque payable to order bears an indorsement purporting to be that of the payee, the banker is not bound to inquire into its genuineness and an indorsement by procuration is within the meaning the Act (a)

2. But if any other banker cashes it for the bearer, or gives him credit for it, and obtains payment of it from the banker upon whom it is drawn, he will be liable to the drawer (b)

(a) 16 & 17 Vict. (1852), c. 52, s. 19. Hare v. Copland, 13 Ir. Com., L. R., 426. Charles v. Blackwell, The Times, May 6, 1876 (b) Ogden v. Benas, L. R., 9 C. P., 513. Arnold v. The Cheque Bank, The Times, April 24, 1876

87. An infant cannot draw a valid cheque except as an agent Calland v. Loyd, 6 M. & W., 26

88. 1. A cheque is an assignment of a chose-in-action, and when communicated or notified by the holder to the banker is a complete assignment of the fund (a)

2. If a cheque be notified to the banker and the drawer dies before it is paid, the holder is entitled to payment (b)

(a) Snellgrave v. Bailey, Ridg. ca. t., Hard., 202. Morrell v. Wootton, 16 Beav., 197

(b) Bromley v. Brunton, L. R., 6 Eq., 275

89. 1. If a banker pays a cheque with a forged signature, he must bear the loss (a)

2. So if the body of the cheque be written by his customer, and fraudulently altered by another person, so as to be payable for a larger sum than originally drawn, and, the banker not detecting the alteration, pays it, he must bear the loss of the excess (b)

3. But if the customer authorises another person to write the body of the cheque, and that person fraudulently alters the cheque so as to make it payable for a larger sum than authorised, and so the body of the cheque is all in the same handwriting, the banker will not be liable (c)

VOL. II.

4. So if a banker pays a cheque under circumstances which are evidently suspicious, he must bear the loss (d)

(a) Young v. Grote, 4 Bing,, 253. Hall v. Fuller, 5 B. & C., 750 (b) Hall v. Fuller, 5 B. & C., 750

(d) Scholey v. Ramsbottom, 2 Camp., 485. The drawer had torn the cheque into four pieces, and thrown them away. A person found the pieces, pasted them together, and presented the cheque. The banker paid it, and was held liable

90. 1. A banker must pay his customer's cheques strictly in the order in which they are notified, communicated, or presented to him for payment (a)

2. He must debit his customer's account with cheques on the day they are notified or paid, and not on the day they are drawn (b) 3. Sums paid by a banker extinguish the debts created by sums paid to him in strict chronological order (a)

(a) Robson v. Bennett, 2 Taunt., 388. Bodenham v. Purchas, 2 B. & Ald., 39.

Clayton's case, 1 Mer., 572.
Kilsby v. Williams, 5 B. &

Ald., 816. Pennell v. Deffell, 4 De G. M. & G., 372. Bromley v.
Brunton, L. R., 6 Eq., 275

(b) Goodbody v. Foster, Byles, 8th ed.,

p. 25

91. 1. If a banker having funds of his customer wrongfully dishonours his cheque or bill made payable at the bank, so that the customer suffers damage, he has an action against the banker for such damage (a)

2. But such special damage must be laid and proved (b)

3. If the customer becomes bankrupt in consequence of the wrongful dishonour of his cheques, his assignees have an action against the banker

4. The holder of the cheque or bill may sue the banker on the instrument

(a) Marzetti v. Williams, 1 B. & Ald., 415. Rolin v. Steward, L. J. (b) Davies v. The Royal British Bank, The Times, July 10, 1854

92. 1. The holder of a cheque is not entitled to enlarged time by presenting it through an agent

He must therefore pay a plain cheque into his banker's the same day that he receives it, and the banker has all the next day to present it, being the same time that the holder has (a)

2. Receiving a cheque payable to order does not enlarge the time for presentment (b)

3. But the holder of a crossed cheque which can only be paid through an agent, has all the next day to pay it into his banker's, and the banker has all the next day after that to present it (a) (a) Alexander v. Burchfield, 3 Scott, N. R., 555. Fenwick v. Dewar, The Times, Feb. 22, 1867

(b) Fenwick v. Dewar, The Times, Feb. 22, 1867

93. 1. If the holder of a bill gives it up to the acceptor in exchange for his cheque, and the cheque is dishonoured, he may give notice of dishonour of the bill, and sue the drawer and indorsers; and the bill may be declared on as a lost bill (a)

2. A London banker is not guilty of negligence in giving up bills remitted to him for collection by his country correspondents to the acceptor, in exchange for his cheque, though it is dishonoured (b)

(a) Ridley v. Bluckett, Peake, Ad. Ca., 62

(b) Russell v. Hankey, 6 T. R., 12

94. If a creditor, being offered payment by his debtor's agent either in money or by his cheque, prefers his cheque, and the cheque is dishonoured, the debtor is still liable

Everett v. Collins, 2 Camp., 515

95. 1. If a cheque is given on a fraudulent misrepresentation of facts (a): or on a verbal condition which the drawer finds is to be broken (b): he may stop payment of the cheque

2. But he is liable to an innocent holder for value (c)

(a) Mills v. Oddy, 3 Dowl., 722

(b) Wienholt v. Spitta, 3 Camp., 375

96. 1. A cheque may be presented any time within six years of its date to charge the banker, and the drawer of the banker does not fail (a)

2. If the banker fails with sufficient funds of his customer to meet the cheque, the same rule applies to cheques as to bank notes, the payee must present it within banking hours, or remit it by post the day after he receives it; otherwise it is laches and he must bear the loss (b)

3. If the cheque is indorsed away, the drawer's liability is discharged after banking hours of the day after he has issued it: and the liability of each indorser in succession is discharged after banking hours of the day after he has indorsed it

4. If the drawer has not funds to meet the cheque in his banker's hands when he fails, he is liable immediately

(a) Serle v. Norton, 2 Moo. & B., 401. Robinson v. Hawksford, 9 Q. B., 52. Laws v. Rand, 3 C. B. N., 442

(b) Bishop v. Chitty, 2 Stra., 1195. Appleton v. Sweetapple, 3 Doug., 137. Rickford v. Ridge, 2 Camp., 537. Beeching v. Holt's N. P., 315n. Pocklington v. Sylvester, Ch. & Hu., 9th edit., 385. Moule v. Brown, 5 Scott, 694. Bailey v. Bodenham, 16 C. B., N. S., 288

97. The transferee of an overdue cheque is not subject to the equities of the transferor, as the transferee of an overdue bill Rothschild v. Corney, 9 B. & C., 388

98. If a customer pays into his account a cheque drawn upon the banker by another customer, and the banker takes it without engaging to pay it, he may receive it as the agent of the holder, and has the same time to present it and consider if he will pay it, as if it were drawn upon another banker

Boyd v. Emerson, 2 A. & E., 184

99. A cheque drawn by several persons as a collateral security is a joint, and not a joint and several, liability

Other v. Iveson, 3 Drew., 177

100. A change in the names on the cheques supplied by a banking firm to their customers is sufficient notice to them of the change of the partners

Barfort v. Goodall, 3 Camp., 46

101. 1. If a customer has an account of a fiduciary nature, such as Trustee, Executor, or otherwise, a banker may not refuse his cheques on the account, because he may believe that the customer intends to apply the funds in a breach of trust (a)

2. And he will not be liable to the cestui que trust if he is not privy to the breach of trust (b)

3. But if he acts in concert, agreement, or collusion with his customer in committing the breach of trust; and especially if he obtains some benefit by it, as by his customer paying a debt of his own to him by means of cheques drawn on the trust account, he must replace the trust fund (b)

4. The Statute of Limitations does not apply to a banker misapplying a trust fund (c)

(a) Keane v. Robarts, 4 Mad., 332. Nicholson v. Knowles, 5 Mad., 47. Fyler v. Fyler, 3 Beav., 550. Lockwood v. Abdy, 14 Sim., 437. Maw v. Pearson, 28 Beav., 196. Gray v. Johnston, L. R., 3 H. L., 1 (b) Hill v. Simpson, 7 Ves., 152. Keane v. Robarts, 4 Mad., 333. Wilson v. Moore, 1 My. & K., 126, 137. Pannell v. Hurley, 2 Coll., C. C., 240. Fyler v. Fyler, 3 Beav., 550. Bodenham v. Hoskyns, 2 De G. M. & G., 903. Bridgman v. Hill, 14 Beav., 302. Hardy v. Caley, 33 Beav., 365

102. If an account in a bank stands in the name of several persons, unless there be a special contract with the banker to the contrary

1. 1. If they be regarded in law as one person, such as partners (a): executors or administrators (b): each may draw cheques, and payment to one is payment to all

2. Even after a dissolution of partnership and a receiver has been appointed to collect the partnership debts (c)

3. But if one draws a cheque the others may countermand it (d)

(a) Anon., 12 Mod., 446. Henderson v. Wild, 2 Camp., 560. Duff v. East India Co., 15 Ves., 198. Hope v. Cust, cited 1 East., 53. Porter v. Taylor, 6 M. & S., 156. Tomlin v. Lawrance, 3 Mo. & Pa., 555. King v. Smith, 4 C. & P., 108

(b) Pond v. Underwood, 2 Ld. Raym., 1210. Carr v. Read, 3 Atk., 695. Jacome v. Harwood, 2 Ves., 265. Allen v. Dundas, 3 T. R., 125. Ex parte Rigby, 19 Ves., 462. Gaunt v. Taylor, 2 Hare, 413. Smith v. Everett, 27 Beav., 116

& S., 116. King v. Smith, 4 C. & P., 108

(d) Gaunt v. Taylor, 2 Hare, 413

2. But if they be not regarded in law as one person, such as Trustees (a) or Assignees of a bankrupt (b): all must sign. Directors of a company must sign as directors (c): and payment to less than all will not discharge the banker

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The Theory and Practice of Banking, 2권