(2.) A banker who accepts or engages to pay a cheque must include such cheques in the return of his issue of notes.

7 & 8 Vict. (1844), c. 32, s. 11.

17 & 18 Vict. (1854) c. 83, s. 11.

80. 1. By the custom of bankers, the contract between a banker and his customer having an ordinary drawing or current account with him, is to pay on demand, either to him or to any one else to whom his customer may assign them, whatever funds he may have at his customer's credit, within a reasonable time after he has received them, and to accept his customer's bills to that amount (a).

2. By the custom of bankers possession of funds is equivalent to acceptance, and admission of funds is a legal acceptance of a cheque drawn by a customer (b).

3. A verbal promise to pay, or a collateral writing promising to pay, or any mark such as initials placed on a cheque, the well understood meaning of which is a promise to pay, is a legal acceptance by a banker having funds of his customer.

4. The Acts, 1 & 2 Geo. 4 (1821), c. 78, s. 2, and 19 & 20 Vict. (1856), c. 97, s. 6, requiring the acceptance of a bill to be in writing on the bill, do not apply to the promise of a banker to pay a cheque, having funds of his customer.

Foley v. Hill, 2 H. L. Ca., 28.
Robarts v. Tucker, 16 Q. B., 560.

(a) Marzetti v. Williams, 1 B. & Ad., 415. Swan v. Bank of
Scotland, 2 Mont. & Ayr., 656.
Watts v. Christie, 11 Beav., 546.
Rolin v. Steward, 14 C. B., 595.

Ardern v. Rowney, 5 Esp., 254. Kilsby v. Williams, 5 B. & Ald.,

(b) Stevens v. Hill, 5 Esp., 247. Robson v. Bennett, 2 Taunt., 388. 816. George v. Surrey, 1 M. & M., 516. Boyd v. Emerson, 2 A. & E., 184. Marzetti v. Williams, 1 B. & Ald., 415. Robarts v. Tucker, 16 Q. B., 570.

81. 1. A cheque is payment unless dishonoured, and tender of payment by cheque is good, unless objected to on that account.

2. A cheque, to be good tender, must be unconditional; and if the creditor refuses it as being conditional, he may commence an action against the debtor before he returns the cheque (b).

3. But the fact of a cheque being drawn in favour of any one is no proof of payment, as it may be drawn in any one's name: there must be evidence that the money came into the creditor's hands, as by his indorsement (c).

4. A cheque is not evidence per se of a loan from the drawer to the payee (1): nor to establish a set-off (2): nor of a loan from

the drawee (a banker) to the drawer (3): without further evidence of the circumstances under which it was given (d).

5. But, if a debt be proved to have existed between the drawer and the payee, a cheque, though not given directly by the drawer to the payee, if proved to have passed through the payee's hands and been paid to him, is prima facie evidence of the payment of the debt, unless contradicted by collateral evidence (e).

(a) Pearce v. Davis, 1 Mo. & Rob., 365. Jones v. Arthur, 8 Dowl., 442. Bevan v. Hill, 2 Camp., 381.

(b) Hough v. May, 4 A. & E., 954.

(c) Egg v. Barnett, 3 Esp., 196. Cary v. Gerrish, 4 Esp., 9.

(d) (1) Cary v. Gerrish, 4 Esp., 9. Lloyd v. Sandilands, Gow, 15. Pearce v. Davis, 1 Mo. & Rob., 365.

(2) Aubert v. Welsh, 4 Taunt., 293.

(3) Fletcher v. Manning, 13 L. J., Ex., 150.

(e) Egg v. Barnet, 3 Esp., 196. Mountford v. Harper, 16 M. & W., 825. Boswell v. Smith, 6 C. & P., 60.

82. When a customer has placed securities in the hands of his banker, and is allowed to draw against them in a certain wellunderstood way, the banker cannot change the usual course of dealing, and dishonour his customer's cheques without giving him notice.

Cumming v. Shand, 5 H. & N., 95.

83. A banker who pays a cheque must cancel it by crossing out the drawer's signature, under a penalty of £50.

55 Geo. 3 (1815), c. 184, s. 19.

84. Paid cheques are the property of the drawers, who may demand them back at any time: unless they be overdrafts, for then the banker has a right of action on them.

Partridge v. Coates, 1 Ry. & Mo., 156. Burton v. Payne, 2 C. & P., 520. Reg. v. Watts, Den. C. C. R., 14.

85. No cheque, draft, or order for the payment of money, drawn by any person or accountant authorised to draw for the public service, is payable at the Bank of England after 3 p.m.

4 & 5 Will. 4 (1834), c. 15, s. 21.

86. 1. If a banker cancels the drawer's signature to a cheque, and if, before actual payment, he discovers any reason why he should not pay it, he may withhold payment (a).

2. But if the money be actually paid over to the presenter of the cheque in mistake, the property in the money is gone from the banker, and he cannot retake it (b).

(a) Fernandey v. Glynn, 1 Camp., 426.

(b) Chambers v. Miller, 13 C. B., N. S., 125.

87. Cheques are within the "summary procedure on Bills of Exchange Act" (a): and may be taken in execution (b).

(a) 18 & 19 Vict. (1856), c. 67. Rochford v. Daniel, 1 F. & F., 602. Eyre v. Watter, 5 H. & N., 460.

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

88. 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 of 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. (1853), c. 59, 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.

89. A married woman or an infant cannot draw a valid cheque except as an agent.

90. 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. Bayley, Ridg. ca. t., Hard., 202. Morrell v. Wootton, 16 Beav., 197.

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

21. 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).

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.

(e) Young v. Grote, 4 Bing., 253.

(c) 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.

92. 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).

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

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

93. 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. 94. 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.

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

95. 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.

96. 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.

97. 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 or eluded (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.

(c) Watson v. Russell, 3 B. & S., 34.

98. 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. & R., 401. Robinson v. Hawksford, 9 Q. B., 52. Laws v. Rand, 3 C. B. N. S., 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.