The Theory and Practice of Banking

99. 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.

100. 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.

101. 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.

102. 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.

103. 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. Maw v. Pearson, 28 Beav., 196.

Lockwood v. Abdy, 14 Sim., 437. 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, 24 Beav., 302. Hardy v. Caley, 33 Beav., 365.

104. 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. Lawrence, 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., 446.

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

108.

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.

(a) Ex parte Rigby, 19 Ves., 462. Stone v. Marsh, 6 B. & C., 551. Husband v. Davis, 2 Low. M. & P., 50.

(b) Carr v. Read, 3 Atk., 695. Innes v. Stephenson, 1 Mo. & Rob., 145.

3. If any of the assignees or Trustees die the right remains with the survivors: and if any become disqualified, as by absconding, going to reside abroad, equity will direct the funds to be paid to the remaining ones.

Ex parte

Staples v. Staples; Shortbridge's case, 12 Ves., 28. Collins, 2 Cox., Eq. Ca., 427. Ex parte Hunter, 2 Rose, 363. 13 & 14 Vict. (1850), c. 60, s. 22.

105. 1. If a banker, either at the request of a customer, or when a cheque is presented by the holder or his agent, places a "mark" on it as by his initials, signifying that the cheque is good and will be paid, such "mark" is a legal acceptance of the cheque by the banker (a).

2. A cheque so "marked" or accepted becomes a bank note of the banker who makes it (b).

(a) Robson v. Bennett, 2 Taunt., 388.

(b) 7 & 8 Vict. (1844), c. 32, s. 11. 17 & 18 Vict. (1854), c. 83, 9. 11. 33 & 34 Vict. (1870), c. 97, s. 45.

106. 1. A banker must not pay any cheque of his customer presented after he has received notice of his having committed an act of bankruptcy (a), or of his death (b).

2. Payment of cheques notified or presented before such notice are good, and may be enforced by the holder; but payments after such notice are bad and will not discharge the banker (c).

(a) 1 Jac., 1, c. 15, s. 14.

Vernon v. Hankey, 2 T. R., 119. (b) Tate v. Hilbert, 2 Ves., jun., 111.

10. 1. If a banking company has several branches, each with its own customers and accounts, each branch is considered as an independent bank, for the purpose of receiving and transmitting notice (a).

2. Each branch must collect its own cheques and bills, and time will not be enlarged so as to permit it to collect them through its head office (b).

(a) Corlett v. Jones; Clode v. Bailey, 12 M. & W., 51.

(b) Woodland v. Fear, 7 E. & B., 519.

108. If a person changes a cheque as a favour for another person, and if the cheque be duly presented and dishonoured, he may give notice of dishonour, and recover the money.

Woodland v. Fear, 7 E. & B., 519.

109. 1. A LETTER OF CREDIT is a written request by one person to another requesting the latter to give credit to a person named in it.

2. If the request is unconditional, it is termed an OPEN CREDIT.

3. If the request be on the condition that bills of lading be deposited as collateral security it is termed a DOCUMENT CREDIT.

4. A MARGINAL letter of credit is one by which a person named in the margin guarantees to another person that he shall receive credit from, or have his bills accepted by, another person.

110. 1. Letters of credit must be stamped as bills.

2. Except letters of credit, whether in sets or not, sent by persons in the United Kingdom to persons abroad, authorising drafts on the United Kingdom.

33 & 34 Vict. (1870), c. 97, s. 48, § 1, and sched.

111. 1. If a banker pays a letter of credit upon a forged signature he is liable (a).

2. The 16 & 17 Vict. (1853), c. 59, s. 19, does not protect a banker paying a letter of credit with a forged signature (b).

(a) Orr v. Union Bank of Scotland, 1 Macq., H. L. Ca., 513.

(b) British Linen Co. v. Caledonian Insurance Co., 4 Macq., H. L. Ca., 107.

112. 1. If a person obtains a letter of credit from a banker for a sum paid down, he may demand repayment without producing the letter.

2. The banker can only prove payment by producing the draft of the person in whose favour it is drawn.

Orr v. Union Bank of Scotland, 1 Macq., H. L. Ca., 513.

113. The indorsee of a marginal letter of credit, not being on the face of it a document credit, is not bound in the absence of notice to inquire whether it is being used for the purpose for which it is granted.

Maitland v. Chartered Mercantile Bank of India, London, and China, 2 Hem. & Mill., 440.

114. 1. The holder of a banker's circular letters may demand payment of them from himself, as well as from his correspondents abroad.

2. But he is not bound to cash them unless they are returned to him, or he receives an indemnity.

Conflans Stone Quarry Co. v. Parker, L. R., 3 C. P., 1. 115. The following are exempt from stamp duty—

1. Any draft or order drawn by any banker upon any other banker, not payable to bearer or order, and used solely for the purpose of settling or clearing any account between such bankers.

2. Any letter written by a banker to any other banker directing the payment of any sum of money, the same not being payable to bearer or to order, and such letter not being sent or delivered to the person to whom payment is to be made, or to any person on his behalf.

33 & 34 Vict. (1870), c. 97, sched.

On the Form of Bills and Notes.

116. No particular form of words is necessary for a Bill or Note.

2. It may be written in any language and on any material; and in pencil (a) as well as in ink.

(a) Geary v. Physick, 5 B. & C., 234.

117. It is usual, but not necessary, to insert the name of the

place where the bill or note is made: if there is no date it will be considered as dated at the time it is made.

De la Courtier v. Bellamy, 2 Show., 422. Hague v. French, 3 B. & P., 173. Giles v. Bourne, 6 M. & S., 73.

118. Bills and Notes were formerly specialties under seal; and therefore no consideration was required to be expressed in them: the same principle holds good now that the formality of sealing is dispensed with, and they are in the form of mere simple contracts. White v. Ledwick, 4 Doug., 247. Grant v. Da Costa, 3 M. & S., 351.

119. A Bill or Note must be an engagement to pay absolutely and at all events

1. 1. A fixed sum of money: and not to make a payment out of a particular fund (a): and not in bills or banker's notes (b). 2. And not pay a sum of money and, or, do something else (c). 3. And not pay a sum of money, and adding, or deducting, other moneys (d).

(a) Jenny v. Herle, 2 Ld. Raym., 1361. Haydock v. Lynch, 2 Ld. Raym., 1563. Jossellyn v. Lacier, 10 Mod., 294. Banbury v. Lisset, 2 Stra., 1211. Dawkes v. Ld. Deloraine, 2 W. Bla., 782. Carlos v. Fancourt, 5 T. R., 482. Yeates v. Grove, 1 Ves. jun., 280. Leeds v. Lancashire, 2 Camp., 205.

(b) Ex parte Imeson, 2 Rose, 225. Ex parte Davison, Buck, 31. (c) Martin v. Chauntry, 2 Stra., 1271. Smith v. Boheme, cited Ld. Raym., 1362, 1396. Moore v. Vanlute, Bull., N. P., 272. (d) Smith v. Nightingale, 2 Stark., 375.

Bolton v. Dugdale, 4 B.

& Ad., 619. Barlow v. Broadhurst, 4 J. B., Moore, 471. Ayrey v. Fearnsides, 4 M. & W., 168. Davies v. Wilkinson, 10 A. & E., 98. 2. 1. And not payable on a contingency (a)

2. The happening of the contingency before action brought does not cure the defect (b).

(a) Pearson v. Garrett, 4 Mod., 242. Beardsley v. Baldwin, 2 Stra., 1151. Carlos v. Fancourt, 5 T. R., 482. Roberts v. Peake, Burr., 323, Leeds v. Lancashire, 2 Camp., 205. Williamson v. Bennett, 2 Camp., 417. Hill v. Halford, 2 B. & P., 413. Hartley v. Wilkinson, 4 Camp., 127. Clarke v. Perceval, 2 B. & Ad., 661. Drury v. Macaulay, 16 M. & W., 146. Alexander v. Thomas, 16 Q. B., 333. Palmer v. Pratt, 2 Bing., 185. Worley v. Harrison, 3 A. & E., 669. Robins v. May, 11 A. & E., (b) Hill v. Halford, 2 B. & P., 413. 3. 1. The payee must be a definite person capable of being ascertained at the time the instrument is made (a).

214.

2. A Bill or Note payable after date to the officer for the time being of a company is void (a).

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