Page images
PDF
EPUB
[ocr errors]
[ocr errors]

anybody would entertain a doubt that a person who obtains from another, by a fraudulently false pretence, a cheque so crossed with the intent to appropriate the proceeds to his own use, as Huggins did, could make any real title to such cheque; practically it would be the same as if he had stolen it. Having no title himself he had none to give to anybody else, and if this had been the case of an obliging tradesman cashing the cheque for a friend it would have been unarguable. But it is said the respondents, being bankers, are protected from liability to pay over to the appellants the moneys they have received by the honouring of the cheque, by Section 82, which enacts that "where a banker in good faith and "without negligence receives payment for a customer of a cheque crossed generally, or specially to himself, and the customer has no title, or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment." That the respondents in good faith received payment for the cheque is beyond question. I am not, however, quite so sure that it was altogether without negligence, for I must assume the manager at Wantage knew the meaning and legal effect of the crossing, with the words "not "negotiable." This point, however, does not appear to have been raised, and certainly there was no finding upon it at the trial. I will reject it therefore for present purposes. The only remaining question is whether the money received by the respondents' bank, when the cheque was honoured, was so received for any customer of the bank. I cannot come to the conclusion that it was. do I think the evidence would justify such a finding. Huggins had no banking account at all anywhere. It is not necessary to say that the keeping of an ordinary banking account is essential to constitute a person a customer of a bank, for if it were shown that cheques were habitually lodged with a bank for presentation on behalf of the persons lodging them, and that when honoured the amount was credited and paid out to such person, whether with or without any profit to the bank for so presenting them, I would not say that such transactions might not constitute such person a customer within the meaning of the 82nd section; indeed, I think they would. But as between Huggins and the Wantage branch of the respondents' bank, the transactions amounted to nothing of the sort. It is true that for many years the branch bank manager had been in the habit of accommodating Huggins by cashing cheques made payable to him, some crossed and some not crossed; but none marked "not negotiable." All the cheques were cashed across the counter before presentation. Sometimes a portion of the amount was paid by Huggins' direction into the credit of the account kept with the bank by the Wantage Rural District Council, but there was never a cheque so changed without Huggins getting some cash out of it, and upon no occasion was a cheque paid in to

Nor

the credit of the Wantage account above mentioned for presentation on their account; and I can well understand why it was so, because once paid in it could not have been got out without a cheque of the Wantage Rural District Council. I should further observe that the language of the 82nd section is where a banker "receives payment for a customer." In the case before your Lordships, on every occasion of cheques so cashed, the money had already been given to Huggins in exchange for the cheque, the money paid to the respondents has been received on their own account to reimburse them, and not on account of Huggins at all. For these reasons I think the transaction between Huggins and the respondents is not within the protection of the 82nd section, and that as Huggins could give the respondents no better title than he had himself, the appellants are entitled to your Lordships' judgment, and that this appeal should be allowed with costs.

LORD LINDLEY.-In the view I take of this case it is unnecessary to determine whether Huggins was guilty of larceny in stealing the cheque, or whether he only obtained it by false pretences, which is the crime of which he was convicted. Whether the cheque was void or only voidable as contended by Mr. Lawrence appears to me really immaterial. Be it void or be it voidable, it was not negotiable, and by Section 81 of the Bills of Exchange Act, 1882, Huggins had not and was not capable of giving a better title to the cheque than he had himself. But it is said that, although the bank had a defective title to the cheque, they have a good title to the money paid to them as holders of it. My Lords, so to construe the section would destroy more than half its utility; a cheque marked not negotiable would be no safer than any other cheque if once cashed-i.e., unless payment of it was stopped before it was presented. I cannot think this an admissible construction ; it has never yet been judicially adopted, and I advise your Lordships to reject it. Everyone who takes a cheque marked not negotiable takes it at his own risk, and his title to the money got by its means is as defective as his title to the cheque itself. "Fisher v. Roberts" (6 The Times Law Reports, 89 and 90)' is an authority to this effect, and Section 82 seems to me framed on the assumption that this view is correct. The section would not otherwise be wanted. Upon the other point, it is plain to me that the bank obtained payment of the cheque for themselves, and not for Huggins. Whether the bank is to be regarded as having purchased the cheque, or as having advanced him its amount on the security of it, seems to me immaterial. The bank wanted the money for themselves, and not for him. They were entitled to hold the money as against him, and were under no obligation to remit it to him. In no ordinary sense of the expression can the bank be regarded as collecting the money for him, although, no doubt, if the bank could keep the money all liability on his part

[ocr errors]

would be at an end, and in that way he would be benefited by their receipt of the money. Section 82 of the Act is a mere reproduction of the previous Act of 1876, and the construction put upon that Act in the case of "Mathieson v. London and County Bank" (5 C.P., 67) was, in my opinion, correct. In Clarke v. London "and County Banking Company" (1897, 1 Q.B., 552), the cheque was paid in for collection, and this was the ratio decidendi. Further, my Lords, I cannot think that Huggins was in any sense a customer of the bank; no doubt he was known at the bank as a person accustomed to come and get cheques cashed, but he had no account of any sort with the bank. Nothing was put to his debit or credit in any book or paper kept by the bank. The entry in the waste book, page 20, is only a memorandum of the transac tion. Lord Justice Romer thought he was a customer because the bank had for years collected money for him; but, in my view, the bank collected money for themselves, not for him, in this particular transaction, and the evidence only shows that previous transactions were similar to this. The case suggested by Lord Justice Romer of a customer paying in a non-negotiable cheque to his own credit when his account is overdrawn appears to me very different from that which is before your Lordships for decision. My Lords, the reasoning of Lord Justice Vaughan Williams commends itself to my mind, and, although out of deference to his colleagues he accepted a view which he would not otherwise have entertained, I am clearly of opinion that the judgments appealed from should be reversed, and that judgment should be entered for the plaintiffs with costs, and that they should have the costs of this appeal.

The appeal was accordingly allowed.

QUESTIONS ON POINTS OF PRACTICAL INTEREST.

THE Council desire to express their readiness to receive at all times questions which are of general interest, and in regard to which it would appear desirable to assimilate the practice of bankers.

The following questions have been received, and answers are appended, which, after careful deliberation, the Council have approved :

Cashing Cheque for Stranger-Liability.

QUESTION 1669.-A cheque is made payable to A (who is unknown to the collecting bank) and endorsed by him. He wishes to cash the cheque, and gets a customer of the collecting bank to place his signature on the back of the cheque.

In the event of the cheque being dishonoured, who is responsible for the amount?

ANSWER: The customer.

Two Accounts-Working and Loan-Lien.

QUESTION 1670.-A has a loan of £100 at the London Bank on No. 1 account. He has on No. 2 working account a credit balance of £80. Repayment of the loan is called for, and meantime a cheque for £80 is presented on No. 2 account and returned unpaid.

(a) Was the London Bank justified in returning the cheque?

(b) Has the bank a lien on any credit balance or balances standing in the same name (other than trust accounts) as against a loan or discounts?

ANSWER: (a) Yes, presuming the loan to have been called in in accordance with its conditions.

(b) Yes, against a loan if called in after due notice or against dishonoured bills discounted.

Cheques-Endorsement.

QUESTION 1671.-A cheque payable to M. Benet bears above the endorsement "o/ Crédit Lyonnais." Is the full endorsement of the Crédit Lyonnais required by the paying banker, and why?

ANSWER: The above expression is understood to mean "to the order of the Crédit Lyonnais," who must, therefore, endorse the cheque.

Receipt for Deposit Interest-Stamp-Practice.

In a

QUESTION 1672.-A sum of money is placed as a deposit in a bank and a receipt for the same given to the customer. year's time the customer calls for the interest.

The amount due is marked as paid on the back of the deposit receipt and paid to the customer, the original receipt being returned to him. Should the bank take a stamped cheque which would act as a receipt for the interest from the customer, or is an unstamped acknowledgment all that is necessary (i.e., the customer merely signing a debit ticket)?

ANSWER: The usual plan is for the customer to sign a stamped cheque or receipt for the amount.

Will Pay "if in order "-Practice.

QUESTION 1673.-The Bristol Bank, at the request of their cus tomer, telegraphs to the Newcastle Bank, "May we pay John Smith's cheque on yourselves £50," to which the reply sent is, "Yes, if in order." The Bristol Bank sends the cheque through the London Clearing House, and, when presented, it is returned with the answer Drawer failed."

If the Bristol Bank had sent the cheque the same day direct to the Newcastle Bank it would have been paid.

(a) Is the Newcastle Bank liable to the Bristol Bank for the amount? Is the Bristol Bank liable to its customer for the amount? (b) What is meant by the term if in order?" Does it refer to the account as well as the cheque?

ANSWER: (a) The Newcastle Bank must pay the cheque, as there was no irregularity in sending the cheque through the London Clearing. (b) "Yes, if in order," refers to the form and regu larity of the cheque.

« ՆախորդըՇարունակել »