Negligent dealing with goods

by a bailee.

Payment

for the same, or to indemnify the plaintiffs against the said losses.

7. Except that the defendants have not in fact taken over the said silk, or paid to the plaintiffs anything in respect of the price thereof, or indemnified the plaintiffs against any losses, the defendants deny the allegations contained in paragraph 6 of the statement of claim, and every part thereof respectively.

8. The defendants further say that they have paid the sum into Court. of £21 into Court in respect of the plaintiffs' claim in respect of the cause of action herein admitted, and say that the said sum is enough to satisfy the plaintiffs' claim in respect of the matters in respect of which the same has been paid into Court.

Bankers dishonouring a customer's cheque.

Liability of a banker dishonour

ing customer's cheque.

Branch banks.

Bankers (a).

Action against Bankers for Dishonouring a Customer's Cheque. 1. The plaintiff is a solicitor, carrying on business at No. —, Street, in the City of London; and the defendants are bankers, carrying on business in Lombard Street, in the said City.

-

(a) If a banker refuses to pay a cheque drawn upon him by a trader, who keeps an account with him, and who has sufficient assets in the hands of the banker to meet the cheque at the time it is presented for payment, the trader is entitled to recover substantial damages without proof of actual damage, as the dishonouring of a cheque is likely to be very injurious to the credit of persons in trade. (Rolin v. Steward, 23 L. J. C. P. 148.)

It has been held that the different banks of a banking company are, as regards their separate customers, separate companies, so that a customer who keeps an account with one branch has no right to draw cheques on, and have them cashed by another branch. (Woodland v. Fear, 26 L. J. Q. B. 202.) Therefore where A. received payment for a cheque drawn on branch C. at branch D., and the cashier paying at the latter did not know, as was the fact, that the account of the drawer of the cheque was overdrawn at branch C., it was held that A. must refund the amount of the cheque. (S.C.) But if a banker pays the cheque of a customer erroneously supposing that he had funds, he cannot recover the amount from the person to whom the cheque is paid. (Chambers v. Miller, 32 L. J. C. P. 30.) For some purposes, however, it would seem that branch banks are not regarded as distinct. Thus where a customer had an account with two branches of a bank, it was held that in the absence of any special agreement with their customer, the bank had a right to consider the two accounts as one, and to refuse the customer's cheque, when on

2. In the year 1870 the plaintiff opened a current account Bankers the defendant's bank, upon which he from time to time dishonouroperated by means of cheques drawn on printed forms issued tomer's by the defendants.

3. On the 18th of May, 1877, and throughout all that day, there was standing to the plaintiff's credit in the defendants' hands the sum of £300.

4. On the said 18th of May a cheque for £100, drawn by the plaintiff in favour of Messrs. W. & L., payable to their order, and dated the 17th of May, 1877, was duly presented for payment at the defendants' bank.

5. The defendants' cashier, however, refused to pay the said cheque, and returned the same to the agent of the said Messrs. W. & L., with the words "No assets" written on the face thereof by such cashier.

6. In consequence of the premises the plaintiff has been seriously injured in his credit and reputation as a solicitor and otherwise, and has been subjected to great annoyance, or has endured pain and anguish of mind.

The plaintiff claims: (1.) £1,000 damages.

(2.) Such further and other relief as the nature of the case may require.

adding the two accounts together the balance was against him. (Garnett v. M‘Kewan, L. R. 8 Ex. 10.)

ing a cus

cheque.

right of

party

Where a customer pays into his bankers a sum of money to meet a As to bill, and the bankers undertake to apply the money to the payment of the particular bill, but afterwards fail to do so, and dishonour the bill when presented to them, the customer may, but the holder of the dis- other than honoured bill may not have an action against them. (Moore v. Bushell, customer 27 L. J. Ex. 3.) It has been suggested that in such a case the holder of to sue the bill would have a remedy in equity as a matter of trust. (Story's banker. Equity Jurisprudence, vol. 2, pp. 288 to 291; but see the decision of Malins, V.-C., contra, in Hill v. Royds, L. R. 8 Eq. 290.)

If a banker pays a forged cheque he will generally have to bear the loss himself; and if he pays a cheque which has been fraudulently altered in amount he will have to suffer, unless the drawer has by his gross fault facilitated the commission of the fraud. (Byles on Bills, 12th ed., p. 336.) This is the general rule, but by the 16 & 17 Vict. c. 59, 8. 11, if a draft or order (which includes a cheque) drawn upon a banker for a sum payable to order or demand, when presented for payment, purports to be indorsed by the person to whom the same is drawn payable, that is a sufficient authority to the banker to pay the amount to the bearer, although the signature indorsed be in fact a forgery. But this enactment does not protect any other person than the banker on whom the draft or order is drawn; it does not protect any third banker_who cashes it on the faith of the indorsement. (See Ogden v. Benas, L. R. 9 C. P. 513.)

Payment of forged cheques by bankers.

Bankers dishonour

Action against Bankers for Dishonouring Customer's Cheque, setting out a special undertaking that it should be paid.

1. The plaintiff carries on business as a wine merchant at ing cheque N., and the defendants are a firm of bankers having a bank which they there, and were and had for a long time previous to the date specially undertook mentioned in the next paragraph, been the bankers of the to honour. plaintiff.

2. On or about the 9th day of February, 1876, the plaintiff delivered to the defendants a sum of £120 9s. 8d., on the terms that a sum of £96 out of the same should be specially applied by the defendants to honouring a cheque for that amount which the plaintiff was about to draw in favour of Messrs. M., McK. & Co.; and a clerk of the defendant's accepted the said sum of £120 9s. 8d. on behalf of the defendants on the said terms, and promised on their behalf that the said sum of £96 should be by them held for the purpose of honouring the said cheque, and should be applied thereto, and not otherwise.

3. The said cheque was duly presented to the defendants for payment on or about February 13th, 1876, but the defendants refused to honour the same, and returned it with the indorsement "Not provided for," although they held at the time the money specially provided to meet the said cheque.

4. The defendants and their manager, Mr. T. L. A., were aware of the circumstances under which the said sum of £120 98. 8d. had been paid to them, and the terms upon which it had been received by them at the time they so dishonoured the said cheque as aforesaid, and they had been aware of them for some considerable time previously, but no intimation was given by them to the plaintiff of any intention on their part to dishonour the said cheque, nor did the plaintiff know that they had so dishonoured it till some time after they had done so, at which time the said cheque had been returned to Messrs. M., McK. & Co. by the Nottingham Joint-Stock Bank, through whom it was presented for payment.

5. In consequence of the above-mentioned dishonour of his cheque by the defendants, the plaintiff has suffered great damage, and his credit has been greatly injured thereby. The plaintiff claims £3000.

Statement of Defence.

1. The defendants deny all and every the allegations in the 2nd, 3rd, 4th, and 5th paragraphs of the statement of claim respectively contained.

Bankers

dishonouring a

cheque.

2. The defendants admit that on the 8th day of February, Defence. 1876, the plaintiff paid into the defendants' bank the sum of £76 18. in cash, and that on the same occasion he presented to the defendants at their said bank for discount two bills of exchange, one for £34 138. and the other for £10 5s. The defendants discounted the said two bills of exchange for the plaintiff, and the aggregate amount paid or allowed by the defendants to the plaintiff in respect of the said two bills of exchange on the discounting thereof was the sum of £44 78. 4d.

3. The transaction between the plaintiff and the defendants in regard to the said two sums of £76 1s. and £44 78. 4d. in the 2nd paragraph mentioned was as follows: Each of the said sums was on the said 8th of February, 1876, paid by the plaintiff into the hands of the defendants as the bankers of the plaintiff in the usual way to the general credit of the banking account then kept by the plaintiff with the defendants, and upon which the plaintiff was then indebted to the defendants in a sum of £2573 118., besides a sum of about £130 then due for interest and commission on the plaintiff's said banking account. The plaintiff at the time when he paid in the said sums respectively gave no direction whatever in regard to the application of the said sums, or any part thereof, and the defendants on the said 8th day of February, 1876, placed the said sums of £76 1s. and £44 78. 4d. respectively to the general credit of the plaintiff's said banking account, and appropriated the same in reduction and part payment to the defendants of the said sum then due from the plaintiff to the defendants as aforesaid.

4. The defendants deny that the said hereinbefore mentioned sums of £76 1s. and £44 78. 4d., or any part thereof, were by the plaintiff paid to the defendants, or accepted by the defendants, upon the terms that a sum of £96 out of the same should be specially applied by the defendants to the honouring of a cheque for that amount which the plaintiff was about to draw or did draw, in favour of Messrs. M., McK. & Co.

Bankers dishonouring a cheque. Defence.

Defence of ratification by subsequent conduct.

5. The defendants admit that on the 12th of February, 1876 (and not the 13th of February as in the statement of claim alleged), a cheque of the plaintiff's in favour of Messrs. M., McK. & Co. for £96 was presented to the defendants for payment, and that the defendants refused to honour the same, and returned it with the indorsement "not provided for." The said presentment of the said cheque for payment was the first knowledge the defendants had of the said cheque having been drawn, and at the time of the said presentment of the said cheque the plaintiff's banking account with the defendants was very largely in debt, and the plaintiff was indebted to the defendants thereon in a sum exceeding £2500.

6. After the said 8th of February, 1876, and until the 14th of March, 1876, the plaintiff continued to keep his banking account with the defendants, and on the said 14th of March, 1876, the plaintiff paid to the defendants £2624 58. 4d., being the balance which then remained due from him to the defendants upon the said banking account after crediting the plaintiff with the said sums of £76 1s. and £44 7s. 4d., as in the 3rd paragraph mentioned, and the defendants thereupon, at the request of the plaintiff, gave up certain securities which they held for securing a portion of the plaintiff's said banking account. The defendants say that if any ratification were necessary, the plaintiff thereby ratified, and adopted the mode in which they had dealt with the said sums of £76 1s. and £44 78. 4d., as in the 3rd paragraph mentioned.

And by way of set-off and counter-claim the defendants say: 1. That between the months of April and August, 1876, the defendants advanced and lent to the plaintiff, and the plaintiff borrowed and received from the defendants sums of money amounting, along with the agreed rate of interest, in the whole to the sum of £1705. Full particulars of the same have been delivered to the plaintiff.

2. All things have happened and times elapsed necessary to entitle the defendants to be paid the said sum of £1705, yet the plaintiff has not paid the same.

The defendants claim £1705.