Bankers and Banking.
592 Sect.
3.
Collection of Cheques. Defective title of
customer.
receipt of entitled to
banker
payment, ifc would appear that the customer is at once draw on them (s). But if the cheque is dishonoured, the
is still
right.
(t).
1212. There is no protection for the banker collecting uncrossed cheques [u) and therefore, if the customer have no title, or a defective title, the banker is liable to the true owner for conversion or for money had and received to the face value of the cheque But where conversion will not lie, as where the collection has been for a customer having a revocable title unrevoked at the time the money was received and handed over, the banker will be protected as an innocent agent who has parted with the money to his principal
before notice
Bank holding in its own
entitled to debit the customer's account
(a).
Where no
question of forged indorsement precludes him, the banker may, in the case of both crossed and uncrossed cheques, escape liability if he can establish an independent title as holder in due course, except where the cheque is crossed " not negotiable" (h). The position of holder for value can be set up by the bank where cash has been given for the cheque over the counter where the cheque is paid in in reduction of an overdraft (c) where the cheque is paid in on express condition of being at once drawn against, and is so drawn against (fZ) where the cheque is subject to a lien(e), or, in the case of an uncrossed cheque, if it is credited as cash at once (/). Where the banker, by any of the above-mentioned methods, becomes holder in due course of a cheque paid in, he has all the rights of such holder, including that of suing the parties to it in his
own name (s)
(g).
and Counties Bank v. Gordon, [1903] A. C. 240, per Lord Lindley, and compare Eyles v, Ellis (1827), 4 Bing. 112. Channell, J., in
Capital
at p. 249
The National Bank (1906), 23 T. L. E. 65, doubts this. As to this by previous agreement, see Akrokerri (Atlantic) Mines, Ltd. V. Economic Bank, [1904] 2 K. B. 465. and it) Capital and Counties Bank v. Gordon, supra, per Lord Lindley at p. 248 see Bavins, junr. and SimsY. London and South Western Bank, [1900] 1 Q. B. 270. (u) For the protection of the banker collecting crossed cheques, see p. 593, post. {x) Fine Art Society v. Union Bank of London (1886), 17 Q. B. D. 705; Great Western Rail Co. v. London and County Banking Co, [1899] 2 Q. B. 172, [1901] A. C. 414 Capital and Counties Bank v. Gordon, supra. As to recovering the face value, see Bavins, junr. and Sims v. London and South Western Bank, supra. Tate v. Wilts, and Dorset Bank (a) Holland v. Russell (1863), 4 B. & S. 14 Bavins, junr. and (1890), Journal of the Institute of Bankers, Vol. XX., p. 376 Sims V. London and South Western Bank, supra. (6) Capital and Counties Bank v. Gordon, supra (bearer cheques, bank protected) Great Western Rail. Co. v. London and County Banking Co, supra (cheques crossed "not negotiable," bank not protected). (c) London and County Bank v. Groome (1881), 8 Q. B. D. 288. {d) National Bank v. Silke, [1891] 1 Q. B. 435, per Bowen, L.J., at p. 439. e) See pp. 620 et seq., post. if) Capital and Counties Bank v. Gordon, supra. But see the doubts expressed
Bevan
v.
right being precluded
as to the result of that case by Bigham, J., in Akrokerri {Atlantic) Mines, Ltd. V. Economic Bank, supra, and by Channell, J., in Bevan v. The National Bank, supra. As to whether this course is available in the case of crossed cheques since the Bills of Exchange (Crossed Cheques) Act, 1906 (6 Edw. 7, c. 17), see p. 597, post. [g)
draft)
London and County Bank v. Groome, supra (paid in in reduction of overEx parte Richdale, Re Palmer (1882), 19 Ch. D. 409; Royal Bank of
Scotland v. Tottenham, [1894] 2 Q. B. 715 (placing at once to credit).
