— Part
III.
Business of Banking.
609 Sect.
If the cheque had reached the defective title to the cheque (y)payee actually or constructively, the customer is discharged both on the cheque and consideration (s).
to Bankers
Sub-Sect. 2.— Order Cheques.
paying Cheques.
1237. A banker who in good faith and in the ordinary course of business pays a cheque payable to order (t) drawn on him, to which the person in possession has no title, by reason of the indorsement being forged, is protected from liability, and can debit his customer with the amount so paid {a). A thing is done in good faith if it is done honestly, whether it is done negligently or not (6). Apart from the crossed cheques sections, payment contrary to the crossing would not be in the ordinary course of business (c). Omission to ascertain that the ostensible indorsement was in proper form, e.g., where one indorsement is "Placed to account of payee," w^ould be a departure from the ordinary course of business. Payment over the counter of a cheque for a large amount to a suspicious-looking person might be such a departure (d). To send notes by post in response to a request by letter inclosing an order cheque ostensibly indorsed by the payee would probably be held not in the ordinary course of business (e) but absence of the collecting banker's stamp would not seem to prevent payment being in the ordinary course of business (/). Payment need not be in actual cash to the person presenting (g).
7.
Protection
q^^~^ cheques,
Forged indorsement,
Ordinary
^uSes?
1238.
It
would appear that the cheque need not necessarily Cheque not (/i). But whether payment of a cheque drawn by
be drawn by a customer
1 1_1 1_ customer. Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 59. "Holder" includes •'bearer" {ibid., s. 2). "Bearer" is the person in possession, without reference (r)
Bills of
to title {ibid.).
Charles v. Blachwell (1877), 2 C. P. D. 151, at p. 158. definition of order cheque, see p. 569, ante. {a) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 60. (s)
{t)
For
This section does not apply to drafts between branch and head banks, for which see p. Ql% 'post, or to documents payment of which is made conditional on the signature of an annexed receipt, or presentation within a limited time, for which see p. 613, post [Capital and Counties Bank v. Gordon, [1903] A. C. 240). (6) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 90. (c) Smith V. Union Bank of London (1875), 1 Q, B. D. 31, at p. 35. (d) Compare jBcmA; of Enfjlandx. Vagliano, [1891] A. C. 107, per Lord Halsbcry, But the banker must payor dishonour at once, and refusal, if it proves at p. 117. unfounded, will subject him to liability to his customer. (e) " Where authorised by agreement or usage a presentment through the post office is sufficient" (Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 45 (8)) but the practice of most bankers is to return such cheques unless they come from another banker and it may be assumed that presentment by post by a private person is not authorised by usage. The banker might possibly consider himself agent for presentment (see ante, p. 590), and hold the cheque for a day, during which he could communicate with his customer for instructions. (/) See Questions on Banking Practice, 5th ed., No. 410. " Payment " within the meaning of the Act is broadly interpreted (see (g) cheque Glasscock v. Balls (1889), 24 Q. B. D. 13, per Lord Esher, at p. 16). drawn on one branch of a bank, paid in at another, and appearing as an item in balancing accounts between the branches, has been held to be paid [Bissell cfc Co. Capital and Counties Bank v. Gordon, V. Fox Brothers & Co. (1885), 53 L. T. 193 [1903] A. C. 240). (h) See Capital and Counties Bank v. Gordon, supra, where protection was accorded to bankers' drafts (see p. 612, p>ost) under the Stamp Act, 1853
A
H.L-
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I.
RR
