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The Gazette of the Incorporated Law Society of Ireland.
[JANUARY, 1919
Banking Law.
Two important and generally interesting
cases in Banking Law are reported in the
current number of the House of Lords
Reports.
In the
London Joint Stock Bank, Ltd.
v.
Macmillan,
1918, A.C. 777, the facts were
simple. A firm who were customers of the
Bank entrusted to a confidential clerk the
duty of filling up their cheques for signature.
The Clerk filled up a cheque for petty
expenses of the office payable to bearer ;
the
space in which the amount of the cheque is
usually written in words was left completely
blank, and in the space allotted for the
figures the number " 2 " was writted at such
a distance from the symbol " £ " that it WF.S
possible to insert figures both before and after
the figure "2." A member of the firm signed
the cheque in that condition, and the clerk
having written in the words One Hundred
and Twenty Pounds and altered the figures
to £120, cashed the cheque for that amount.
It was admitted that when the cheque was
presented for payment there was nothing on
the face of the cheque or otherwise to induce
any suspicion that the cheque had been
tampered with. The Bank brought an action
claiming a declaration that they were
entitled to debit the firm with the full amount
of the cheque, and judgment was given for
the defendants on the ground that they had
not been negligent in signing the cheque, and
if there was negligence it was not the
proximate cause of the loss. The Court of
Appeal in England unanimously affirmed the
judgment. On Appeal to the House of
Lords, the judgment was reversed, and the
old case of
Young
v.
Grote
(1827), 4 Ring. 253,
on the same point was approved.
The principle established by the decision
is that a customer of a bank in drawing a
cheque must take reasonable and ordinary
precautions against forgery. The judgments
contain a valuable exposition of the law in
the relations of banker and customer.
Another case of interest in Banking Law is
Banbitry
v.
Bank of Montreal,
reported 1918,
A.C. 626. The judgments of the Lords deal
exhaustively with the question of the liability
of a bank for advice given to customers
regarding investments. The case is further
important in that it establishes what many
may possibly regard as of far-reaching effect
in Nisi Prius practice, viz. :—That notwith
standing the omission of the Defendant in an
action to ask for a direction on the ground
that there was no evidence upon which the
jury could reasonably find for the plaintiff,
the Court of Appeal, on a motion for a new
trial, is not precluded from considering the
question of no evidence, and in a proper case
maj' order judgment to be entered for the
defendant notwithstanding such omission.
The decision was grounded on the English
Order LVIIL, R. 4.
There is a corres
ponding Irish Rule (see Supreme Court Rules,
1905, Order LVIIL, R. 4, Wylie, p. 784).
Cheque—Stoppage of Payment.
An action recently tried before Mr. Justice
Lawrence deals with an important question
as to the right of a drawer of a cheque to
stop payment. A customer of a bank
having drawn a cheque on his bankers for
£100 gave notice to the branch of the bank
on which the cheque was drawn to stop
payment. The notice was duly received by
the branch before the cheque was presented
for payment. The payee of the cheque
presented the cheque for payment at another
branch of the same bank, and the manager
of that branch paid the cheque, admittedly
in good faith and without any notice of the
stoppage given to the branch on which it had
been drawn. It was decided that the bank
was entitled to recover the amount of the
cheque from the drawer.
(London Provincial
and South Western Bank, Ltd.
v.
Buszard,
reported
Times Law Reports,
Vol. XXXV.,
142.)
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