1061

Paying.] A letter of credit saying, "Please to honour the drafts of A. to the amount of 4601., and charge the same to the account of B.," is an authority to make the payment, but the possession of it by the person to whom it is addressed does not prove that the payment has been made. Orr v. Union Bank of Scotland, 1 Macq. H. L. 513; 2 C. L. R. 1566.

To show that the payment has been made there must be a draft by A. 1b.

The person presenting a letter of credit is not necessarily the person who is entitled to make

the draft. Ib.

Therefore, a banker, to whom a letter of credit is addressed, ought to see that the signature to the draft is genuine. If he does not, the loss will be his own. Ib. See 16 & 17 Vict. c. 59,

On payment of a sum of money by B. into a bank, a letter of credit for the amount was given by the bank in favour of A. It was presented to the bank's agent with the name A. K., a forgery, indorsed on it :-Held, that payment upon this forgery did not discharge the bank. British Linen Co. v. Caledonian Insurance Co., 4 Macq. H. L. 107; 7 Jur. (N.S.) 587; 4 L. T. 162; 9 W. R. 581-H. L.

A banking company addressed to a firm of

merchants a letter of credit in these terms :

"No. 394. You are hereby authorised to draw upon this bank, at six months' sight, to the extent of 15,000l., and such drafts I undertake duly to honour on presentation. This credit will remain in force for twelve months from this date, and parties negotiating bills under it are requested to indorse particulars on the back hereof. The bills must specify that they are drawn under credit No. 394 of the 31st of October, 1865." The merchants drew bills under the letter to the amount of 6,000l., and sold them to third persons, who duly indorsed particulars. The bank, on payment of the bills being demanded, set up a cross claim against the merchants for 7,000l. :-Held, that the purchasers of the bills had a free right in equity to recover the amount free from the cross claim. Agra and Masterman's Bank, In re, Asiatic Banking Corporation, Ex parte, 36 L. J., Ch. 222; L. R. 2 Ch. 391; 16 L. T. 162; 15 W. R. 414.

Not specific Appropriation.]—A letter by bankers, stating that a special credit for a certain sum has been opened by them at the instructions of their customer, in favour of any particular person who supplies goods on the faith of it, does not constitute a specific appropriation or an equitable assignment of that sum in their hands, for which they are liable to be sued in a court of equity as if they were trustees for the person in whose favour the credit had

L. had contracted to supply the French Government with a certain number of cartridges by a given time, and in consequence of his request for some guarantee for the payment of the price, the bankers in London of the government wrote by direction of the agent of the government a letter advising L. that by such direction them in his favour, and that it would be paid a special credit for 40,000l. had been opened with ratably as the goods were delivered, upon receipt of certificates of reception issued by the agent of the French Government :-Held, that this letter did not constitute an assignment in equity, or a specific appropriation, so as to impress a trust upon the moneys in the bankers Whatever responsibility they incurred under hands, for which they could be sued in equity. that letter could be enforced at law. 1b.

A

Authority to draw Bills of Exchange-Nonobservance of Conditions--Refusal to Acceptletter of credit contained a promise by the deWarranty of Drawer's Representations.] their correspondents" against produce bought and fendants to accept bills drawn upon them by paid for." The plaintiffs had knowledge of this condition, and advanced money upon bills purporting to be drawn under the credit at a time when no produce had been bought or bought and paid for. The defendants refused to accept these bills. In an action for not accepting :-Held, that the defendants were entitled to refuse to accept, as they only agreed to do so on the terms of the letter; and that if the plaintiffs advanced money on the faith of their correspondents' filled, there was no guarantee on the part of the representations that the conditions had been fuldefendants of the truth of such statements. The defendants counter-claimed against the plaintiffs for the amount of other bills accepted and paid

which had been drawn under the same letter of

credit :-Held, that the defendants were not entitled to recover, as the presentation of the bills for acceptance was rot a warranty by the plaintiffs that the bills had in fact been drawn against produce bought or bought and paid for. Chartered Bank of India, Australia, and China v. Macfayden, 64 L. J., Q. B. 367; 15 R. 333; 72 L. T. 428; 43 W. R. 397.

When a bank has issued a letter of credit, on the terms that the bills which they agree to accept are to be covered by bills of lading to a like amount, suspension of payment by the bank before there has been time for the letter of credit to be used, is not a breach or a repudiation of contract; inasmuch as permission might have been given to the liquidators under the windingup to negotiate the bills; and a claim by the holder of the letter of credit, for damages for the alleged breach, was disallowed. Agra Bank, In re, Tondeur, Ex parte, 37 L. J., Ch. 121; L. R. 5 Eq. 160; 16 W. R. 270.

Circular Notes.]-A banker cannot be called upon to return the amount paid for a circular note so long as such note is outstanding and there remains a possibility of his being called upon to pay a correspondent who may cash the same. Conflans Stone Quarry Co. v. Parker, 37 L. J., C. P. 51 ; L. R. 3 C. P. 1; 17 L. T. 283; 16 W. R. 127.

Where, therefore, the plaintiffs, who had

mandamus, which is one in subsidium justitiæ ought not to be granted. Ib.

Rules. The certificate of the barrister appointed under the provisions of 9 Geo. 4, c. 92, that the rules of a savings bank are in conformity with the act, is not conclusive. Haynes, Ex parte, Clarke, In re, 3 Mont. D. & D. 663; 13 L. J., Bk. 12; 8 Jur. 791.

What is a sufficient compliance with 9 Geo. 4, c. 92, s. 6, providing that no savings bank shall have the benefit of the act, unless its rules provide that no person, being treasurer, trustee, or manager of such institution, or having any control in the management thereof, shall derive any benefit from the deposits in the bank except as in the act mentioned. Ib.

Before the passing of 9 Geo. 4, c. 92, the surplus money in savings banks, after payment of expenses and interests on deposits, was divisible among the depositors. By s. 22 of that act, it was provided that within six weeks of the 20th November, 1828, the trustees should ascertain the amount of the increased fund to that date, and, after retaining enough for future management, should appropriate the surplus in the manner provided by their rules and regulations made before the passing of the act; or, in the event of no such provision being made, in such manner as the trustees, at a general meeting to be convened according to their rules, should think proper. The rules of the Arundel Savings Bank provided that no trustee, or any person having any control in the management of the institution, except the actuary, should derive any benefit from any deposit made therein :-Held, that an appropriation of part of such surplus to repairs of a bridge, to which the trustees were liable to be rated, was, by the joint effect of the rules and s. 22 of the act, illegal. Whether, in the absence of any restriction by the rules, such an appropriation would, in the case of any savings bank established before the 9 Geo. 4, c. 92, be proper, quære. Holmes v. Henty, 10 Bli. (N.S.) 255; 4 Cl. & F. 99.

Deposits.]-A testator, under s. 23 of the Savings Bank Act, 9 Geo. 4, c. 92, made deposits in the names of himself and his sisters, but he did not communicate to them the fact of such deposits being made:-Held, that a trust was not thereby created for the benefit of the sisters, the testator's object being, in the opinion of the court, merely to evade the provisions of the act. Field v. Lonsdale, 13 Beav. 78; 19 L. J., Ch. 560; 14 Jur. 995.

A depositor in a savings bank cannot maintain a suit in a court of equity against the trustees; the 9 Geo. 4, c. 92, s. 45, having established arbitration as the only mode of proceeding in disputes between depositors and the institution. Cooke v. Courtown (Lord), 6 Ir. Eq. R. 266.

A suit at law and not in equity would, but for the statute, be the proper remedy. Ib.

Debt Due from Treasurer.]-Under the act 3 Will. 4, c. 14, s. 28, the court will, on petition, order payment of a debt due to a savings bank, from the treasurer of such savings bank, out of the first moneys to be received, before any report made, in a suit for the administration of the estate of such treasurer; but the court will not make an order for the payment of the costs of the petition. Hatch v. Lee, 10 L. J., Ch. 223.

VOL. I.

Winding-up.]-A company, called a savings bank, was formed with limited liability and registered under the act, 1856, the objects being to receive deposits. grant loans on security, and to conduct emigration agencies, with a capital divided into shares of 11. each. An order to wind up was made in bankruptcy, and afterwards a petition to wind up in chancery was presented, on the ground that the company was not a banking company, and therefore that there was no jurisdiction to wind up in bankruptcy; and it being proved that the company was not registered under either of the Banking Acts, 1857 and 1858; that money could not be withdrawn except upon a stated period of notice; that cheques could not be drawn in the ordinary form; and that the company itself kept an account with a banking-house-Held, before the passing of the 25 & 26 Vict. c. 89, that the company was not a banking company, and that being a company of limited liability registered under the act of 1856, it must be wound up as directed by that statute in the Court of Bankruptcy. Coe, Ex parte, District Savings Bank, In re, 3 De G. F. & J. 335; 31 L. J., Bk. 8; 5 L.. T. 566; 10 W. R. 138.

Liability of Trustee and Manager-Non-compliance with Rules-Omission to attend Meetings.]-B., one of a numerous body of trustees and managers of a savings bank, had not for some years previous to the winding-up of the bank attended any meetings of the trustees and managers, or taken any part in the management of the business of the bank. The business had been managed by certain others of the trustees and managers, and owing to their neglect to comply with the rules of the bank losses had occurred. B. had no knowledge or notice of any irregularities in the conduct of the business, but had received reports which were such as to lead to the conclusion that it was being conducted in conformity with the rules -Held, that B. was not liable for neglect or omission in complying with the rules and regulations of the bank within the meaning of s. 11, sub-s. 2, of the Trustees Savings Bank Act, 1863. Cardiff Savings Bank, In re, Bute's (Marquis) Case, 61 L. J., Ch. 357; [1892] 2 Ch. 100; 66 L. T. 317; 40 W. R. 538.

Neglect of Trustee and Manager-Windingup-Contributory-Misfeasance.]—D., a trustee and manager of a savings bank regulated by the Savings Bank Act, 1863, omitted to comply with the requirements of the act as to the maintenance of checks in transactions of deposit and repayment, and as to the examination of accounts, and entrusted the business of the bank to the actuary, who committed frauds which resulted in the winding-up of the bank :—Held, that he was liable under s. 165 of the Companies Act, 1862, to make compensation to the bank on the ground of misfeasance, but that he was not liable under s. 200 as a contributory. Cardiff Savings Bank, In re, Davies's Case, 59 L. J., Ch. 450; 45 Ch. D. 537; 62 L. T. 628; 38 W. R. 571; 2 Meg. 136.

Officer of Bank-Right of Preference-Bankruptcy Act-Administration of Estate in Chancery Division.]-The provision of s. 14 of the Savings Bank Act, 1863, by which a savings bank is enabled to obtain payment of a debt due to it from an officer of the bank in preference 35