Secondly, that whenever any such cheque shall have been
issued uncrossed, or shall be issued with the words "and com-
pany," or any abbreviation thereof, and without the name of
any banker, any lawful holder of such cheque, while the same
remains so uncrossed, or crossed with the words "and com-
pany," or any abbreviation thereof, without the name of any
banker, may cross the same with the name of a banker; and
wherever any such cheque shall be uncrossed, any such lawful
holder may cross the same with the words "and company," or
any abbreviation thereof, with or without the name of a banker,
and any such crossing shall be deemed a material part of the
cheque, and shall not be obliterated, or added to, or altered by
any person after the making thereof; and the banker upon
whom such cheque shall be drawn, shall not pay such cheque
to any
other than the banker with whose name such cheque
shall be so crossed. Thirdly, if any person shall obliterate, add to,
or alter any such crossing with intent to defraud, or offer, utter,
dispose of, or put off with intent to defraud, any cheque on a
banker whereon such fraudulent obliteration, addition, or altera-
tion has been made, knowing it to have been so made, such
person shall be guilty of felony, and, being convicted thereof,
shall be liable, at the discretion of the Court, to be transported
beyond the sea for life, or to such other punishment as is
enacted and provided for those guilty of forgery of bills of
exchange; and Lastly, that any banker paying a cheque which
does not at the time when it is presented for payment plainly
appear to be or to have been crossed as aforesaid, or to have
been obliterated, added to, or altered as aforesaid, shall not be
in any way responsible, or incur any liability, nor shall such
payment be questioned by reason of such cheque having been
so crossed as aforesaid, or having been so obliterated, added to,
or altered, and of his having paid the same to a person other
than a banker, or other than the banker with whose name such
cheque shall have been so crossed, unless such banker shall
have acted malâ fide, or been guilty of negligence in so paying
such cheque.

A cheque may be transferred at any time, and, being payable Time when it may be transon demand, it is never overdue, and, therefore, a party taking a ferred. cheque after any fixed time from its date does not do so at his peril. On this as on other points cheques differ from bills of

Acceptance.

exchange (a). Yet a cheque being intended to be presented for
payment without delay, the holder must present it not later
than within banking hours of the day after he received it.
Where the holder pays the cheque into his banker's, he must
do so on the same day he has received it, in order to allow the
banker till the next day to present it for payment. Nor would
it make any difference were the cheque to pass through the
clearing house. The practice is, that each banker sends to the
clearing house the cheques upon other bankers which he receives
in the course of the day; they are delivered to a clerk of the
firm on which they are drawn, each house having a clerk in
attendance there for the purpose, and he enters them in a book
to the credit of the banker paying them in. When the clock of
the clearing house strikes four, no more cheques are taken, and
at the end of the day the clerks settle their balances. If a
cheque comes too late for the clearing house, it is usually sent
to the bankers on whom it is drawn, and they mark it with
their initials, which is considered as an undertaking to pay it the
next day, it not being usual for bankers to pay each other after
four (b). Where a banker receives a cheque upon another banker
he is bound to pay it at the clearing house the same day, if
there be time, but he also has till the next day to present
the cheque. If the place of presentment be at a distance, the
holder should send the cheque by post not later than the day
after he received it, and then his agent has the following day to
present it for payment (c). And this rule applies not only as
between the parties to the cheque, but as between banker and
customer, unless circumstances exist from which a contract or
duty on the part of the banker to present earlier, or to defer
presentment to a later period, can be inferred (d). Cheques
drawn by the Treasury on the Bank of England must not be
presented after three o'clock. Whatever be the effect of a delay
on the presentment as against the immediate transferror, the
drawer's liability is not discharged, unless actual damage has
arisen from the delay (e).

A cheque is never accepted, though the marking of a cheque

(a) Rothschild v. Corney, 9 B. & C.
388.

(b) Robson v. Bennett, 2 Taunt. 388.
(c) Rickford v. Ridge, 2 Camp. 537.

(d) Hare v. Henty, 30 L. J. C. P. 302.

(e) Robinson v. Hawksford, 9 Q. B. 52; Laws v. Rand, 27 L. J. C. P. 76.

has a similar effect as the accepting a bill, provided the banker writes on it the word " accepted," or his initials.

Where the cheque is payable to bearer, the banker may pay the amount of the cheque to the lawful holder, whether by indorsement or otherwise, and in order to facilitate the payment of cheques it is enacted," that any draft or order drawn upon a banker for the sum of money payable to order on demand, which shall, when presented for payment, purport to be indorsed by the person to whom the same shall be drawn payable, shall be a sufficient authority to such banker to pay the amount of such draft or order to the bearer thereof; and it shall not be incumbent on such banker to prove that such indorsement, or any subsequent indorsement, was made by or under the sanction or authority of the person to whom the said draft or order was or is made payable, either by the drawer or any indorser thereof" (a). If, however, the customer had no funds in the hands of his bankers at the time of presentment, the bankers should ascertain the genuineness of the signature both of the drawer and indorser before paying the cheque. If the customer pay into his bank a cheque, the mere fact of the banker receiving it without observation, and keeping it till the following day, does not imply a promise to pay it, and he is held to have received it as agent of the bearer (b).

To whom pay

ment should

be made.

paying altered

cheques.

In the payment of cheques it is expected of the banker to Negligence in use due prudence and caution. If he be guilty of gross negligence in paying a forged cheque, or a cheque with the sum altered, he would do it at his peril, and he could not charge the customer with it (c). If, however, the customer was himself guilty of gross neglect, the banker would be exonerated (d). Cheques are within the meaning of the words "bills of exchange," and therefore the Bills of Exchange Act applies also to them (e). The cheque, when paid, should be restored by the banker to his customer who has drawn it, the cheque being considered the property of the drawer when paid (f). It is the duty of the banker to cancel the cheque on payment thereof (g).

(a) 16 & 17 Vict. c. 59, s. 19.

(b) Boyd v. Emmerson, 2 A. & E. 184; Kilsby v. Williams, 5 B. & A. 816; De Bernales v. Fuller, 14 East, 590.

(c) Hall v. Fuller, 5 B. & C. 750. (d) Young v. Grote, 4 Bing. 253.

(e) Eyre v. Waller, 29 L. J. Exch. 246; 18 & 19 Vict. c. 67.

(f) Warwick v. Rogers, 5 M. & G. 348; Partridge v. Coates, Ry. & M.

156.

(g) 55 Geo. 3, c. 184, s. 19; Morley v. Culverwell, 7 M. & W. 174.

CHAPTER XIII.

INTRODUC

TORY.

ON BANKING.

ALTHOUGH the commerce of banking is of very ancient origin, having been introduced into this country by the Lombards, whatever legislation exists on the subject, it sprung almost entirely from the monopoly granted to the Governor and Company of the Bank of England (a). At first the monopoly of this company was absolute, a statute having been passed enacting that no other bank, or any corporation, society, fellowship, or institution in the nature of a bank, should be established by Act of parliament within the kingdom (b). A few years after, another Act was passed forbidding any other body politic or partnerships of more than six persons in England to borrow, owe, or take up any money on their bills or notes payable on demand, or at any less time than six months from the borrowing thereof (c), and in 1742 it was provided that no other bank should be established by Parliament (d). This close monopoly continued as late as 1826. In that year, however, it was limited to London and within a district of sixty-five miles round it, the Bank of England being then allowed to establish branches in any part of England (e). In 1833, banking companies in the country were allowed to draw bills on London payable on demand. And banking companies, exceeding six persons, were allowed to be formed in London and within a district of sixty-five miles thereof; but they were precluded from issuing notes payable on demand, and Bank of England notes were made a legal tender any where but at the Bank of

(a) 5 & 6 Will. & M. c. 20.
(b) 8 & 9 Will. & M. c. 20.

(c) 7 Anne, c. 7, s. 61.

(d) 15 Geo. 2, c. 13, s. 5.

(e) 7 Geo. 4, c. 46.

England or its branches. Thus the law continued till 1844, when the existing law regarding the issue was established (a).

SECTION I.

NATURE OF BANKING.

The name of Definition.

A banker is one who deals in and with money. banker is made by statute to apply to all corporations, societies, partnerships, and persons, and every individual person carrying on the business of banking, whether by the issue of bank notes or otherwise, except the Governor and Company of the Bank of England (b).

banking.

The business of banking consists in receiving deposits of Business of money upon which interest may or may not be allowed, in making advances of money principally in the way of discounting bills, and in effecting the transmission of money from one place to another.

Banks are divided into public and private. A public or a Public and joint-stock bank is one composed of a large number of partners private banks. or shareholders and administered by a certain number of them

as directors elected from their own body. A private bank is

one having few partners, who attend personally to its manage

ment (c). To carry on the business of a banker, with power to License. issue unstamped promissory notes or bills of exchange, a licence is required, with a stamp duty of £30, a separate licence being required in respect of every town or place where any such unstamped promissory notes or bills of exchange are to be issued. or drawn; but where any banker issues such notes or bills at more than four different towns or places, then, after taking out three distinct licences for three of such towns or places, he is entitled to have all the rest of such towns and places included in a fourth licence (d). Bankers authorised to issue Composition duty for or draw unstamped promissory notes and bills in England, unstamped and unstamped notes in Ireland, must, in lieu of the duties on such notes and bills, pay 3s. 6d. duty for every £100, and

(a) 7 & 8 Vict. c. 32.

(b) Ibid. s. 11.

(c) Gilbart on Banking, p. 2.

(d) 9 Geo. 4, c. 22, s. 2.

notes.