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considered that the banker or the customer should bear the loss. On referring to the case itself, it will be found that the Court of Common Pleas agreed with the arbitrator, and held that the loss must fall upon the customer, as he had been guilty of negligence in drawing a blank cheque, and in employing a dishonest clerk, whilst no fault could be imputed to the bankers. The same principle was acted upon in the case of Rex v. Wright (1 Lewin's Crown Cases, 135). There the question was, whether if a man be in the habit of signing blank cheques, and one of them be fraudulently filled up by another party, and the banker pays it, is the banker liable to refund to the party whose cheque it purports to be? and Mr. Justice Bayley was clearly of opinion that he would not be liable.
The decision in the case of Simmons v. Taylor, 4 C. B. 463, that a banker was not responsible for paying a crossed cheque to the holder who was not a banker, where the crossing had been erased, and which excited much comment at the time, may also be supported on the principle that the person who crossed the cheque must have done so in a negligent manner.
2. On having effects at the bankers to meet cheques.
The drawer of a cheque should take care that there are sufficient effects at his bankers to pay the cheque, otherwise he will be liable to an action upon the cheque, without any notice of the refusal on the part of the bankers.
In an action against the makers of a promissory note, "payable at Were, Bruce and Co.'s," being presented there for payment when due, the answer was, "not sufficient effects." The only. point made for the defendants was, that they were entitled to notice of its dishonour. The place where it was made payable being, according to recent decisions, a material part of the instrument, it exactly resembled a bill of exchange, the bankers standing in the place of the drawers. Had it been a bill of exchange, the defendants were clearly entitled to notice, for they had some effects in the hands of Were, Bruce and Co., and there was the same reason for their receiving notice, although the form of the instrument was different. They might suppose that the bankers would pay the note; and they ought, as early as possible, to have had the information that it would be necessary for them to provide for it themselves, and that their balance at the banking-house remained unappropriated. The necessity of notice to the maker of a promissory note of its dishonour, results from the determination that his liability does not attach till payment has been demanded at the place where it is expressed to be payable. But Lord Ellenborough clearly held that notice was unnecessary, and the plaintiff had a verdict. Pearse v. Pemberthy (3 Campbell, 261). See also Deverell v. Whitmarsh (5 Jurist, 963). Kemble v. Mills, 1 M. and G., 757. Carter v. Flower, 16 L. J. Ex., 199.
The civil and criminal consequences of drawing
a cheque payable at a bankers with whom the drawer keeps no account, and which he knows will not be paid, will be discussed in a subsequent part of this work.
3. On stopping payment of a cheque when it has been given upon a condition which has not been performed.
In an action on a banker's cheque drawn by the defendants for the sum of £532, it appeared that a house in Westphalia having received a sum of money on account of the plaintiff, directed the defendants who were their correspondents in London, to pay it to him, but said they could not allow him interest upon it, as they had none themselves. This being communicated to the plaintiff, he at first insisted on interest, but finally agreed, on having a cheque for the principal, to give a receipt in full. He accordingly wrote such a receipt, and received the cheque in question in exchange. Having got it into his hands, he said he should prosecute the house abroad for interest, before the Chamber of Commerce at Paris. The defendant thereupon ordered payment of the cheque to be stopped.
Lord Ellenborough:-"If I give a draft upon a condition, and I find the condition is to be eluded, I may stop the payment. This was a conditional delivery of the draft. When it was delivered, all still remained in fieri. The defendants, on dis
covering the plaintiff's intentions, were fully justified in resisting the demand. The draft in his hands had become a picce of waste paper. holt v. Spitta and others (3 Campbell, 376).
Trover for goods, bills of exchange, &c. Plea, general issue.-Plaintiffs were the assignees of W. Barthrop the elder, and W. Barthrop the younger, wool-merchants. wool-merchants. On the 15th of June, 1821, the bankrupts were indebted to Ellison, Moore and Co., bankers in Lincoln, in the sum of £1,300, who refused to give them any further credit until that balance was liquidated. In order to effect this, application was made to the defendant who agreed to advance £200 for that purpose, and accordingly drew a cheque upon his banker for that sum, and delivered it to W. Barthrop the son, on the 18th of June. On the 20th of June, W. Barthrop, the father, committed an act of bankruptcy, and on the evening of the same day received a letter from his son containing the cheque in question, together with several bills of exchange which the son had collected in payment of outstanding debts. W. Barthrop, the father, did not open this letter, but carried it back the same night to his son's house at Bradford; and, on the following day, the cheque, all the bills, and goods to a considerable amount were delivered over to the defendant in payment of a debt due to him. A short time afterwards W. Barthrop, the younger, committed an act of bankruptcy, and a joint commission was issued against him and his father, under
which the plaintiff was chosen sole assignee. Under these circumstances, the learned judge thought that the plaintiff was not entitled to recover the amount of the cheque, and the jury accordingly found a verdict for the plaintiff for £1,016, being the value of the remainder of the property delivered over to the defendant. And afterwards
Vaughan, Serjeant, moved to add £200 to the damages found, and contended that the defendant intended to give the bankrupts a general control over the cheque: the restoration of it to the drawer was therefore a fraudulent preference, and entitled the plaintiff to recover the amount in this action.
But the Court said-"This was a draft upon the defendant's banker, and not money; and the evidence shows that it was given for the specific purpose of being paid into the bank of Ellison, Moore and Co., in reduction of the balance due to them from the bankrupts. Now, if a cheque be placed for a specific purpose in the hands of a person who gives no value for it, and that person becomes bankrupt before he has used the cheque, if the drawer gives his banker orders not to pay the money, the assignees of the bankrupts cannot maintain an action to recover it. The bankrupt certainly could not do so, and his assignees must, in this respect, stand in the same situation. The direction of the learned judge was therefore right, and the damages ought not to be increased. Moore v. Barthrop (2 Dowling and Ryland, 25).