that neither should be presented, but that the defendant's cheque should be returned in a few days. C., having overdrawn his account with his bankers, made a fraudulent agreement with the bank agent, to which the defendant was not privy, that the cheque in question should be paid into the bank, so as in appearance to reduce C.'s balance, but that it should be afterwards returned, and no action brought upon it. Before it was returned, the bankers (the present plaintiffs) took possession of it, and brought this action upon it against the defendant. Held, that a plea of want of consideration for the defendant's giving the cheque to C., and for C.'s transferring it to the plaintiff was disproved by the evidence that the defendant had received the counter cheque from C., and that the amount of the cheque had been allowed to C., in his account with the plaintiff: Bosanquet v. Corser (10 L. J. (N. S.) (Exch.) 275); Meeson and Welsby, 142; 9 Carrington and Payne, 664).

7. Receiver's Accounts.

In an action against the bankers by an agent to recover, as money had and received, or in an action for dishonouring the agent's cheques, while such money remained undrawn by the agent, the bankers cannot plead that the agent was acting on behalf of an undisclosed principal, who had claimed the money of the bankers: Tassell v. Cooper (14 L. T. (C.P.) 466).

But in Chancery, where it was known that the customer was only a receiver, the bankers were held liable for transferring money from the receiver's trust account to his private account. There the plaintiff, being owner of an estate, employed an agent and receiver, who paid into the defendant's bank the rents of the estate, to an account headed with the name of the estate, to distinguish it from his private account. The receiver's private account being overdrawn, he transferred the balance of the estate account to make up the deficiency due upon his private account.

Upon a bill filed by the plaintiff against the bankers, to refund this balance so transferred, it was held that, according to the principles of a Court of Equity, a person who deals with another knowing him to have in his hands, or under his control, money belonging to a third person, must not enter into a transaction with him, the effect of which is that a fraud is committed on the third person; and it appearing upon the evidence that the bankers were aware that the money was the produce of the rents of the plaintiff's estate, a decree was made against the bankers, for repayment of the amount: Bodenham v. Hoskins (21 L. J. (Ch.) 864).

CHAPTER XI.

LETTERS OF CREDIT.

A LETTER OF CREDIT is defined by McCulloch to be" a letter written by one merchant or correspondent to another, requesting him to credit the bearer with a certain sum of money." We do not think this definition strictly correct, at least in reference to letters of credit issued in places subject to the English stamp laws. It seems to us that the letter of credit, to be a legal document, ought to be payable to some particular person, and not to bearer; and that it ought to be sent direct from the banker who grants it to the banker who is to pay it, and the latter must satisfy himself of the identity of the person who applies to receive it. In this view of the matter, a letter of credit is simply a request from one banker to another, to pay a particular person a sum of money. It is not a draft, a bill of exchange, or a promissory note, and therefore it requires no stamp duty. It also

comes within the exemption from stamp duty (No. 3 at page 122). But if it should be drawn in the form of an order to pay the bearer, or to pay a particular person or order, and then delivered to the bearer or the payee, it would constitute a bill of exchange within the meaning of the Stamp Acts, and the Acts relating to banking. This view seems borne out to some extent by the case of the Queen v. Kinnear, for forging a bill of exchange. The bill was in this form :

"Flintshire District Banking Company, "Flint, 29th September, 1837.

Twenty-one days after date pay (without acceptance) to the order of Mr. James Henderson £70 for value received, for the Company.

“J. WATKINS, Manager. "To the London and Westminster Bank, "Throgmorton-street, London."

Indorsed "J. HENDERSON."

It was objected that the direction not to accept, prevented the instrument from operating as a bill of exchange, and therefore that it was wrongly described.

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Patteson, J., said-" This instrument certainly differs from all others that I have seen as bills of exchange, by reason of the words without acceptance.' I do not, however, consider that the insertion of those words alters the character of

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the instrument, so as to prevent its being a bill of exchange. All that is necessary to constitute a bill is, that the party making the instrument should direct it to some other party, requiring that other party to pay the money therein mentioned to some third person or his order, or to the order of the party so making the instrument. The drawer may in each case prescribe the terms upon which the payment is to be made. Here he has chosen to prescribe that the drawee is to make the payment without acceptance;' the meaning of which I take to be, that the holder is not to be put to the trouble of presenting it to the drawee before it becomes due; but still, if he should choose to present it, there is nothing to prevent the drawer from accepting it; actual acceptance, of course, is not necessary to make the instrument a bill of exchange. Bills are daily noted and protested as bills for non-acceptance; they must, therefore, be bills before acceptance. Bills at sight are not, in fact, commonly accepted." The Queen v. Kinnear (2 Moody and Robinson, 117).

It may be remarked, in passing, that the words. "without acceptance" were probably inserted in consequence of the cases of The Bank of England v. Anderson (3 Bingham's New Cases, 589); and The Bank of England v. Booth (6 Bingham's New Cases, 415); in which it was held that banks in London, consisting of more than six persons, could not accept bills of exchange without infringing