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drawn [by A. B.] upon the

Bank, [and

endorsed by you], has been duly presented for payment, but was dishonoured, and is unpaid. I request you to pay me the amount thereof,

"And remain, &c.,

"To Mr.

"Y. Z."

12. Remedies of the holder of a lawful cheque against the banker, and the other parties to the cheque.

The bona fide holder of a dishonoured cheque, who has not been guilty of improper delay, whereby the drawer has suffered, has a clear right to recover the amount from the drawer. A cheque may, however, be refused payment from various causes besides the failure of the banker, or the want of effects of the drawer. Thus, payment of a cheque may be stopped, or it may be stale; and in the latter of these cases, it is apprehended that the holder would have no remedy to recover the amount until after the lapse of a reasonable time to enable the banker to make the usual inquiries of his customers. This is the view of the law which is taken in a note in Moody and Robinson's Reports, vol. ii., page 404, where it is said :— "Another reason for the bankers refusing to pay may be the staleness of the cheque, it being understood as a rule of business with regular bankers, not to pay old cheques without inquiry. If, upon the bankers refusing on that ground to pay the

cheque, the holder were to commence an action against the drawer, without giving him an opportunity of authorizing his bankers still to pay the cheque, the plaintiff would probably fail, on the averment of due presentment of the cheque; and the non-presentment in due time might, under such circumstances, support the plea of payment of the original debt by the cheque; although the holder of a cheque who does not present it within a reasonable time is guilty of laches, the consequences of such laches may vary according to the circumstances of each case."

The holder of a cheque may sue the drawer, although it was not drawn in the holder's favour originally, but has passed through the hands of several intermediate parties; it being clearly settled that cheques are transferrable, either by delivery or by indorsement, although the former is the most usual.


The following remarks of Mr. Justice Byles upon this subject deserve attention :-" But where a cheque, instead of being presented for payment in due course, is transferred, and circulates through several hands, it is conceived that there is a distinction between the time of presentment necessary as against the original drawer in the event of the banker's insolvency, and the time necessary to charge the person from whom the cheque was immediately received. The liability of the drawer cannot, it is apprehended, be enlarged by circulating the cheque; and therefore,

in order to charge him, if the banker fail, the cheque, in whose hands soever it be, must be presented within the period within which the payee or first holder must have presented it; but as against the party transferring the cheque to the holder, it is sufficient, whatever be the date of the cheque, to present it, or forward it for presentment, on the day next after the transfer."

As regards the remedies of the holder of a cheque against the indorsers, they are the same as those which he would have on a bill of exchange. He cannot, upon its dishonour, sue a person, not being the drawer, who has passed it without indorsing it; but if it was cashed or received in payment of a debt, he may sue the party from whom he received it for the consideration he gave for it (Chitty, Jun., 45), provided there has been no laches which has caused loss.

The holder does not appear to have any remedy against the banker who refuses payment, unless the banker has entered into an agreement with him to pay it. In such a case, it is conceived the banker would be liable to the holder; what amounts to such an engagement is therefore an object of inquiry.

In Robson v. Bennett, the Court of Common Pleas said "A draft was drawn on the 11th of September, on that day it was carried to the house of the drawer, and, in the language of those persons, was marked; the effect of that marking

is similar to the accepting of a bill, for he admits thereby assets, and makes himself liable to pay. It is the practice of the bankers not to pay bills of this description which are presented after 4 o'clock, but to mark them; and it is usual that bills marked on one day are carried to the clearing-house, where the clerks meet, and paid there on the next day. Therefore, it is the same thing as if a banker had written on a cheque, 'We pay this to-morrow at the clearing-house.""

In Fry and Chapman's bankruptcy, in the year 1829, several holders of cheques on the bankrupts claimed to prove, alleging that they were equitable assignees of choses in action. The commissioners took time to consider, and afterwards disallowed the claim. (Byles, 2).

A balance at a city banker's cannot, it is apprehended, be attached, to the prejudice of outstanding cheques.

See also Law Times, 1871, p. 195.




1. Duty of a banker to pay 10. Of cheques payable when cheque on presentation. banker has no assets of 2. Not when funds previously drawer.

applied in payment of a bill. 3. As to account opened by more than one person.

4. Act of bankruptcy bydrawer. 5. Mutilated cheques not payable.

6. Fraudulently altered cheques.

7. Forged cheques paid


8. Alleged forged cheques. 9. Recovery of amount cheques overpaid.

11. Where the drawer and the holder employ the same


12. Recovery of amount of cheque from payee.

13. Of cheques cancelled in mistake.

by 14. Death of drawer.

15. Of the coin in which a cheque must be paid.

of 16. Of collecting cheques.

17. Of bankers' lien on cheques.

Ir is proposed now to consider those points in the law of cheques, which peculiarly relate to the duty and liability of the bankers upon whom a cheque is drawn.

1. Duty of a banker to pay a cheque on presentation.

There is an implied contract on the part of bankers to pay cheques drawn upon them by a

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