THE RIGHT TO THE ACCOUNT T.L.R. 776. lute; but before the bankers paid the money, another CHAP. VII. creditor, A, interposed. A was a secured creditor holding Cairney v. a debenture, granted by the company some time pre- Back, 22 viously, which created a charge over all the property for the time being of the company by way of floating security. By virtue of this security, A had a receiver appointed, who claimed the bank balance before it had been paid under the garnishee order. The bank was allowed to bring the money into Court, and an interpleader issue directed between A and B, when A was held to have the better claim. In this case it should be noticed there was no denial of its customer's claim by the bank, and both claimants derived their rights from the customer. under Involuntary Alienation of Bank Balances.-It Restitution must not be supposed because a bank's duty is, first, to Crimes Act. legally fulfil its own contracts, there is no legal means of Ante, p. 97. obtaining the balance of an account for the parties justly entitled to it. Thus, in all cases of larceny and similar crime, if when convicted there is a bank balance remaining to the credit of the thief, which can be shown to be built up of the proceeds of the property stolen, then its restitution to the rightful owner can be ordered by the Court, and the bank must pay on such order. In re Mon And in the case of a bank balance which, though not Declaration of Bankruptcy in the name of the bankrupt, belongs in right to a bank- Court. rupt estate, the official assignee can apply for, and obtain, a declaration that the account belongs to the bankrupt estate, whereon the right to the account would pass to the official assignee. In a case where the assignee of a bankrupt husband obtained from a Court a declaration of his tagu, ex p. Ward, 1897, right to an account which stood in the name of the bank- 76 L.T. 203. rupt's wife, the bank was held justified, on the ground Cf. post, p. of contract, in paying cheques of the wife between the (ostensible dates of the receiving order and the declaration of heading). assignee's right. Again, since bank balances are debts, they can be 106 Garnishee order. CHAP. VII. Rogers v. Terry, 1901, Order of taken in execution to satisfy a judgment obtained by any stranger to the bank against its customer. This is effected by means of a garnishee order, which, when served upon the banker, acts to tie up the whole of that customer's credit balance at date of service, and cheques presented while the order remains in force, even though issued before the service of the order, should not thereafter be paid. But the bank may open a new account if desired. In the case of a fraudulent trustee or partner or agent, there is in principle no reason why, in a proper case, the Equity Court should not grant an injunction to the bank to prohibit it from paying any further cheques Injunction to of the party called to account; a lesser step is, as a rule, depositor. sufficient the injunction is directed to the nominal customer, and the bank informed of its existence. Ultimately the injunction will be removed, when the account may again be operated as usual, or an order of Court will effect the necessary transfer of the balance to its proper owner. If the nominal customer refused to sign a cheque for this purpose, that might, according to the form of decree, be contempt of Court, and severely punishable; moreover, the Court would not allow any such obstinacy to defeat it: if necessary, the Court would appoint someone to sign for the depositor. CHAPTER VIII. DISCLOSING THE ACCOUNT. As has been seen (ante, p. 93) in Tassell v. Cooper, CHAP. VIII. the question was raised whether the customer of a bank had a right to absolute secrecy towards strangers, and the Court, without deciding the point, thought there was no such duty. In this consideration, two points are especially worth notice : (1) It is customary with banks to bind their (2) In the ordinary law of contracts there is no It is usual for banks to be very discreet with regard to their customer's affairs, but unless it could be proved to be a customary part of the ordinary duty of banks to preserve an absolute secrecy with regard to customers' Absolute accounts, the depositor could not claim complete secrecy yet held to be as a right. secrecy not imposed by law or Up to the present, in no reported case has any such custom. absolute duty been proved. The decisions are as fol lows: CHAP. VIII. Foster v. Bank of London, 3 F. & F. 214. Hardy v. In 1862 Mr. Foster sued the Bank of London for a breach of duty in disclosing his account under these circumstances:-A member of a firm, creditors of Foster, went to the bank with a cheque of Foster's for £250, and a bill for £198; these creditors were Perederoos and Co., and they were customers of the same bank. The manager was seen and asked the state of Foster's account; this was answered. The manager was then asked whether, if Perederoos and Co. paid in £104, the cheque and bill could be paid; reply, they would be paid. The bill and cheque were presented, and paid that day; and a cheque of the firm for £104, dated the next day, was, on the next day, paid to Foster's credit, but credited by the bank as for the preceding day. The Chief Justice, who tried the case before a jury, thought the bank could not go further than to say, "Not sufficient assets," and the jury unanimously expressed themselves to the same effect. The Chief Justice said: "That is, the jury are of opinion that it is the duty of a banker to in no way disclose the state of his customer's account?" To which the jury said they were. Verdict for plaintiff for £432. The case of Tassell v. Cooper has already been referred to, p. 93. The cases of Tassell v. Cooper and Foster v. Bank of Veasey, L.R. London were both brought before the notice of the Court 3 Exch. 107. in 1868, when a customer sued his banker for damages said to be occasioned by disclosing his account without. justifiable cause. The duty which the plaintiff alleged was, that the bank should not disclose his account except on a reasonable or proper occasion. The Court, having regard to the course the case had taken, did not find it necessary to decide definitely that such a duty existed, but held that, assuming the duty to exist, it was properly left to the jury to decide as a question of fact whether the disclosure had been upon a reasonable and proper occasion. It was CHAP. VIII. pointed out that in Foster v. the Bank of London the Supra. grievance lay, not so much in disclosure of the account, as in a trick by which the bank conspired with one of the plaintiff's creditors, to the prejudice of the rest. There is no later case directly in point. Text-book writers incline to the existence of such duty. Sir John Paget puts it as "morally, and probably legally," an Paget, p. 4. obligation of the bank. Grant, basing his opinion on the case just referred 5th ed., p. 7. to, says: "It appears to be doubtful whether, by virtue of the relation of banker and customer, any legal duty is imposed on the banker not to disclose his customer's account except upon a reasonable and proper occasion, so as to give a cause of action without special damage; or whether the banker's duty is not merely a duty not to act to the prejudice of his customer, requiring special damage to make a breach of the duty actionable. But, assuming the existence of a legal duty on a banker not to disclose his customer's account, except upon a reasonable and proper occasion, the question of whether the disclosure was made on such an occasion is a question to be left to the jury." Evidence There is a section in the Evidence Act, 1890, of the Under State of Victoria to the effect that no bank shall be com- Act. pellable to produce the ledgers or other account books in any legal proceedings unless a Judge specially orders production. And similar statutes are in force in the other States. L.R.C.N. 41. Under this section there was recently an application 1903, Argus to a Judge in Melbourne for an order directing the Bank of Australasia to produce its books at a trial; the object being to bring out at the trial the particulars of the account of one Barlow, who had sold wheat to both the parties concerned in the action. This Barlow had received money from both, but the wheat was delivered to |