No. 8.- - Robarts v. Tucker, 16 Q. B. 578–580.

adequate to answer the order. A customer whose acceptance had been dishonoured under such circumstances failed in his action. Whitaker v. The Bank of England, 1 C. M. & R. 744, S. C. 5 Tyr. 268.] The present case is analogous to Young v. Grote, 4 Bing. 253; 5 L. J. C. P.. 165.

Sir Fitzroy Kelly, for the defendant in error, offered to remit the damages on the first count; and he was not called upon to argue. PARKE, B. We are all agreed in opinion. If this were the ordinary case of an acceptance made payable at a banker's, there can be no question that making the acceptance payable there is tantamount to an order, on the part of the acceptor, to the [* 579] banker to pay the bill to the * person who is according to the law merchant capable of giving a good discharge for the bill. Therefore, if the bill is payable to order, it is an authority to pay the bill to any person who becomes holder by a genuine indorsement. And, if the bill is originally payable to bearer, or if there is afterwards a genuine indorsement in blank, it is an authority to pay the bill to the person who seems to be the holder. The bankers cannot charge their customer with any other payments than those made in pursuance of that authority. If bankers wish to avoid the responsibility of deciding on the genuineness of indorsements, they may require their customers to domicile their bills at their own offices, and to honour them by giving a cheque upon the banker.

Such being the general case, is there anything appearing on the bill of exceptions to distinguish the present case from the ordinary one? Is there any evidence of an authority to pay this particular bill? We are all of opinion that there is none. Reliance is placed on the evidence which shows that the company were accustomed to take precautions before accepting a bill. But that custom was never communicated to the bankers; and there is no evidence, direct or indirect, of any communication to the bankers from which an authority to pay this bill without examination could be inferred.

Then reliance is placed on Young v. Grote, 4 Bing. 253, 5 L. J. C. P. 165. In that case the customer had signed blank cheques, and left them with his wife to fill up. She filled them up in such a manner that the holder was enabled to add to the amount; and it was held that the bankers who had paid this larger [* 580] amount might charge their customer with it. This was

No. 9.

Bank of England v. Vagliano. 60 L. J. Q. B. 145.

in truth considering that the customer had by signing a blank cheque given authority to any person in whose hands it was to fill up the cheque in whatever way the blank permitted. It is enough to say that is not the present case.

We think, therefore, that the plaintiffs below were entitled to recover on the count for money lent. The special count, as has been intimated in the course of the argument, misstates the banker's undertaking; and there was no evidence to prove it; so that the plaintiff below was not entitled to recover nominal damages on that count.

We think that the learned Judge was right in his ruling as to the money counts, and wrong in his ruling as to the special count. The judgment may be suspended for the present, till the defendants in error consider whether they can by entering a remittitur obviate the necessity of a venire de novo, and how the judgment should be entered.

The rest of the Court concurred.

The parties having come to an agreement as to the costs of the trial and writ of error, no subsequent application was made to the Court as to the form of judgment.1

Bank of England (appellants) v. Vagliano.

Vagliano (plaintiffs) v. Bank of England.

60 L. J. Q. B. 145-173; 1891, App. Cas. 107-172.

This was an appeal from the judgment of the Court of [145]2 Appeal (reported 23 Q. B. D. 243; 58 L. J. Q. B. 357),

in which a judgment of CHARLES, J. (reported 22 Q. B. D. 103, 58 L. J. Q. B. 27), was affirmed by COTTON, L. J., LINDLEY, L. J., BOWEN, L. J, FRY, L. J., and LOPES, L. J,; dissentiente Lord ESHER, M. R.

The facts were briefly these:—

The plaintiff in the action claimed to be entitled to be credited by the defendant bank with a sum of £71,500 with which the bank had debited him in respect of certain bills, which bore the genuine signature as acceptors of the plaintiff's firm. The bills purported to be drawn by one Vucina, who was a correspondent of the plaintiff's firm, but they were in fact wholly fictitious bills

1 Reported by C. Blackburn, Esq.

2 The pages marked in the statement of the case are those of the Law Journal report.

No. 9.

Bank of England v. Vagliano. 60 L. J. Q. B. 145, 146.

fabricated by a clerk in the employ of the plaintiffs, who by placing them before Mr. Vagliano along with forged letters of advice obtained the acceptance of the firm. The payee named in the bills was "Petridi": There was a person of this name who had some business with the firm, but this person had no concern with the transaction. After obtaining the acceptance of the firm the clerk forged the signature of the payee and obtained payment of the bills at the counter of the bank. Both the Courts below had decided in favour of the plaintiff's claim against the bank.

The Attorney-General (Sir R. E. Webster, Q. C.) and H. D. Greene, Q. C. (Pollard and Reginald Bray with them), for the appellants. The payee, indorser, and indorsee to these bills were fictitious and non-existent persons. The words "fictitious and non-existent" mean not that there are no such persons in existence in fact, but that they are fictitious and non-existent with reference to the bills. Petridi is a very common name, and there is no mention of Constantinople on any of the bills, which might have identified the payee with the firm proved to exist there. There was no evidence that Vagliano relied upon his knowledge of the existence of that firm. This question depends on the construction of the Bills of Exchange Act 1882 (45 & 46 Vict.

c. 61), s. 7, sub-s. 3. That Act, by section 97, sub-s. 2, [* 146] * preserves the rules of common law, including the law merchant, where not inconsistent therewith. In order to find out the meaning of "fictitious and non-existent," the decisions before the Act must be looked at. In Stone v. Freeland, 1 H. Bl. 317 n., the name of the payee was that of a real firm with whom the acceptor had dealings, but it was held fictitious because the acceptor intended to indorse himself. In Collis v. Emmett, 1 H. Bl. 313, it was held that if there be no person who can by any possibility give an order, the bill is payable to bearer. This must mean where there is no person who has a right to give the order. It cannot be that merely because there is in existence a person of the name put in the bill, the bill is not to be payable to bearer. Here the forger never intended C. Petridi & Co. of Constantinople as the payees; he never intended them to indorse. He put the name in with the intention of himself indorsing. In Gibson v. Minet, 1 H. Bl. 569, 589; 1 R. R. 754, the name of the payee was John White, a common name, and the drawer indorsed; see also Gibson v. Hunter, 2 H. Bl. 288. In Mead v.

Would it

Young, 4 T. R. 28; 2 R. R. 314, it was held that indorsement by a person of the same name as the payee was forgery. not have been so held here if any firm bearing the name of Petridi had indorsed, no such firm having the right to do so? In Cooper v. Meyer, 10 B. & C. 468; 8 L. J. K. B. 171, the drawer and payee were real firms whose names were put in the bills without authority and signed by Darby, but the Judges speak of them as not being real persons. They must mean that they were not real

in relation to the bills.

In Phillips v. Im Thurn, 18 C. B. N. S. 694; 35 L. J. C. P. 220, the evidence only showed that no such person as Carlos Raffo was known in Lima. In The London and South Western Bank v. Wentworth, L. R., 5 Ex. D. 96; 49 L. J. Ex. 657, S. H. Head was a real person whose name was put in to give credit to the bill, yet he was treated as fictitious because, there being no real drawer, there could be no person designated by him whose order would be necessary to give title to the bill.

This being the state of the law before the Act of 1882 was passed, it was enacted by section 7, sub-section 3, that "where the payee is a fictitious or non-existent person the bill may be treated as payable to bearer. " The Court of Appeal has read into these sub-sections" with the knowledge of the acceptor." The words are not there, and their insertion is inconsistent with the intention of the legislature. The part of the Act where the clause occurs deals not with the liability of the acceptor, but with the form and interpretation of the bill. The knowledge of the acceptor has nothing to do with the matter. In other parts of the Act where knowledge is material (e. g. section 50) it is expressed to be so. Can it be that when the drawer puts in a fictitious name as payee, the question whether the bill is payable to bearer or not depends on the knowledge of the acceptor? The acceptor by acceptance honours the name of the drawer. If the drawer directs the acceptor to pay to the order of the payee, and the payee is fictitious, that is a direction to pay to the bearer. If Vucina had drawn the bills, Vagliano would be entitled to charge him, and Vucina could not object to the indorsement, because, the payee being fictitious, the acceptor, as well as every one else, may treat the bill as payable to bearer. It surely cannot be said that Vagliano's right to debit Vucina would depend on his knowing at the time of accepting that the payee was ficti

No. 9. Bank of England v. Vagliano. 60 L. J. Q. B. 146, 147.

tious. If the drawer has used a fictitious name the acceptor runs no risk by paying the bill if right in form, that is, if indorsed with the name of the payee. Phillips v. Im Thurn. There seems to be no difference between an ordinary acceptor and an acceptor for honour. It is for the drawer and no one else to say whether a bill is to be payable to order or bearer; his intention must decide. But how can the intention of the forger affect the question? How can a fictitious drawer appoint a real [* 147] payee? BOWEN, L. J., thought that Gibson v. Hunter,* was an authority that the knowledge of the acceptor was material, but all that was decided was that the facts were so loosely stated that no judgment could be given. The view that such knowledge is material appears in Bennett v. Farnell, 1 Camp. 130, 133 n., 180, and the editor's notes to that case.

The bank were guilty of no negligence in paying the bills. They acted as the agents of Vagliano, and it was his act that caused them to pay. In the case of three-day bills, there is not much time to make inquiries. The very case has been decided in the bank's favour in Price v. Neal, 3 Burr. 1354. As to the point that it was negligent to pay such large amounts over the counter the evidence of Mr. Disney is clear that he called Ziffo's attention to the matter, and was recommended to pay the bills if properly advised. Credit ought to have been given to this positive evidence, against the mere statement of Ziffo that he did not remember the conversation. Ziffo was a most confidential clerk, and the bank were justified in relying upon his advice.

There was negligence by Vagliano, and the Courts below were wrong in holding that it was outside the transaction. The Bank of Ireland v. Evans's Trustees, 5 H. L. Cas. 389, 408, 413, is the leading authority on this point. The expression there used is that the negligence must be "in or immediately connected with the transaction." The seal of a corporation had been put to a document without the knowledge of the corporation. Here Vagliano signed the acceptances himself. Other authorities in point are The Merchants of the Staple v. The Bank of England, L. R., 21 Q. B. D. 160; 57 L. J. Q. B. 418; Swan v. The North British Australasian Company, 2 H. & C. 175; 32 L. J. Ex. 273; Baxendale v. Bennet, L. R., 3 Q. B. D. 525; 47 L. J. Q. B. 624; Arnold v. The Cheque Bank, L. R., 1 C. P. D. 578; 45 L. J. C. P. 562; and Robarts v. Tucker, 16 Q. B. 560; 20 L. J. Q. B. 270. No