Bankers and Banking.
586 Sect.
1.
Receipt of
by paying out order
Money on Current Account. Appropriation of
payments.
of
it
even cheques drawn prior
to service of the
(e).
The Statute
of Limitations (/) applies to a balance left untouched payment of interest or sufficient acknowledg-
for six years without
ment (^). On a current
account, however, the earlier drawings out
are, in the absence of appropriation, attributed to the earlier payments in (//) and where the moneys of several beneficiaries have been
wrongfully mixed with a private account, their respective rights in any balance will be adjusted in accordance with this rule (i). There are, however, exceptions to this rule thus, where a trustee or other person in a fiduciary position has mixed trust moneys with his private account, all drawings out are attributed to his own money so far as it will go (k). Although in ordinary cases the right of appropriation, unless exercised by the debtor at the time
payment, remains in the creditor until finally exercised by (/), it would seem that in a current account the attribution of earlier payments in to earlier drawings out cannot be rebutted save by agreement between the parties or by evidence of intention amounting to such agreement (?»)• Moneys paid into current account to meet a particular bill or cheque must be applied of
him
accordingly
(n).
1197. In the absence of special agreement, a guarantor has no when right to control the appropriation by customer or banker of moneys account paid in (o). The banker is bound, however, to deal with the guaranteed. Payments in may be accounts in the ordinary way of business. appropriated to a pre-existing debt which is not covered by the On the security, and of which the surety had no knowledge termination of the guarantee the account may be closed, and a new one opened, to which all payments in may be carried (q). But the banker is not entitled, where an account is guaranteed to a limited extent, to split that account during the continuance of the guarantee and attribute all payments in to the unsecured balance (r). So long as an account is unbroken, a surety ought not to be prejudiced by any departure from the rule of appropriation of items in order of date, unless his consent to such departure
Appro-
priation
(e) Rogers v. Whiteley, [1892] A. C. 118 ; Yates v. Terry, [1901] 1 K. B. 102 (county court order). (/) 21 Jac. 1, c. 16. See title Limitation of Actions. and see Atkinson v. Bradford Third Ig) Pott V. Clegg (1847), 16 M. & W. 321 Equitable Benefit Building Society (1890), 25 Q. B. D. 377, per Lord Esher, M.E., at p. 380, and Be Tidd, [1893] 3 Ch. 154, j^er North, J., at p. 156. (h) Clayton's Case (1816), 1 Mer. 572, 608. {i) Be Stefining, [1895] 2 Ch. 433. See, further, title Trusts and {k) Re HalletVs Estate (1879), 13 Ch. D. 696. TitTJSTEES {I) Gory Brothers v. Oumers of Steamship Mecca, [1897] A. C. 286, 294 Smith V. Betty, [1903] 2 K. B. 317 Seymour y. Pickett, [1905] 1 K. B. 715. (m) Gory Brothers v. Owners of Steamship Mecca, supra; Gity Discount Co. v. McLean (1874), L. B. 9 C. P. 692. {n) Farley v., Turner (1857), 26 L. J. (ch.) 710. (o) Re Sherry, London and County Banking Go. v. Terry (1884), 25 Ch. I>. 692. As to a guarantor's rights generally, see title Guarantee. {p) WilliarriS v. Raiolinson (1825), 3 Bing. 71.
(q)
Re Sherry, London and County Banking
(r)
Ibid.
Co. v. Terry, supra.
