Bankers and Banking.
596 Sect.
3.
Collection of Cheq ues,
When bank becomes transferee.
habitual dealings with the banker in the nature of ordinary banking business. There must be use and habit (/). A single isolated transaction does not constitute a customer (g), nor does the continued cashing of crossed cheques over the counter from which the bank derived no direct benefit Having a current account constitutes a person a customer (i), Habitual discounting of bills so also having a deposit account (k). with a bank would probably constitute a customer. A first transaction, e.g., paying in a cheque to open an account, even though followed by other transactions, would probably not be protected (/). If a man is not a customer, his drawing a counter-cheque for the amount, or the entry of the transaction in the banker's books under such a heading as " Sundry Customers," is of no avail {m). A man may be a customer although his account is overdrawn (?^). Where a crossed cheque drawn on a head office or a branch is paid in by a customer at another branch, and paid or allowed in account, the bank is protected either as a collecting or as a paying bank (o),
1220. As above mentioned, the receipt of payment must be Save in the case of crediting exclusively for the customer (jj). crossed cheques as cash before receipt of payment (q), a banker who becomes the transferee of a crossed cheque, or so acts with regard to it that but for a forged indorsement he would become the transferee of it, does not subsequently receive the proceeds for the customer, but for himself (7-). The iDanker becomes a transferee, if he gives cash for it over the counter, or if the cheque is paid in on Brown
Lacave dh Go. v. Gredit cfe Go. (1894), 10 T. L. R. 386 Great Western Rail. Go. v. London and Gounty Q. B. 148 Banking Go., [1901] A. C. 414. Matthews v. Brown Gomptoir d'Escompte, [1894] 2 Q. B. 157 (g) KleiniDort v. & Go., supra ; Lacave d Go. v. Gredit Lyonnais, supra. {h) Great Western Bail. Go. v. London and Gounty Banking Go., supra. {i) Lacave cfe Co. v. Gredit Lyonnais, supra. {k) Great Western Rail. Go. v. London and Gounty Banking Go., supra, per Lord Davey, at p. 421. He was not a customer at the moment, but he was going to become a (J) customer if the cheque was collected " {Tate v. Wilts and Dorset Bank (1899), Journal of Institute of Bankers, Vol. XX., p. 376, per Darling, J.). (m) Matthews v. Brown ch Go., supra; Great Western Rail. Go. v. London and (/) Matthews v.
Lyonnais, [1897]
1
County Banking
Go., supra. Glarke v. London and Gounty Bank, [1897] 1 Q. B. 552, criticised by Lord LiNDLEY in Great Western Rail. Go. v. London and Gounty Banking Go., supra; but the doubt was whether the bank received only for the customer, not whether he was one. Compare Hardij v. Veaseij (1868), L. R. 3 Exch. 107. Gounties Bank, [1902] 1 K. B. at p. 274, where the (0) Gordon v. Gajntal and cheque was to order and bore a forged indorsement (not included in appeal to House But the protection would also apply in the case of a bearer chec^ue ; of Lords).
{n)
see p. 608, post.
(p) See note
(e),
p. 595, ante.
Provided for by the Bills of Exchange See note (e), p. 597, post. (6 Edw. 7, c. 17). {q)
(Crossed
Cheques) Act, 1906
Gapital and Gounties Bank v. Gordo7i, [1903] A. C. 240, per Lord Macnaghten, "It is impossible, I think, to say that a banker is merely receiving payment for his customer and a mere agent for collection when he receives .payment of a cheque of which he is the holder for value." The person in possession of an order cheque under a forged indorsement could never be a holder text.
- for value, so that these words must be read in the extended sense given in the
(r)
at p. 245:
