Bankers and Banking.
604 Sect.
6.
Payment
of
Cheques. Undated cheques.
Authority to draw.
Joint accounts.
Partnership accounts.
Bankers usually refuse payment of an undated cheque, or one on which the date is incomplete, e.g., December 1, 190-. The practice is of doubtful validity (/), but any alteration of the date of a. cheque appears to be a material alteration {g) and a banker should therefore refuse to pay a cheque on which the date appears to have been altered. ,
1229. The cheque must be drawn by a person having authority express or implied {h). And a jper pro. signature, or one of like import, puts the banker on inquiry as to the authority of the person so signing (i). ^Yhere the account is not a simply individual one, the parties to draw and form of drawing are generally arranged on opening the account, and such arrangement must be strictly observed. Apart from agreement {k), cheques on ordinary joint accounts should be drawn by all the parties in whose name the account stands (l). But the banker is justified, in case of death, in allowing the survivor to draw any balance standing to the joint account, even as between husband and wife, whether both or either one is entitled to draw. During a partnership, and in the absence of instructions to the contrary {m), any partner has the right to draw on the partnership account in the firm name The death of one or more partners does not preclude the surviving partner or partners from drawing on the firm account (o), but the modern and preferable method is that, where to the knowledge of the banker a partner dies, the old Mood. & E. 401, it is suggested that the practice is justified by the custom of In any event, the customer's credit would not be damaged by the bankers. cheque being returned marked with, this ground of refusal. Act, (/) A bill is not invalid by reason of its being undated (Bills of Exchange 1882 (45 & 46 Yict, c. 61), s. 3 (4) (a) ). It has been suggested that the holder can till in the date, but sect. 12 of the Bills of Exchange Act, 1882, does not apply to cheques. The date of a cheque would not seem a material particular " within and so, to make the cheque If it is, the banker is not holder for value s. 20. effectual against the drawer, the date would have to be inserted in reasonable time and in strict accordance with authority, of neither of which the banker is in
a position to (g)
j
Bills of
udge.
Exchange Act, 1882 (45 & 46
Vict.
c.
61),
s.
64
(2),
not confined to
bills pa)'able after date.
{h) Theoretically a
and Counties Bank
v.
Compare Capital was there awarded under bankers' drafts, as being " drawn
cheque need not be drawn by a customer.
Gordon, [1903] A. C. 240.
Prr-tection
the JStamp Act, 1853 (16 & ] 7 Vict. c. 59), s. 19, to upon a banker," which words occur in the definition of a cheque contained in the But a cheque drawn otherBills of Exchange Act, 1882 (45 & 46 A^ct. c. 61), s. 73. wise than by a customer would not come within any practical rules of banking law. There can be no obligation to pav where there are'^no funds out of which to pay. E.g., an executor (^) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 25. cannot as a rule delegate his powers, and a cheque signed per pro. an executor ought not to be paid without inquiry and satisfactory explanation. 20 Eq. 328. (k) For an example, see Marshal v. Cruttwell (1875), L. compare [l) Hushand v. Davis (1851), 10 C. B. 645,_per Maule, J., at p. 650, and Brandon v. Scott (1857), 7 E. & B. 234. (m) For an example of the effect of such instructions, see Twihell v. London Suburban Bank, [1869] W. N. 127. Opening an account {n) Partnership Act, 1890 (53 & 54 Vict. c. 39), ss. 5, 8. in the firm name is evidence of authority in each partner to draw. (o) Backhouse v. Charlton (1878), 8 Ch. D. 444.
K
