—— Part
III.
Business of Banking.
607
to admit, or against whom it was proved, that he drew the cheque for the purpose of defrauding the trust (^). A banker should not pay a cheque drawn on trust funds in his own favour in circumstances which would in law render him accessory to a fraud, e.g., where there has been a balance struck against a trustee on his private account and pressure for payment, followed by the drawing of a cheque on the trust account for the amount due (g).
who had
1234. The duty and authority to pay a cheque drawn by a customer are determined
By countermand
Sect.
6.
Payment
of
Cheques,
Determination of authority to pay.
of payment {r), commonly known as stopping Stopping by telegram is sufficient (s). One partner has Counterpower to stop a cheque issued in the firm name one executor has mand. power to stop a cheque signed by another {t). Where a banker has marked a cheque at the instance of the customer, the customer cannot countermand payment of the cheque after issue {u). (2) By notice of the customer's death {x). Where one of two or more partners or customers on joint Death, account dies, the survivors or survivor can still draw on the account {a). But on the death of one of several trustees the banker must not honour cheques on the trust account drawn by the (1)
a cheque.
survivor or survivors unless satisfied of his or their power so to of the trust. (3) By a receiving order made against the customer or notice of Bankruptcy an available act of bankruptcy on his part (&). Notice of intention to commit an act of bankruptcy has not the same eftect (c). If a banker chooses to open a new account with the bankrupt after adjudication, he cannot refuse to honour cheques drawn on it, unless the trustee intervene {cl). If the banker were served with an injunction not to pay, he Injunction.
draw under terms
Gray v. Johnston (1868), L. R. 3 H. L. 1, per Lord Cairns, at p. 11 Hunt Maniere (1864), 34 Beav. 157. {q) Gh^ay v. Johnston, supra, and cases cited, note (h), p. 584, ante. As to payment (r) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 75. contrary to instructions, see Twibell v. London Suburban Bank, [1869] W. N. (p)
V.
127. {s) Curtice v. London City and Midland Bank (1907), 23 T. L. R. 594, where the Court agreed that there might be a countermand by telegram, but differed as to whether there had been a sufficient communication of the countermand. {t) G-mmt V. Taylor (1843), 2 Hare, 413. {u) By so marking (see note (m),p. 606, ante), the banker becomes bound to pay Compare Groodwin v. Robarts (1876), L. R. 10 to any other banker presenting it. Exch. at p. 351 Gaden v. Newfoundland Savings Bank, [1899] A. C. 281 Imperial Bank of Canada v. Bank of Hamilton, [1903] A. C. 49. Sect. 75 of the Act does not include the case as an exception, but the banker is in the position of an agent with interest, for which see, further, title Agency, p. 228, ante. Even if the cheque is not crossed, it might be presented through a banker, or be subsequently crossed. {x) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 75. [a) See p. 604, ante. (6) The right and duty to refuse payment in such case arises, not so much from the actual determination of the customer's authority as from the fact of the relation back of the trustee's title in the event of adjudication, which renders the funds not available. See p. 585, ante. Trustee of Lord Hill v. (c) Re Wright, Ex parte Arnold (1876), 3 Ch. D. 70 Rowlands, [1896] 2 Q. B. 124.
{d) See, as to
after-acquired property, note {d), p. 584, ante.
