—
Bankers and Banking.
610 Sect.
7.
Protection to Bankers
paying Cheques. Indorsement at request of
otherwise drawn would be in the ordinary course of business appears more than doubtful. But the protection extends to a 2:>er jpro.
indorsement
{i).
Where
a person claims payment of an open order cheque over the counter, alleging that he is the payee thereof, and only signs his name on the back at the insistent request of the banker, it is submitted that the banker does not obtain protection (k).
banker.
Stjb-Sect,
Payment
in
contravention of the crossing.
1239. The
3.
Crossed Cheques.
Exchange
882
does not, as the a banker's paying in contravention of the crossing, except in the case of a cheque crossed to more than one banker, none of whom is an But a banker so doing is liable to the agent for collection. true owner for any loss the latter may sustain thereby (m). In the case of a forged indorsement he would also lose the protection of sect. 60, snch payment not being in the ordinary course of business {n). Notwithstanding the absence of the direct prohibition, a banker cannot charge his customer with the amount of a crossed cheque paid in contravention of the crossing (o), even, it would seem, though payment were made to the true owner (j:>). Bills
of
Act,
3
{I),
earlier crossed cheques legislation did, directly prohibit
(16 & 17 Vict. c. 59), s. 19, in which the words " drawn on a banker are the same as Consider, howin s. 60 of the Bills of Exchange Act, 1882 (45 & 46 Yict. c. 61). ever, the history of the legislation given in Charles v. Blackwell (1877), 2 C. P. D. 151, at p. 156, and in Ca^oital and Counties Bank v. Gordon, [1903] A. C. 240, " Lord LiNDLET, at p. 250. There is nothing about " ordinary conrse of business in s. 19 of the Stamp Act, 1853. decided on the Stamp Act, 1853 (16 & 17 {i) Charles v. Blackicell, supra, Yict. c. 59), s. 19, but applicable to the Bills of Exchange Act, 1882 (45 & 46 Yict.
c.
61),
s.
60.
"Indorsement" means an indorsement completed by delivery (Bills of Exchange Act, 1882 (45 & 46 Yict. c. 61), s. 2). There can be no delivery to the drawee. The terms of sect. 60 as to "indorsement of the payee or any subsequent (k)
indorsement " point to the indorsement being for negotiation, or at least collection and those as to the banker being deemed to have paid the bill in due course, notwithstanding the forged indorsement, imply payment made to an ostensible holder under the indorsement {Keene v. Beard (1860), 8 C. B. (n. s.) 372, at p. 382, where Byles, J., held such signature a receipt, not an indorsement. Compare the Finance Act, 1895 (58 Yict. c. 16), s. 9, treating such signature as a The words of Cockburn, C.J., in Charles v. Blackwell, supra, at p. 157, receipt. may be read to the contrary effect). Quaere, whether payment in such circumstances is " in good faith and in the ordinary course of business " for the purposes of the section. (0 45 & 46 Yict. c. 61. (m) Bills of Exchange Act,
1882 (45 & 46 Yict. c. 61), s. 79 (2). Smith v. Union Bank of London (1875), 1 Q. B. D. 31, 35. (o) Smith V. Union Bank of London, supra, in which case there was a direct prohibition but the disability to debit the customer was apparently based on disobedience to mandate (Bohbett v. Pinkett (1876), 1 Ex. D. 369). Such payment would clearly be made negligently, as to which see p. 608, ante. See also proviso "Shall not be to Bills of Exchange Act, 1882 (45 & 46 Yict. c. 61), s. 79. questioned" implies that the customer may repudiate payment contrary to the {n)
crossing.
Payment had been made to the true owner, the bond fide holder, in Smith Union Bank of London, supra. Possibly, however, the Court would apply the Bevan v. The National Co., [1894] 2 Q. B. 40 doctrine laid down in Reid v. Rigby (p)
Y.
