—
— Part
III.
Business of Banking.
617
Mere silence, without resulting injury to the banker, does not work estoppel or constitute adoption (a). The alteration in the position of the banker necessary to support adoption is not confined to payment of the cheque. Loss of
^ect.
9.
Forged or Altered
C hequ es,
opportunity of protecting himself against subsequent forgeries, any, by the same person, loss of the chance of taking proceedings, civil or criminal, against the forger, as by his escaping out of the jurisdiction, constitute sufficient alteration in the position of and prejudice to the banker (li). It appears immaterial whether civil proceedings against the forger would have resulted in recovering any money or not (i). Where this principle of adoption applies, it covers all previous forgeries by the same person (k). if
Recovery of
Sect. 10.
Money paid on Forged Documents.
the money has been received maid fide, it may be Eecovery of recovered by the payer (?«). Where the payment is to a person ^^^^^J^^^g^^ o^gery. who, though without title, receives the money bond fide (e.^., an innocent person in possession under a forged indorsement), the case is compHcated, and depends on the nature of the documents and of the forgery. The payment is made under a mistake of fact in the transaction common to both parties, and consequently the money is ])rimd facie recoverable. Where the forgery is that of the customer's name, it has been Forged held that a banker being bound to know his customer's signature and signatures, to detect an imitation of it, his not doing so is negligence, and that in such a case the banker cannot recover from an innocent person the money he has once paid him (n). This doctrine, however, has been questioned, and the basis of the cases above referred to has been slated to be the necessity of upholding negotiability (o).
1248. Where
Supreme Court of Canada Eeports, Vol. XXXV., p. 133, the Supreme Court of Canada by a majority expressly extended the doctrine to the case of a business man, not a customer, on the ground of moral and commercial oblij^ation. Special leave to appeal was refused by the Judicial Committee on the ground that no important question of law was involved, and that the question was one essentially The judgment of the Supreme for the colonial Courts (S.C., [1904] A. C. 806). Court of the United States of America in Leather Manufacturers^ Bank v. Morgan (1886), 117
U.
S. 96,
may
be consulted on this question.
{g) M'Kenzie v. British Linen Co. (1881), 6 App. Cas. 82. (h) Ogilvie v. West Australian Mortgage and Agency Corporation,
257, at p. 270, at p. 110.
and the Scotch
cases quoted in M'-Kenzie v. British
[1906] A. C.
Linen
Co., supra,
(i) Cases cited in note (h), supra. Compare K7iights v. Wifen (1870), L. E,. 5 Q. B. 660. See, however, Imperial Bank of Canada v. Bank of Hamilton, [1903] A. C, 49, at p. 57 (apparently only a dictum). (k) If notified on the last occasion when the customer or other person had knowledge of the ibr>.',ery, tlie bank might have taken steps to recover from the forger all moneys previously obtained by him. (m) Kendal v. JVood (1871), L. E. 6 Exch. 243. (n) Smith V. Mercer (1816), 6 Taunt. 76 ; Cocks v. Masterman (1829), 9 B. & C.
902
at p.
Hart 115
LiNDLEY,
v.
Frontino Gold Mining Go. (1870), L. E. 5 Exch. 1 1 1, ^er Eramwell,B., v. Anglo-American Telegraph Co. (1879), 5 Q. B. D. 188, per at p. 196 Sheffield Corporation v. Barclay, [1903] 2 K. B. 580, per
Simm
J.,
Vaughan Williams,
L.J., at p. 590.
(o) London and River Plate Bank v. Bank of Liverpool, [1896] 1 Q. B. 7. The forgery might be so adroit that detection might be impossible, and in that
