In such a case the banker becomes a substituted agent. If it is especially crossed, the payment must be specifically made to that banker, in whose favour it has been crossed. When the court issues an order of adjudication, the whole property of the insolvent person with certain exceptions vests in the court or an official receiver and becomes available for distribution among the creditors. In accepting this arrangement, the customer, by impli cation, agrees to prepare his cheques with care, i. Bankers have of course always acted honourably upon the principle of treating their cus tomers' affairs in confidence and only disclosing in exceptional and justifiable circumstances, but Tournier's case has for the first time put the obligation as a legal incident of the implied contract. Generally he returns the bill to the customer. Group heads and C-level executives can earn much more than that.
If the drawer mentions a date on the cheque, which is subsequent to the date on which it is drawn, it is called a post-dated cheque. Holt and rule in Clayton's case. Hence the practice of some banks to re quest periodical signed statements by customers as to correctness of the account. Waring and Gillow, 1926, A. Once an assignment has been made, the assignor has no legal rights over the bank balance and therefore, if any cheque is drawn by him, the banker should refuse to honour it. Hence he cannot avail of the statutory protection under Section -1289, even if he pays the cheque in accordance with the crossing. These safeguards will make fraudulent alteration difficult.
But in practice it would be a poor security were the banker, as creditor, to be subjected to the ordinary law relating to principal and surety, such as a claim for release by the surety in the event of the banker the creditor , without the assent of the guarantor, grant ing time or indulgence to the customer the principal debtor or exchanging, releasing or surrendering other concurrent securities for the same debt. New branches also will be appearing more frequently in nontraditional locations, such as inside local grocery stores or shopping malls. If the bill in question happens to be a foreign bill, the banker should have it protested and noted by a notary public and then forwarded it to the customer. Open or bearer cheques generally do not require the service from the collecting bank. Collecting a cheque payable from the company to the private account of a director or any other officer without enquiry.
A statutory will is a form that the jurisdiction has said will be an acceptable will if the blanks are filled in and properly witnessed. As to the paying banker, we have s. This is a mistake of fact regarding the identity of the parties. Statutory Protection to the collecting Banker According to sec. As to current account, although there is no debt due until demand made by the customer, Joachimson's case supra expressly reserved the appli cation of garnishee proceedings to accounts current.
The section 85 1 , 85 2 , 128 of negotiable instrument acts provide statutory protection to paying banker for making payments of order cheque, bearer cheque or crossed cheque in that order. It refers to Effects Not Cleared. Where a cheque is originally expressed to be payable to bearer, the drawee is discharged by payment in due course to the bearer thereof, notwithstanding any endorsement whether in full or in blank appearing thereon, and notwithstanding that any such endorsement purports to restrict its further negotiation. In cases where the bank has by mistake represented to a customer in his pass book that a certain balance exists and the customer in good faith acts upon that assumption and draws cheques accord ingly, the banker may be estopped from setting up the true facts, although it would have been open to correct the error before the customer, in good faith, acted upon it Holland v. You are just another customer to the bank, they don't really care.
Even to avail the protection under section 131 of the Negotiable Instrument Act, the collecting banker has to prove that the act was made without any Negligence. In the case of a checking account, the bank promises to repay the money immediately upon the presentation of a cheque. The mandate must be signed by the customer. If the bank pays a cheque which has a forged indorsement, it is under obligation to reimburse the cus tomer. In the case of partnership, companies, administrative bodies or other bodies, a particular form of signature or signatures is agreed upon as the banker's authority to pay. . As to promissory notes, a customer should remember that a a note bears interest before maturity only if so stated, b if no mention of interest is made, interest begins on the date the note becomes due and at the legal rate obtaining in that State, c notes due on Sunday fall due on Monday, d notes due on a holiday, or on Saturday when Saturday is a half holiday, fall due on the next business day.
He will be released by payment in due course. If the customer is a corporation, a partner ship, or a fiduciary, the bank will insist on having a certified copy of the resolution or by-law enabling the officers to transact the business of the corporation, or of the partnership agreement, or of the court orders and other legal papers. Thus the operation of this rule taken in conjunction with the rule in Hopkinson v. Act, if the amount undertaken or ordered to be paid is stated differently in figures and words, the amount stated in words shall be the amount undertaken or ordered to be paid. Therefore banks are not required to verify the regularity of the endorsement on the back of the cheque if any and they are protected from liability if they have made payment of an uncrossed bearer cheque to a bearer in due course.
In the case of other securities the banker has, presumably, the right of a pledgee, and after default, if notice to realise has been given, can sell the security and reimburse himself so far as possible. The banker, therefore, can not avail the statutory protection under section 85. Of necessity bankers and their customers enter into special contracts expressly or gathered by implication from course of dealing. A collecting banker is one who undertakes to collect the amount of a cheque for his customer from the paying banker. Moreover the banker requires to be in a posi tion to prove in bankruptcy, or to accept compositions in respect of, the whole amount due and owing without competition by the guarantor. Negligence means failure to exercise reasonable care.
London City and Midland Bank, 1908, 1 K. Westminster Bank, 1927, 2 K. The Federal Reserve Act de fines savings accounts as those governed by the following condi tions : I The passbook, certificate or other form of receipt must be presented to the bank when a deposit or withdrawal is made. The holder of a cheque has no claim against the drawer's banker for non-payment, since a cheque is not in English law an assignment of funds in the banker's hands Bills of Ex. Countermanding, in order to be really effective, must be in writing. And the implied general lien for balance of account is not needed where securities are specifically deposited as cover for amounts owing.