— n ^m i -J i G ( Br^^H ■ UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY ^J^ zJiy jf^ ^-^.vn MTV1 -ir ^n^ivcoi"^' m\m/^^ ■'omm\^ yvHan-iv ^m^iNv-^,m^ %?]iAi* ^3DNV-S(n^ %>nA]MT]\VN ^^■LlBRAu.,.. '^. Mackreth 30 V. Surtees 353 V. Wilson 342 Fortescue v. Barnett 162 Fortune Mining Co 409 Forwood's Claim 100 Foster v. Bank of England . . 311, 316 V. Bank of London . , 7 • Ex parte 517 V. Parker 536 Fountain's case 401, 501 Fountaine v. Carmarthen Rail. Co 33 Fowler v. Foster 547 Fowler's case 444, 503 France v. Woods 276 Frank v. Edwards 228 Franklin v. Bank of England .312 Franks, Ex parte 514 Eraser v. Jordan 211 Frith, Ex parte, Cowburn, In re 559 Frowd, Ex parte 482 Fruhling v. Schroeder 8, 116 Fry V. Russell 386 Fryer v. Ranken 2 Fuentes 1^. Montis 183 Furber, Ex parte 564 Fydell r. Clark 292 G. Gallini v. Noble 308 Gammon r. Schmoll 102 Garden v. Bruce 77 Gardner v. Lachlan 177 Garland v. Jacomb 252 Garnett Gold Mining- Co. of America v. Sutton. . 501 Mining Co. V. Sutton . 401 V. McKewan..48, 199, 246, 300, 430 V. Woodcock 103 Garrick v. Taylor 432 Gatty V. Fry 20 Gaunt V. Taylor 281 GeneralFurnishing and Uphol- stering Co. r. Venn 547 General Provident Ass. Co., In re National Bank 176 General S. American Co., In re 374, 416 General S. American Co., Ex parte 149 General S. American Co., In re. Ex parte Banco de Lima 100 Gibb V. Mather 103 PAGE Gibbs r. West 509 Giblin v. McMidlen 192 Gibson v. Minet.8, 10, 21, 114, 116 Gilbert's case 409 Gilbey, Ex parte 520, 525 Giles r. Perkins. . 141, 144, 145, 146 Gill V. Continental Gas Co. . . 442 V. GiUingham 341 Gill's case 509 Gillard v. Wise 341 Gladstone and Ottoman Bank 339 Glegg, Ex parte 522 V. Gilbey 218 Goggerly v. Guthbert 177 Gomex, Ex parte 149 Goodbody v. Foster 83 Goodwin v. Robarts 2 V. Roberts 370 Gordon, Ex parte 355 V. East India Co 161 Gordon's case 436 Gorgier v. MelviUe 370 Gosden ;-. Dotterill 308 Gough r. Da-\-ies 127, 257 V. Everard 561 Grady's case 460 Graham v. Connell . . 441, 442, 481 V. Wilcoxon 545 Grainger v. Slingsby 325 Grant v. Shaw 554, 555 — V. Vaughan 21 Gray v. Johnston 47 Green v. Bank of England .... 315 ■ v. Carhill 29 r. Wynn 216 Gregoiy v. Patchett 456 Grepe, Ex parte 520 Grey r. Kentish 522 Grigby v. Oakes 342 Grigg v. Cockney 243 Grindell v. Brendon 553 Gri.ssell's case 509 Gross, In re 190, 239 Gwaitkin r. Campbell 465 Gwyn, Ex parte 302 V. Godley 4 H. Hale v. Saloon Omnibus Co . . 547 Halford v. Cameron Coalbrook Co 33 Halifax Union v. Wheelright 18 Haley v. Hammersley 550 Hallmark's case 444 Hall, Ex parte, In re Cooper 527 XXVI TABLE OF CASES. PAGE Hall f. FuUer 18, 108 f. West 257 V. Wilcox 220 Hallett's Estate, In re 123 HaUett r. HaUett 540 Halstead v. Skelton 103 Hamilton r. Chains 559 , In re 237 Windsor Ironworks, In re 274 Hamlyn v. Betteley 560 Hammersly v. Knowlys 297 Hanunett v. Yea 303 Hampden v. Walsh 117 Hamer t'. Giles' District .... 487 Hancock v. Lablache 29 Hancon v. Allen 324 Hankins v. AVhitten 517 Hanky v. Berwick 106 Hans, Re 555 Hansard v. Robinson 357 Hanson, Ex parte 260 Harding v. \Villiams 316 Hardy v. Veasey 7 V. Woodrooffe 106 Hare r. Copland 11, 22, 101 r. Henty . .49, 51, 52, 53, 55 Harlock v. Ashberry 171 Harris, Ex parte 518, 538 V. EaAvcett 207 r. Parker 104 V. Royal British Bank 363 V. Truman 521 V. Venables 202 Harrison v. Beving-ton 283 V. Brown 476 V. Cohen 185 ■ -, Ex parte 164 , In re 139, 142, 146 Hart V. Alexander 127, 258 Hartga v. Bank of England . . 317 Hartland v. Jukes 188 Hartop r. Hoarc 183 Harvey v. Cricket 352 V. Scott 377 Harward's case 444 Harwood r. Law 382, 479 Hattersley, Ex parte 524 Hatton V. English 554 Haseltinc r. Siggers 370 Hawken v. Bourne 473 Hawker, Ex parte 564 Hawkins v. Allen 88 V. Wakond 551 V. Whitten 355 Hawse v. Crowe 82 Hawtaync r. Bourne 473 Hayman, Ex parte 523, 521 PAGE Haythorn v. Lawson 283 Haywood r. Pickering .... 52, 57 Heane r. Roberts 197 Heath v. Percival 258 Heather r. Webb 541, 542 Heaton, Ex parte 281 Hebbell, Ex parte 515 Heffield r. Meadows 206 Heming v. Clutterbuck 88 Hemming, Ex parte 541 Henderson v. Appleton 346 V. Gilchrist 349 I'. Henderson 425, 510 V. Royal British Bank 435 Hendricks v. Montague 406 Hennessy, Ex parte ,' 162 Henniker v. Wigg 221 Herefordshire Banking Co., In re 347 Herschfield v. Brown 302 Herbert v. Sayer 522 Hertford (Marquis of). In re. . 318 Heseltine v. Siggers 309 Heslop V. Bank of England . . 316 Howard v. Wheatly 440 Hewer r. Cox 553, 554 Heweson r. Guthrie 250 Hewett V. Raye 50, 88 Hewitt V. Raye 130 Higgins r. LiAangstone 273 ■ -W.Nichols 103 Higg's case 448 Hill's case 432 Hill i\ Kirkwood 552 i: Royds 110, HI V. Smith ..107, 110,242, 295 HlUs r. Parker 178 r. Shepherd 557 Hinsdale v. Bank of Orange . , 358 Hoare's case 606 Hobb's case 503 Hobson V. Bass 536 Hockley r. Bantock 168 Hodgkins, Ex parte 187 Hodgson r. Anderson ..8, 87, 114 Hogarth v. Latham 31 r. Whaley 27 Holl r. The Mercantile and Exchange Bank Limited .. 198 Holland, Ex parte 514 ■ — • r. Hodgson 550 HolUer r. Eyre 220 Holme r. Binney 477 V. Brinskill 209 Holroyd c. Whitehead 51(5, 517 Homan, Ex parte 565 Hoonian, Ex parte . 562 TABLE OF CASES. XXVU PAGE Hone V. O'Flahertie 383 Honey, Ex parte 539 Hooper, Ex parte 168 V. Keay 237, 240 Hopecraft, Ex parte 546 Hope V. Cust 30 V. lutemationalFinancial Society 406, 451, 461 Hopkin's Trust, Re 324 Hopkins v. Abbot 3 i-. Warr 49, 51 Hopkinson v. Poster 4, 115 r. Eolt 173 Hordem r. Dalton 356 Hornblower r. Proud 158 Horn V. Baker 523 Home r. Hughes 558 Homsby r. Millar 523 Hosegood V. Bull and Eing- dom : .- 469 Hotham r. Sutton 308 Hough v. May 76 Houldsw'orth r. City of Glas- gow Bank. . . . 469 V. Evans . .437, 440, 460 Howard r. Baillie 27 Howe V. Bowes 347 HoweU I', Jones 210 V. Metropolitan Rail- way 487, 488 Hudson's case 508 Hughes, In re 313 V. Spooncr 144 Hiimberstone v. Chase 318 Hiunble r. Mitchell 433 Hume V. BoUand 197, 314 Hunt, Ex parte 172 V. Peacock 323 Hunter, Ex parte 30 Husband v. Davies 30 Hutton r. Cruttwell 565 V. Scarborough Hotel Co 406 Huxtable, Ex parte 526 I. Ibbetson, Ex parte 161, 523 Imperial Anglo-German Bank, In re 513 Bank of Chma 497 Guardian, &c. So- ciety, In re 493 Land Co. of Mar- seilles, In re 485 Mercantile Credit Co., In re 511 PAGE Ingham v. Primrose . .59, 100, 112 Innes i\ Stephenson 30 International Pulp Co 415 Ii'vine V. Union Bank of Aus- tralia 274, 406, 445, 456 Irving, In re 161, 164 V. Yeitch 76 J. Jackson, In re. Ex parte Hall 565 V. Turquand 463 Jacobs, Ex parte 216 , In re 216 Jakeman v. Cook 542 James, Ex parte 517 r. Holditch 347 r. James 171 Jameson v. Bi-ick and Stone Co. 522 v. Swinton 49 Jay, Ex parte 502 Jeffryes v. Agra, and Master- man's Bank 248 Jenkins v. XJsbome 182 Johns V. Mason 89 Johnson, Ex parte, Inre United Service Co 193 V. Gallagher 28 r.Lithes Iron Agency 462 V. Lyonnais Co. 181, 182 !•. Newton 276 V. Robarts 136, 242 Johnston v. Renton 434 Jombert r. WooUet 146, 152 Jones, V. Arthur 43 Ex parte 515 , Ex parte, In re Grissel. . 514 V. Gibbons 162 V. Harber 185 V. Harris 553, 554 V. Peppercorn. . 244, 248, 370 p. Ryde 302 Joy v. Campbell 200 K. Karet r. Kosher Meat Supply 558 Keane v. Robarts 281 Kearney v. King 16 Kearsley r. Cole 216 Keene's Executors' case . .453, 505 Keene r. Beard 22, 84, 85, 87 Keith V. Biu-rows 186 Kellock's case 100 Kellsall r. Marshall 420 Kelly, Ex parte 528 XXVIH TABLE OF CASES. PAGE Kelner r. Baxter 27 Kelsby v. Williams 54 Kendall v. Hamilton 250 ■ v. Kendall 308 Kensington, Ex parte 189 Kerwan r. Kerwan 257 Kevan, Ex parte 528 Keys, Ex parte 355, 517 r. Williams 168 Kibble, Ex parte 519 IviddUl r. Farnell 313 Kilner, Ex parte 564, 565 Kincard's case 444 King V. Bradley 4 V. Zimmerman 89 King's Cross Industrial Dwel- lings Co., In re 493 Kingston, Ex parte. .239, 279, 621 , Ex parte, In re Gross 122 Kinirerly v. Hosack 540 Kinnaird r. Webster 208, 237, 244 Kirk r. Bell 449 r. Blurton 30,31,252 Kish r. Central KaU. Co. of Venezuela 506 Knott, In re 560 Knowles' Mortgage 415 Kymer v. Laurie 45, 107 La Banca Nazionale Scde di Torino r. Hamburger .... 427 Lacey r. Hill 254, 538 Lacou v. Allen 168 V. Liffen 187 Ladbuiy, Ex parte 522 Laing i\ Campbell 237 Lake r. Gibson 312 Lamb v. Attenborough 182 r. Bruce 555 Lambton, Ex parte 149 Lancaster Banking Corpora- tion, Ex parte 543 Land Credit of Ireland v. Fer- moy 456 Lanesborough v. Jones 540 Langdalc r. ■S\niitfield 3 Langford, In re 309 Langton r. Ilorton 171, 187 r. Waite 316 Lanj-on v. Smith 401 La Touche r. La Toucho .... 221 Latta, y.x parte 513 La Vie v. I'hillips 514 Law, Ex parte 540 PAGE Law V. Pamell 467 V. Thompson 466 Laws V. Rand 49 Lawson v. Bank of London . . 408 Layton v. Horton 187 Lazarus v. Andrade 548 Leadbitter v. Farrow 27 Leask r. Scott 179 Leathley v. Spyer 216 Lee V. Glutton , 175 V. Sankoy 279 V. Stewart 30 Leeds Bank, Ex parte 147 Banking Co., In re ... . 437 , Ex parte Prange 113 Leese v. Martin 244, 246 Le Fanu v. Malcolmson 283 Leftley r. MUls 60 Leifchild's case 506 Leslie, Ex parte 534 Letts V. Morris 114 Levy V. Walker 172 Lewis, Ex parte 562 V. Leonard 542 Lichfield Union v. Greene . . 39, 234, 348 Lickbarrow v. Mason 179 Lilly V. Hays 8, 116 Lindsay v. Cundy 522 Lindus v. Melrose 414 Lingham v. Biggs 523 Liquidators of Overend, Gur- ney & Co. v. Liquidators of Oriental Financial Corpora- tion 213 Lister v. Payne 185 Little r. Slackford 13 Liverpool Borough Bank v. Mellor 394 Lloyd, Ex parte 169 V. Pugh 28, 29 V. Sandilands 74 Lloyds V. Harper 207, 227 Locke V. Prescott 247 Lodge r. Dicas 257 Lomax r. Buxton 185, 565 V. Hyde 172 London, Bombay, &c. Bank, In re 297 and Medi- teiTanean Bank, In re. .438, 505 r. NaiTaway . 294 London Cliartered Bank of Australia I'. Lempriore 29 V. Wliite 244 London and County Bank, Ex parte.. 527 TABLE OF CASES. XXIX PAGE London and County Banking Co. v. Groorae . . 59 r. Ratcliffe 173 London and Eastern Banking Corporation, In re . . 286 , Hamburg and Conti- nental Exchange Bank . .455, 508 London and Mediterranean Bank, In re 460, 461 Mercantile Discount Co., In re 497 and North Western Rail. Co. V. Whinray 228 and Provincial Coal Co. 460 — — Telegraph Co. 409, 437 London and Westminster Loan, &c. Co. V. Chase 554 Longbottom v. Berry .... 170, 550 Longman v. Pole 254 Longworth, Ex parte 386 Loughnan v. Barry 82 Lovell V. Newton 29 Levering, Ex parte 524 Lowrey v. Barker 522 Loyd V. Freshfield 4 Luard's case 438, 505 Lucas V. Dicker 525 ■ V. Dorrein 249 I'. Wilkinson 179 Lumley v. Timms 29 Lynch, Ex parte 615 V. Fitzgerald 266 Lyons r. Tucker 557 Lysaght v. Walker 235, 238 Lyth V. Ault 128, 257 M. McArdly v. Irish Iodine Co. . . 449 M'Cue v. James ; . 555 McClean v. Kennard 256 McDonnell r. Murray .... 19, 357 McDowell V. Dogle 477 McGowan v. Dyer 469 t;. Smith 114 McGrath v. Gray 216 McHaltie, Ex parte 555 Mclntyre v. Connell 443, 481 ■ V. Miller 475 McKenna, Ex parte 249 V. Eolt 477 McKewan's case 406 Mackay, Ex parte 546 V. Commercial Bank of New Brunswick 469 Mackenzie, Ex parte 554 Mackersay v. Ramsay 134 PAGE Mackintosh v. Haydon . . 105, 106 Madrid Bank v. Bailey 463 Maguire's case 436 Mahoney v. Donovan 342 V. East Holyford Mining Co 33, 34, 448, 449 Maingay r. Lewis 209 Maitland r. The Chartered Mercantile Bank of India, London and China 96, 98, 99 Malcolm r. Scott 4 Manchester and Liverpool Bank, Ex parte 518 Manchester Bank, Ex parte . . 533 Manchester and County Bank, Ex parte 538 Manchester and County Bank, In re 244,249 Manley v. Boycott 220 Manning t\ Purchell 3 v. Westeme 238 Manningford v. Toleman .... 246 Mansfield, Ex parte 503 Mapleback, Re 534 Mare r. Charles 27 Marquis of Abercom's case . . 445 Marsden v. Meadows 545 Marsh v. Houlditch 297 r. Keating 253 Marshall v. Crutwell 28 Marstead v. Paine 434 Martin, Ex parte 521 «'. Read 184 Marzelli i\ Williams 45 Massey, Ex parte 136, 242, 243 Master r. MiUer 105 Mastei-man r. Cowrie ........ 303 Masters v. Baretto 113 Mather v. Eraser 550 Mathew v. Sherwell 62 Mathewman's case 437, 504 Mathews v. Brise 276 Mathewson's case 28 Mathieson v. London and County Bank 71 Matthews, Ex parte 528 Maude, Ex parte 638 Maxfield v. Burton 175, 246 Maxwell's case 406 Mayhew's case 436 Mayo's (Lady) case 317 Mayor r. Johnson 358 Maj'or of London v. London Joint Stock Bank 487, 488 Mead, In re 130 Mcaux r. Jacobs 548 Meek v. Baylis 168 V. Wallis 207 XXX TABLE OF CASES. PAGE Mellershr. Kean 256 Mellish r. Simeon 374 Melville i: Doidge 225 Meuzics v. Lightfoot 173 Merchiint Banking Co. v. Phcfinix Bessemer Steel Co. 179 Merchant Banking Co. of London r. Merchant Joint Stock Bank 408 Merchants Bank of London v. Maude 213 Metcalfe r. Bruin 223, 224 Metropolitan Counties Co. r. Brown 550 Meux's case 454 Meux V. Jacobs 169, 170 Meyer, Ex parte 517 Middleton v. Barned 293 Midland Banking Co. , Ex parte 206 Midland Ins. Co. r. Smith. . . . 232 Midland Rail. Co. v. Chalmers 536 • V. Taylor . , 314 Miles V. Williams 522 Miller's case 444 Miller v. Austen 130 r. Race 356 r. Thompson 467 MOls V. Alderbury L^nion .... 234 z'. Bennett 517 V. Oddy 77 Milnes r. Dawson ,*. . 88 Misa r. Cun-ie 244, 249 Mitchell's case 13 Mitford V. Mitford 522 Mittam, In re 324, 32o Moffat V. Farquluir 409, 457 Moore v. Barthrup 76 V. Bushel! Ill, 137 V. Greg 171 (Sii" John) r. Gold Mining Co 600 r. Lister Banking Co. . 130 Moore's Co., Ex parte 171 Morewood r. S. Yorkshire Rail. and River Dun Co 555 Morgan v. Lari%ai;i"e 116 ■ — V. Morgan 352 Morier, Ex parte 540 Morley v. Bird 312 ■ V. Culverwell 59 Morrcll v. Cowan 206 V. Woottcn 114 Morrisse v. The Royal British Bank 385 Mortimer r. McCallau 316 Mortlock, E.V parte. In re Bashara' 562 Mortou c. Woods 547, 552 PAGE Moscow Gas Co. r. Interna- tional Financial Co 419 Mosse r. Salt 6, 198, 200, 201 Moule V. Brown 50, 52 Mountford v. Harper 74 Mountfort, Ex parte 168 Moyser v. Whitaker 60 Muchlow V. May 517 Muir V. City of Glasgow Bank 506 V. Crawford 209 Mumford r. Stowasser 175 Murray r. Bush 436, 453 V. Ellibank 522 r. Judah 43 V. Mackenzie 554 V. Pinkett 247 Murrow v. Stuart 200 Mutrie, Ex parte 516 Mutton, Ex parte 563 Muttylol Seal v. Dent 130, 295 Myers v. Perigal 431 N. Naoroji v. Bank of India .... 540 • V. Chartered Bank of India 294 National Bank, Ex parte 416, 450, 536 of America v. Bangs .... 57 of St. Charles v. De Ber- nales 427 of the Repub- lic r. Millard 87 National Mercantile Bank, Ex parte 550, 553, 555, 559, 560 National Mercantile Bank v. Hampson 564 National Permanent Benefit Building Society 273 Native Iron Ore Co 416 Naylor v. Mortuner 307 Ncodham v. Law 478 Ness, Ex parte 382 V. Angas 436, 438 V. Armstrong 436 v. Bertram 436 Newitt, Ex parte. In re Gar- rard 54 7 Newton, Ex parte. In reRees . 537 New Zealand Bank, In re 149 Nichol, Ex parte 433 Niclujlsou r. Ricketts 30 Nicol's case 159 Nicoll.'j V. Rosewame 443 TABLE OF CASES. XXXI PAGK Nightingale v. Devisme 308 Noble r. Adams 82 ('. Bank of England 357 North British Insm-ance Co. v. Lloyd 212 North V. Wakefield 216 Northampton Coal Co. v. Mid- land Waggon Co 419 Northumberland and Durham District Banking Co., Ex parte Totty 499 Northumberland and Durham District Banking Co., In re 394, 494, 497 North-WestemBank, Exparte 182, 548 Norton v, Ellam 360 V. Seymour 31 Novelli r. Rossi 106, 1 11 O. Oakes, Ex parte 189 V. Turquand . .410, 433, 506 O'Connor v. Marjoribanks .... 246 Odell, Ex pai-te 545 Offord V. Davis 207 O'Flaherty v. McDowell .... 422 Ogden V. Benas 23 Ogg V. Shuter 179 Okell V. Charles 414 Orielly v. Richardson 301 Oriental Commercial Bank, In re 507,508,539 Orr V. Union Bank of Scot- land 18, 94 Other V. Iveson 73 OurseU, Ex parte 139 Overend, Gui-ney & Co. v. Gibb 450 . r. Oriental Financial Corporation . .209, 211 Page V. Young 3 Pannell v. Harley 247 Paris V. Paris 324 Parker, Re 559 • r. Gordon 49, 103 V. Marchant 2 Parks V. Edge 104 Parrot v. Eyre 273 Parry v. Nicholson 112 Partridge r.'Coates 72 Pascal, Ex parte, Myer, In re . 515 Patent File Co 416 PAGE Patent File Co., In re, Ex parte Birmingham Banking Co. . . 176 Paterson r. Ironside . . . .477, 479 Pattison v. Bedford Union . . 235 Pauli, Ex parte 151 Payne, Ex parte 185, 550, 564 , Ex parte. In re Cross . . 549 — V. Fern 564 Paynter v. Houston 258 Pearce v. Creswick 126, 127 V. Davis 77 Pearse r. Pemberthy 113 Pease, Exparte. .145, 147, 148, 153 V. Hirst 189, 292 Peate v. Crane 324 Redder r. Preston 239, 540 V. Watts 118 Peek V. Gurney . , , 451, 460 Peele, Ex parte 259 PeUatt's case 503 Peltz V. Cooke 218 Pemberton v. Chapman 280 v. Oakes 203 Pender v. Lushington 457 PenneU ?'. Deffel ..,.123,237,279 Penney, Ex parte 434 Penny, Ex parte 457 People's Garden Co 494 Perring v. Dunston 330, 383 Perwarden r. Roberts 552 Pettit's Estate, In re 543 PhilliiJS, In re 650 V. Eastwood 308 V. Foxall 208, 228 r. Gibbons 545 Pliilpot V. Bryant 106 Philps r. Homstedt 185 Phipps V. Tanner 17 Phosphate of Lime Co. v. Green 456, 460 Picard v. Breby 554 V. Man-iage 554, 562 Pickering v. Busk 469 Pierson v. Pounteys 16 Pigot V. Chubley 183 Pike V. Fitzgibbon 28 Pillars, Ex parte, re Curtoys . 525 Pinkett v. Wright 457 Pinto V. Santos 87, 115 Pitcher v. Rawlins 175 Pitman, In re, Edwards, Ex parte 274 Plummer v. Gregory 254 Poeklington v Sylvester 50 Polak V. Everitt 209 Polhill V. Walter 301 , 302 PoUard v. Bank of England ..43,57, 110 XXXll TABLE OF CASES. PAGE PoUard r. Ogden 105, 297 Polyglass V. Oliver 342 Pond V. Underwood 26 Poole V. Middleton 457 Pophara V. Lady Aylesbuiy . . 342 Pothoniei" r. Dawson 183 Pottr. Clegg 4, 130 Poulson, Ex parte 539 Powell, Ex parte 523 , In re 2 Powels V. Page 451 Powis V. Butler 386 Powles r. Page 380 Prelin v. Liverpool Bank. . 100, 374 Prescott, Ex parte 510 ■ V. Biiffery 378 1'. Plinn 27 Price, Ex parte 169 V. Edmunds 220 V. Great Western Rail. Co 370 Prid, Ex parte, re Lankester. . 540 Prideaiix r. Creddle 52, 57 Prince v. Oriental Bank . . 106, 199, 246, 300, 429 Pritcliard, In re 487 Prosser v. Bank of England . . 310 r. Wagner 26 Pryce, Re 164 Pugh's case 437 Puller V. Roe 255 Punnett, Ex parte 534 R. R. V. Aspinall 459, 462, 483 — V. Ckristoi^her 359 — V. Giles 363 — V. Mildcnhall Savings Bank 2C6 — V. Moore 359 — v. Norwich Savings Bank. . 266 — V. Skeen 484 — r. Witham Savings Bank. . 266 — V. WooUey 365 Rai Sri Kishen v. Rai Huri Kishcn 426 Rainbow v. Juggins 214 Rainev, In re 515 Ram, Ex parte 323 RanichurnMidlicki'.Luchmee- chund Radakissen 35 Rainsdeu r. Brcarley 514 V. Luptou 5G3 Ranco's case 411 Randall v. Trimen 27 Raudleson, Ex parte 197, 242 Ranaford v. Bosanquet 381 PAGE Ransford v. Maule 517 Paper v. Birkbeck 106, 112 Raphael v. Bank of England. . 356, 360 RasteU v. Draper 16 RatclifPe r. Barnard 175 Rawley v. Rawley 540 Redmayne v. Burton 89, 357 Reed v". Bailey 254 Reese Silver Mining Co. v. Smith 503 Reg. V. Adams 489 V. Ashby 93 V. Atkinson 131, 481 r. Autey 91 V. Boreham 17 i: Burch 484 V. Carter 377 V. Clark 364 r. Cooke 362 V. Dixon 357 V. Esdaile 483 V. Essex 91 r. Evans 364 V. Fletcher 271 V. Foulkes 230 r. Garrett 99, 132 V. Ilarley 92 V. Harper 92 V. Ilayleton 91 i'. Inhabitants of the Pa- rish of Lee ....171,550 V. Ion 131 V. Jessop 365 V. Johnston 131 v. Martin 92 V. Moody 198 V. Murtagh 367 V. Negus 230 V. Preston 359 V. Prince 91 t;. Pritchard 481 V. Roberts 132 V. Skeen 289 V. Smith 198 V. Taylor 92 V. Thurbom 359 r. Turpin 92 V. Walne 90 V. Ward 489 - V. Warden 92 V. Watts 72, 73 V. AVest 363 V. Williams 91 V. Wilson 91 V. Wilton ■ 95 Rohden r. AV^eslcy 276 Rcusburg, Ex parte 523 TABLE OF CASES. XXXlll PAGE Rex i\ Backler 93 v. Bank of England .... 311 V. Capper 307 V. Cheadles Savings Bank 266 — I'.EUor 12 r. Flint 364 1\ Gade 310 «'. Gordon 316 V. Jackson 90 • V. James 377 • V. McKeay 362 r. Mead 357 t\ Palmer 363 v. Parker 90 V. Polman 123 V. Spencer 36-1 v. Wait 313 V.Walsh 91 i'. Wavell 90 V. WyUe 363 Reynolds v. Chettle 54 Rhode r. Proctor 536 Rhodes, Ex parte 505 Richards v. Heathers 255 . r. James 557 V. Macey 292 Richardson, Ex parte 164 Ex parte, Re Har- ris 522 r. Bradshaw .... 514 r. Williamson.. 274, 275 Richdale, Ex parte, In re Pal- mer 525 Richmond r. Heapy 255 Rickett V. Bennett 261 Riddle, Ex parte 270 Ridley v. Blackett 80 Rigby, Ex parte 26 Riskford r. Ridge 52 Robarts v. Tucker 53 Roberts v. Eden 178 • V. Evans 29 Robertson & She ward 467 ■ V. Kensington 299 Robinson, Ex parte 453, 510 . V. Briggs 562 V. Chartered Bank of India 434, 457 r. CoUing^vood . .556, 557 . v. Hawksford 49 V. Marchant 283 r. Pickering 28 . r. Preston 312 . V. Ward 278 V. Yarrow 27 Robson V. Bennet 52, 53 I', Great Eastern Rail. Co 524 G. PAGE Robson V. Oliver 61, 348 Rodgerson r. Ladbrook 298 Roe r. Bradshaw 556 r. Fiillar 478 Roger v. Comptoir d'Escompte de Paris 179 Rogers, Ex parte. . . . 354, 518, 537 In re 370 ■ V. Kelly 226 i'. Langford 346, 348 Rolin /•. Steward 45, 46 Rolls V. Pearce 85, 88 Rolph, Ex parte. In re Spind- ler 569, 560 Rose V. Garden Lodge Co. . . 494 Rossiter r. Miller 202 Rothschild v. Corney 58 Rouch V. Great Western Rail. Co 524 Routh V. Roiiblct 554 Row v. Dawson 115 Rowe r. Young 102 Rowneugi". Bank of England. . 356 Rowning v. Goodchild 356 Rowton, Ex parte 154 Royal British Bank r. Tur- quand 33, 274, 437, 445 RumbaU c. Metropohtan Bank 249, 370 Russell, Ex parte, In re But- terworth 526 1'. Hankey 80 Ryder, Ex parte 295 S. Sadler, Ex parte 522 r. Belcher '. 159, 160 V. Lee 120, 281 Salfery, Ex parte 563 Saffron Waldi-on Building Society v. Raj-ner 175 St. Aubyn r. Smart 254 Samble v. Wilson 171 Sanderson v. Anderson 208 ?'. Piper 16 Sands v. Clark 113, 347 Sargeant, Ex parte . . 139, 141, 144 Sargent, Ex parte . . 147, 148, 432 Saul r. Jones 103, 106 Saimderson v. Aston 209, 228 V. Bowes 347 r. Jackson 25 r. Judge 104,113 Savage v. Aldren 299 Sayer r. Wagstaff 41 C ixxiv TABLE OF CASES. PAGE Scarsbrick's case 438 Scholej' r. Kamsbottoin 59 Schroeder v. Central Bank of London 5, 115 Schulte, Ex parte 625 Scott i'. Dixon 433 and Franklin 250 r. Porcher 116 • r. Surman 139, 151 Scottish and Universal Finance Bank, Limited, In re 448 Seal r. Claridge 552, 562 Sebag V. Abidol 107 Selby V. Eden 103 V. Graves 295 Serle i-. Norton 49, 85 Serrell v. Derbyshire, «S:c. Rail. Co 25, 33, 58 Se\-mour v. Brecon Corpora- tion 487 Shackelford and Co. r. Danger- field . . . ." 408 Sharpe r. Birch 553 Shaw V. Dartnall 197 f. Foster 168 V. Picton 197 Shears v. Jacob 554, 556 Sheen, Ex parte 538 • , , In re Win- stanley 565 Sheffield and Hallamshire, &c. Society 401 Shepherd, JJx parte 519 , Ex parte 518, 519 Sheppard v. Dry 31 Shillibeeri'. GljTi 10 Ship's case 448 Shipton V. Casson 341 Shortridge v. Bosauquct .... 379 Shropshire L^uiou Railway and Canal Co. v. The Queen .. 165, 166, 167 Sibree r. Tnpp 130 Sigouniey r. Lloyd 300 Sillitoe, Ex parte 538 SimnioLs v. Taylor 60 Simpson, Ex parte 308 , In re 256 ('. Chapman 256 V. Egginton 109 ' >'. Sikes 354 f. Westminster Palace Hotel Co 447 Sims V. Bond 32 r. Bnitton 121 Simson r. Ingham 237, 238 Sinclair r. Wilson 179, 528 Skelton r. Braithwaitc lOG PAGE Skillet c. Fletcher 224 Skyring v. Greenwood 197 Sladden r. Sargent 556 Slee r. International Bank . . 457 Sleech's case 255 Sloman v. Bank of England. .312, 314 Smale v. Burr 563 Smallcombe v. Evans 460 Smart, Ex parte 136 Smith, Ex parte 152, 173, 189, 190, 237 V. Abbot 106 V. Butler 2 V. Chase 555 r. Craven 109 v. Everett 256, 331 V. Ferrand 42 , Knight & Co., Inre. . 496 r. Leveaux 4 r. Lucas 28 V. Mercer 39, 107, 108 r. Munday 357 «'. Pilgrim 527 V. Thatcher 113 V. Union Bank of Lon- don 67 t'. Vertue 106 r. WaU 561 Snead r. Williams 198 Sneezum, In re 522 Snell's case 456, 460 Snowball, Ex parte 252, 524 Snowdon, Ex parte 536 Soares v. Glyn 299 Solomons r. Bank of England 355 Somerset v. Cox 247 Somes V. Hallam 525 South, Ex parte 114 Durham Iron Co., In re 416 Southam, Ex parte 556 Spackman v. Evans 445, 460 Spalding «;. Ruding 179 Sparrow v. Carruthers 514 Silencer c. Clarke .. 162, 163, 164, 175 V. Slater 516 Spiller r. Johnson 475 Spindler, In re 559, 560 f. Grellet 113 Spincer v. Spinccr 82 Spraguo, Ex parte 523 Sprout v. Matthews 105 Sprowle r. King 16 Stackhouse v. The Countess of Jersey 246 Staddon, Ex parte 156, 354 TABLE OF CASES. sxxv PAGE Stagg V. Elliot 301, 466 Stammers v. Elliot 540 Stanhope's case 460 Stapleton, Ex parte 179 ■ r. Hayman 187 r. Stapletou 125 Starrey v. Bams 294 Stevens, Ex parte 564 V. HiU 53 ■ V. Masterman 10 Stevenson, Ex parte 501 I'. Wood 527 Steward, Ex parte 247 ■ V. Dunn 379, 478 V. Greaves 475 Stewart, Ex parte, In re Shel- ley 165 V. Fry 8, 110 !. Gladstone 172 v. Lee 63, 64, 65 Stockton Iron Furnace Co. . . 552 Stone v. City and County Bank 433, 506 r. Compton 213 r. Marsh 30, 279 Stoveld V. Eade 238 Stracy v. Bank of England . . 314 Strange v. Lee 203, 223 Stranton Iron Co 457 Stray v. Russell 434 Stright, Ex parte 164 Stringer's case 411 Strong V. Foster 220, 536 Stuart r. Cawse 76 ■ V. Earl of Bute 3 Stubbs V. Lister 462 Stubbins, Ex parte 527, 528 Stein V. Richardson 3 Sturtevant v. Forde 58 Suche, In re 100 Suffell V. Bank of England . . Add. xxxviii Summers r. City of London Bank 29, 48 Suse V. Ponipe 374 Sutton !■. Bank of England . . 311 V. Bath 555 v. North British Aus- tralasian Co 18 V. Steele 257 V. Toomer 60 Swan, Ex parte 13, 537 Swift V. Winterbotham. . 380, 449, 469, 471 Swire v. Redman 210 Syke's case 411 Symonds, Ex parte 527 Symons v. Mulkem . .Ad.L xxxviii T. PAGE Talbot v. Frere 1 76, 183 Tate r. HUbert 50, 85, 88 Tatlock r. Harris 257 Tatton, Ex parte 530 Taylor v. Dobbins 25 v. Eckersley 523 r. M'Keand 564 r. riuinmer 521 r. Scrivens 89 v. Stray 434 Teasdale's case 408 Tebb r. Hodge 169, 170, 172 Tempest, Ex parte 527 Tennyson, Ex parte 161 Thacker r. Hardy 117 Tharp, In re 29 Thayer v. Lister 372 Thomas v. Atherton 252, 254 V. Desagnes 524 r. Patent Lionite Co. . . 100 Thompson, Ex parte 149 V. Barrett 545 V. Bell 469 ■ V. Bennet 29 • V. Giles 139, 141, 284, 291 r. Harding 280 r. Percival 257 V. Pitman 75 r.Simpson 111,136,373 Thomson v. Freeman 527 Thornton v. McKewan 536 Thorpe v. Brown 553 Threlfalr. Giles 158 ThrelfaU, In re 534 Tidmarsh r. Grover 105 Tiley r. Courtier 43, 366 Timmis v. Gibbins 346, 349 Todd, Ex parte 537 V. Wright 475, 479 Tomkins «'. Ashby 125 Topham, Ex parte 527 Toulmin v. Copland 258 Towgood, Ex parte 147 Towne r. London and Limerick Steamship Co 418 Townley v. Sherbounie 280 Trethowan, In re 169 Tucker v. Robarts 108 Tunbridge r. Cord 312 Turner r. Cameron 550 v. Stones 343 Tumey r. Dodwell 76 Turquand v. Fearon 115 V. Kirby 441, 498 r. Marshall 447 Tutou V. Sanoner 555 XXX VI TABLE OF CASES. PAGE Tweedy, Ex parte 169 . , in re Trethowan 549 Twogood, Ex parte 540 Twyne's case 516 — 526 U. Ulster Bank v. Synnott . . 118, 301 Union Bank of Canada v. Cole 97 of London r. Lenanton 187, 547 of Manchester, Ex parte 164, 432, 513, 514 University of Cambridge v. Baldwin 234 Vaisey v. Reynolds 3 Van Wort v. WooUey . . 8, 1 18, 346 Vance v. Lowther 14 Vanderdonckt i\ Thellusson . . 113 Vanderzee v. Willis 183, 245 Vaughan r. Halliday 149 Venezuela Rail. Co. r.Kisch. . 433 Vere v. Ashby 259 Vernon v. Hankey 61, 62, 78 Vickers r. Cowell 190 V. Hertz 181 Villars, Ex parte 517 Vulliamy r. Noble 121, 540 Vyner r. Hopkins 211 W. Wade's case 41 Wadsworth v. Pickles 542 • )'. Queen of Spain 489 Wainwright, Ex parte 543 Wakefield Bank, Ex parte . . 147, 153, 291 Walker's case 460 Walker v. Guarantee Associa- tion ....226,270,271 V. McDowall 422 f. Rostron 10, 114, 116 r. Symonds 279 Walsh r. Glad.stone 88 Walton, Ex parte 434, 522 Walwyn v. St. Quentin 218 Ward's case 503 Ward, Ex parte 524 t'. Evans 42 c. Greenland 473 f. Peck 187 PAGE Ward r. Smith 283 Waring, Ex parte .. 5, 136, 149, 430 Warrington r. Early 113 Warwick v. Noakes 374 ■ V. Rogers 53, 85 Waterton r. Sharp 274 Watkin v. CampbeU 292 Watkins, Ex parte 523 Watson's case 513, 516 Watson, Ex parte, Re Love . . 548 , Re Roberts. . 543 r. Ealcs 436 V. Russell 83, 84 Watts V. Christie 5, 79, 249 V. Jefferies 81 r. Porter 174 V. Watts 318 Way V. Bassett 125, 129 Webb V. Whiffin 507, 508 Webster v. Power 551 Wedderburn r. Wedderburn. . 256 Wedlake r. Hmiey 8 Weeks r. Propert 275 Wegersloffe r. Keene .....-.,. 43 Weinholt v. Spetta 82 Weir c. BeU 451 Wells r. Abrahams 232 Went worth v. Outhwaite .... 179 West of England Bank v. Bat- ch elor 115 West of England Bank, In re . 522 West Riding Union Banking Co., Li re 518 Westboume Grove Drapery Co., In re 100 Weston's case 409 Weston r. Barton 203 Whistler r. Eorster 84 Whitaker v. Bank of England 45, 103, 306 Whitbread, Ex parte 168 Whitehouse, In re 509 Wlaitfield v. Lord Despencer, . 356 Whitnash r. George 226 Whittaker, Ex parte 522 Whtting, In re 115 Whitworth, Ex parte 221 v. Gaugain 174 Wicks, Ex parte 522 Wigau r. Eowler 383 Wiiby r. Warren 43 Wilcoxon V. Searby 556 Wildmau, Ex parte 537 i: Wildman 308 Wildes V. Groom 278 Wilkins v. Jadis 103 Wilkinson v. Godfrey 82 ADDENDA. Page 246. To note (Ii), add ^^ Symonsv.Mulkern, Weekly Notes, June I7th, p. 94." Page 365. Altering Number of Bank Xote. — Such an alteration, though it does not vary the contract, is material in the sense of altering the note in an essential part, and therefore vitiates it even in the hands of an innocent holder. Siiffell v. Bank of England, Weekly Notes, May 6th, 1882, p. 63. TABLE OF CASES. XXXVH PAGE Wilkinson v. Henderson .... 25.5 Williams, Ex parte, In re Thorap.son 552 , In re 244 — V. Davies 28 V. Deacon 9 r. Evans 169 V. Everett 8, 114, 116 r. Griffith 237, 242 V. Rawlinson 237 r. Smith 351 ;•. Waring 113 Williamson r. Williamson. . . . 201 Willis r. Bank of England . . 59, 306, 356, 366 r. Flasket 308 V. Sutherland 476 Wilmot r. Pike 162 Wilson, Ex parte 514 r. Balfour 161 r. Barthropp 301 V. Craven . . 218, 223, 224, 476 V. Herst 238 V. Lloyd 209 V. Tooker 184 V. WaUain 522 V. Wilson 186 Wiltshalge v. Da^■idge 16 Winch V. Eenn 302 Wingfield, Ex parte 524 Winter, Ex parte 527 Wintle V. Crowther 31 Wirth V. Austin 62, 86 Wisconsin Marine Co. Bank t'. Bank of British North America 137 Withemsea Brick Works Co., In re 100 Witt r. Steere 324 PAGE Wood, In re 564 V. Priestner 206 Woodbridge v. Swann 352 Woodgate v. Godfrey 545 Woodhams r. Anglo -Austra- lian and Universal Life As- surance Co 130 Woodland i\ Feare . .306, 346, 430 Woods r. Thiedemann 118 Wookey v. Pole 177, 367 Wright, In re 185 r. Laing 242 I'. Pitt 171 V. Reed 342 r. RusseU 223 Wullf i'. Jay 215 Wj-down's case 617 Wylde v. Radford 245 Wynn HaU Coal Co 415 Wynne v. Hughes 202 Y. Yglesias v. Mercantile Plate Bank Ill Yorkshire Banking Company r. Beatson 31 Young V. Bank of Bengal . . 145, 294, 640 V. Grote 17 V. Kitchin 115 V. Young 175 Yrisari v. Clement 370 Z. Zinck f . Walker 14G, 245 O. TREATISE ON THE LAW RELATING TO iankrfj iniir §attImT0 C0ntj^ii:mt^. CHAPTER I. THE RELATION BETWEEN BANKER AND CUSTOMER. The ordinary relation between banker and customer is this : the customer opens an account with the banker by paying a sum of money into the bank, the banker under- taking to hold himself liable for the payment of a like sum to the customer's use, either paying interest on the money or not, as the coui'se of business of the bank or the special arrangements between the banker and the individual customer may be, and also agreeing to honom- or cash any chec^ues, or orders for the payment of any sums of money, which the customer may send to him, diuing business hours, to the extent of the sum deposited. A less ordinary, but still a not uncommon, relation be- tween banker and customer is, that the banker makes advances to the customer or allows him to overdraw his account, charging interest on the advances, and in most cases requiring a deposit of securities, or obtaining the guaranty of some third person, for the repayment of such advances, with interest ; and whilst such accommodation continues the former relation of the parties is of course inverted. THE RELATION BETWEEN BANKER AND CUSTOMER. But neitlier of these relations partakes of a fiduciary cliaracter, nor bears analogy to the relation between prin- cipal and factor or agent, who is a quasi trustee for the principal with respect to the particular matter for which he was appointed factor or agent. Money paid into a hank ceases altogether to he the money of the person paying it in ; it ia the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it {a) . To all intents, it is the money of the banker to do as he may please with ; though it is true that, in a popular sense, it is spoken of as "my money at my banker's;" "my balance at my banker's;" and though no one can doubt that in ordinary language the term " ready money" includes the speaker's balance at his banker's. Accordingly, there are many decisions construing phrases occurring in wills, of this description, to carry sums stand- ing in a banker's books to the credit of the testator. This, looking at all the terms of a will, has been held to be the extent of a bequest of " all my ready money" {h). So, under the words " ready money," a sum in a savings bank was held to pass in a will (c). " To my wife all my ready money at my bankers, in my dwelling-house or elsewhere," pass cash balances in the hands of the tes- tator's banker, and of his agent [d). But money in the hands of his salesmaster in Smithfiold does not pass under "all his ready money and securities for money," there being no evidence that the salesmaster acted as the testator's banker (c) . Money at a banker's, placed to the trade account of a (r?) Fold/ V. mil, 2 H. L. Cas. 36 ; sec Goodwin v. Roharts, L. R., 10 Exch. p. 351. (i) Parker v. Marchant, 1 Ph. 3oG. Ic) In re Fouell, Johns. 49 ; 5 Jur., N. S. 331. (rf) Fn/cr V. Jiaii/ceii, 11 Sim. 55. (r) Smith v. Biitkr, 3 J. & L. 5G5 ; Dc Bochucfc v. lord Cloiiciirri/, 5 Ir. R., Eq. r>88. THE RELATION BETWEEN BANKER AND CUSTOMER. trader, lias been construed to pass in Lis will under " all my stock in trade" (/). Or the balance in a testator's favour at his bankers may be included under the expression " all the debts due to me," and pass accordingly (g). Or the balance at a banker's may pass as " money in hand" {h). So the balances at a testator's banker's upon a current account, and also upon a deposit account, where deposit notes or vouchers were given by the banker as a security for the money, the balance carrying interest and considered as money at the disposal of the depositor, and as readily accessible by him as money in an ordinary account cui'rent, were both held to pass under " all my moneys" (/). And under a gift of a testator's " ready money," two sums of money at his banker's, one on a drawing account, and the other on deposit, for which no notice of withdrawal was necessary, will pass (J). A gift " of any small balance remaining in the bank after payment of my funeral expenses," passed the whole balance possessed by the testator at the time of his death, though such balance had increased from 480/. to over 1,301/. (/.•). Effects consisting partly of cash and partly of money, held by a banker on deposit notes, pass by a bequest of all the residue of a testator's moneys (/). But still the legal relation of banker and customer, in their ordinary dealings in money, is purely and simply that of debtor and creditor respectively. Money paid into a banker's is merely a common law debt, and there is (/) Stuart V. Earl of Bute, 3 Ves. 217. (//) CcrvY. Carr, 1 Mer. 541, n. (A) Vaiseij v. lieipiolds, 5 Russ. 12. (j) Manning v. PurcheU, 2 Sm. & G. 292 ; affirmed on appeal, 7 De G-., Mac. & G. 55. " Secuiities for money," on the other hand, -R-ould not ■Dass money at a banker's on a deposit account. Hopkins t. Abbot, L. E., 19 Eq. 222 ; 44 L. J., Chanc. 316 ; 23 W. R. 227. (J) Stein V. Richardson, 37 L. J., Chanc. 3G9. [k) Page v. Young, L. R., 19 Eq. 501 ; 23 W. E. 479. (/) Langdale v. WMtfeld, 4 K. & J. 426 ; 27 L. J., Chanc. 795. b2 THE RELATION BETWEEN BANKER AND CUSTOMER. nothing of a fiduciary cliaracter in the relation between the parties {m). ■ And it seems that th.e Statute of Limitations runs against this debt as against any other simple contract debt ; and if there has never been any payment of the principal, or in- terest, or some other acknowledgment by the banker satis- fying the provisions of the act, subsequently to the first deposit, for six years, the right to recover the sum deposited would be barred by the statute {/i). If bankers were trustees of money of their customers in tbeir hands, this must follow, that notice to them of the drawer having assigned to the payee of a cheque an inte- rest in so much of the drawer's money would, of if self, bind the bankers to pay to the payee or bearer, and give the payee or bearer, on non-payment, a right in equity against the bankers (o). But it has been expressly decided that money deposited with a banker, and ordered by cheque to be paid to a third person, is not money bad and received to the use of that person until the bankers have bound themselves to pay it over {])). The debt until then remains between them and the customer; so that in case of non-payment to his order, the payee has no remedy, either at law or in equity {q), (»0 Folcj/ V. Hill, 2 H. L. Cas. 39, 42, 45 ; S. T., per Iviiight Bruce, L. J., in Smith v. Leveaiix, 2 De Gr., J. & S. 5. A banker as a witness is bound to answer what the balance of a party to a cause was on a given day, as the knowledge does not come to liim in the natvu-e of a confi- dential or privileged communication. Loijdy-. Frc&hfiehl, 2 C. & P. 32-3. A banker with whom a contributory has kept an account is liable to be siunnioncd under the Companies Act, 18G2, s. 115, and to produce his books relating to the account, and to give all information in his power toucliing his affairs. Forhoi's casr, 41 L. J., Chanc. 4G7. {>/) Fott V. Chijg, IG M. & W. 321 : see Bridgman v. Gill, 24 Beav. 302. It is no breach of a contract to pay intei'est on money dei^osited, that the banker had not regularly entered the interest in liis books, the money having been suffered to lie in his hands for eight j'ears. Foley v. IFtll, 2 II. L. Cas. 40. The usage of bankers by which they charge interest on advances to customers has been expressly sanctioned by the Courts. Gwyn V. Godlcij, 4 Taunt. 34G ; King v. Ihadlcg, 5 Price, 53G ; Crosshill v. Jfowcr, 32 Beav. 8G. But before compoiuid interest can be charged an agreement must be .shown to that effect. Fx parte Brown, 9 Ves. 223. (o) Dearie v. Uall, 3 Iluss. 1. \p) Malcolm v. Scott, 5 Excli. 610. (//) Ilopkinson v. Foster, L. R., 19 Eq. 74 ; 23 W. R. 301. This rule in THE RELATION RETWEEN BANKER AND CUSTOMER. against the banker ; but the customer is the proper party to sue, and, as will be seen, may recover substantial damages for the injury, always assuming that his account at the time shows a sufficient balance in his favour. The customer has also the right of ordering the banker to carry his balance, or any part of it, to any other account kept with the banker by any other person, and this may be effectually done either by a cheque or an order in writing or orally, though a formal mode is usually adopted (r) , It is of the nature and essence of the transactions between banker and customer, that the latter, having a balance in his favour, will be able to com- mand payment at sight (.s). It must be clearly remembered, then, that the ordinary relation between a banker and his customer is that of debtor and creditor, and not that of trustee and cestui que trust {t). But although there is nothing in this relation to consti- tute the banker a trustee, he may, of course, by agreement, take upon himself the character of an agent, or make him- self a trustee towards a cestui que trust ; for example, if a customer deposits exchequer bills with a banker, and he undertakes to receive the interest upon them, or undertakes to negotiate or make sale of them, and to credit the cus- tomer's account with the proceeds of the sale, in this case, it is obvious, he is in the position of a trustee, and partly, at least, sustains a fiduciary character; but this service may or may not be appended to his employment of banker; his trade of banker is totally independent of it ; his trade of banker consists of the general trade, to which the other is an accidental addition (»). Where three trustees, two of whom were bankers, were empowered by a creditors' deed to carry on the business of not affected by subsect. 6, sect. 25 of the Judicature Act, 1873. Schroeder V. Central Bank of London, 24 W. R. 710; 3i L. T. 735. ()•) Jfattsv. Christie, li Beav. 651. (i) 11 Beav. 546. {t) In re Agra and Masterman'' s Bank, Ex parte Waring, 36 L. J., Chanc. 151 ; L. R., '6 Chanc. 206 ; 24 L. T. 376 ; 19 W. R. 486. {a) Per Lord Brougham in Foley v. Hill, 2 H. L. Gas. 4^ . THE RELATION BETWEEN BANKER AND CUSTOMER. the debtor, and to borrow money " from any bankers or otber persons" for that purpose, and the bankers made ad- vances of money to the trust at compound interest, the Court held that, having regard to their fiduciary cha- racter, they could make no profit, and were entitled to simple interest only on their advances {x) . So when a banker receives money to invest in stocks, or receives orders to appropriate the customer's balance, or a specified part of it, to any specific purpose, and assents, or does not repudiate the orders, he is in the situation of a trustee or of an agent with reference to that money. But it is not necessarily part of the business of bankers to invest money for their customers (y). Where bankers take a mortgage security from their customer, for a fixed sum owing to them by the latter, the relation of banker and customer ceases thenceforth as to that sum, and it cannot be included in the customer's current account, so as to entitle the bankers to charge compound interest thereon ; and in reference to the sum so secured, the mutual rights and obligations are thence- forth those of mortgagees and mortgagor (-). As the right of the customer is to draw out the whole of the sum he deposits with the banker at any time that he may so please, the acceptance by the banker of a bill drawn upon him by his customer against the amount of the balance in his favour, and made payable at a distant day, is in effect a borrowing of the sum until that day by the banker ; for the customer, by drawing the bill, consents that that which is payable immediately shall not be pay- able until the maturity of the bill (a). It is the duty of a banker in no way to disclose the state of his customer's account, except on a reasonable and (.»■) Crcsskill V. Doicer, 32 Beav. 8G ; 32 L. J., Clianc. 540. ll/) Bishop V. Countess of Jersey, 2 Drew. 143 ; 23 L. J., Chanc. 483. (;) Mossc V. Salt, 32 Beav. 269 ; 32 L. J., Chanc. 7-56. {a) Bank of England v. Afidtrson, 4 Scott, 118 ; 3 B'mg. N. C. G63. THE RELATION BETWEEN BANKER AND CUSTOMER. proper occasion (b). It has been doubted wliether an action will lie at all against a banker, unless the customer has been damnified by the act of disclosure (b). "When a cheque is presented for payment, and there are not suffi- cient assets of the drawer's in the banker's hands, he cannot say to the holder, "not enough to meet it by such a sum," and so enable the holder to pay in the deficiency to the drawer's account, and obtain payment of the cheque to the prejudice of other creditors. A banker is not justified when such is the case in going fui'ther than saying "not sufficient assets" (c), or, what is more usual, " apply to the drawer." Bankers, as we have said, are bound to obey the orders of their customers within the usual course of business ; if they disobey them they are responsible both for the delay and for any consequence which directly follows the delay. Thus a house in America employed an agent in Birming- ham to purchase and ship goods for them : on account of which they sent to him a bill drawn by A. in America on B. in London, but without indorsing it. The agent directed his bankers to obtain B.'s acceptance of it ; B. refused to accept ; of which, however, the bankers omitted to give any notice until the bill was due, when they again presented it and it was dishonoured. Before the bill ar- rived in this country A. had become bankrupt, never having had any funds in the hands of B. Then here was a damage done to the agent, but to what amount ? Not to the whole amount of the bill, because of the circum- stance that the house in America, not having indorsed, was not entitled to notice of dishonour of the bill, and still remained liable to him for the price of the goods he had sent out to them; also the drawer was not entitled to notice, because he had no funds in the hands of the {b) Eardy v. Veasey, L. K., 3 Exch. 107 ; 37 L. J., Exch. 76. If the duty not to disclose rests on an implied contract not to do so, then, it is submitted, an action would lie though no damage could be proved. (c) Foster v. Bank of London, 3 F. & F. 214. THE RELATION BETWEEN BANKER AND CUSTOMER. drawee ; therefore all that the agent was entitled to re- cover, as the circumstances of the case stood, was the damage which he had sustained by reason of his having been delayed in prosecuting his remedy against the drawer {d). In ordinary circumstances it is obvious that the bankers might have become liable for the whole amount of the bill, namely, if the American house had indorsed, and the bill had been drawn against effects. But, as has been said, it is only to their customer that, in the absence of any act of theirs, they are responsible ; thus bankers, when they receive bills from a foreign cor- respondent with directions to pay the amount to the plaintiff, and when he applies to them, they refuse, and afterwards the amount of the bills comes to their hands, the plaintiff cannot sustain an action against them as for money had and received to his use {c) . If, however, the bankers had assented to the order, and informed the plaintiff that they held the money for him, he might, of course, have sued them (/). So an order by a customer to his bankers to hold the customer's money at the disposal of A. B., is revocable until actual appropriation or payment of the money ac- cordingly (g), or until a promise by the banker to A. B. to make such payment (A). We have already stated the duty of a banker to be to conform to the orders of his customer, with respect to the money deposited by the customer, so long as there is in his hands a balance in favour of the customer, and the orders relate to matters which it is the usage and practice of the particular bank, or of the bankers in the district, to do for their customers, or which the bank has specially ((I) Van Wort v. Woolley, 3 B. C: C. 439. {r) WUUams v. Everett, U East, 582; Stcuart v. Fry, 7 Taunt. S39; IFcd- lake V. Uurktj, 1 C. & J. 83. (/) FruhVwg v. Schrordcr, 2 Biiig. N. C. 77. \g) Gibson v. Mbut, R. & M. G8 ; 1 C. & P. 247 ; 2 Bing. 7. (it) Lilly V. llu'js, 5 A. & E. 548 ; Ilod^json v. Anderson, 8 B. & C. 342. THE RELATION BETWEEN CANKER AND CUSTOMER. agreed witli the customer to do for him. Now, if tlie bankers perfoiTii sucli orders punctually, they will often be exonerated from loss in cases where it may be difficult, perhaps, to see any other ground for holding them irre- sponsible except that the customer's orders have been faithfully and fully performed without negligence or delay. Much more, then, will they be irresponsible if, acting as the agents of other bankers with Avhom a party has an account, they conform to the orders of that party, though with him they have no account at all. Thus, A.'s broker, by his directions, was accustomed to pay dividends into a banker's in London to A.'s credit in account with a bank at Abingdon, where A. resided, and the London bankers had been accustomed to act accord- ingly, accepting the payments, giving credit to the Abing- don bank and advising them by post next day. A certain payment of this kind was made on the 14th of October into the London house by cheque, and they wrote to advise the Abingdon bank in the usual way by the post of the 15th, on the morning of which day the Abingdon bank stopped payment, and never again opened the bank for business. On that day the Abingdon bankers were indebted to the London house to a large amount. It was held that A. had no claim against the London bank for the payment so made ; for the com-se of business showed that A. and the country bankers had agreed that they should account to him for all sums so to be paid into the London house as above, and that the London house had actually carried the money to their credit (/). Here the ground of decision seems to be, that the London bankers, by conforming to the arrangement by which in efEect they undertook to comply with A.'s orders as to any money that might come to their hands pm*- porting to be paid in by his authority and under directions (i) JFUUams v. Deacon, 4 Excli. 401. IQ THE RELATION BETWEEN BANKER AND CUSTOMER. from him as regarded his account with the country bank, of which conformity the course of dealing was evidence conclusive as not being met by counter proof, the London bankers were exonerated from liabihty to him ; but, pos- sibly, if it could have been shown that they had not in fact given credit for the money in account with the Abingdon bank before it was reclaimed by A., the result would have been otherv/ise Qc). It will be observed that A. was not a customer of the London bank ; but, in another case, where a person paid money into a London bank, also not being a customer of the bank, in order that they might cause it to be paid to him or his order, through their correspondents, bankers in a country town, on a certain day, and they received the money, but did not cause the money to be paid on the day, whereby the party suffered damage, he was appa- rently considered to have a good cause of action against the London bank, on the ground that the receipt of the money was a good consideration for an undertaking to the above effect, and that they might be sued for the breach of their promise in that respect. Now here the London bankers, it is submitted, must either be considered as gratuitous bailees or as debtors in respect of the money paid in ; but if they were the former, then it would have been a breach of their duty if they had not remitted the identical coins or bank notes paid in — a proposition which could hardly be maintained as against bankers ; therefore it would seem that the party paying in, though not having a running account with them as a customer, must be con- sidered as a customer pro Iidc vice, and the bankers as debtors to him 2^>'0 tan to, and liable to comply with his orders according to tho usual relation of banker and cus- tomer (/). (k) See Stevens v. Madcrman, cited in -1 Exch. 401,wliere Lord Abinger, C. B., held at Nisi Prius that such a pajinent might be countermanded. See Atldn v. Uarwirk, 1 Stra. 1G6; ir) Ilex V. Ellor, 1 Leach, C. C. 323, was an indictment on the 7 Geo. 2, c. 22, for forging an order for payment of moncj'. The order was in the following words: — " Messrs. Songer, — Please to send ten pounds by the " bearer, as I am so ill I cannot wait on you. Eliiiabeth Wcry." The AS TO THE ADDRESS OR DIRECTION. 13 sum of money, will suffice, provided the following points are observed : — 1. That the jxqjer is directed to the hcudcer h>j his 2)roper Constituent or usual name, style or firm. elements. 2. That it is dated. 3. That it contains the sum to he paid. 4. That it is stamped. 5. That it is made payahle to hearer, or to order, on demand. 6. That it is signed hy the party drawinfj or entitled so to do. It seems that a cheque, in any other language than the English, would not he according to the usage of bankers in this country, and therefore a banker might legally refuse to cash such a cheque if he had any doubt as to the genuineness of the drawer's signature. We ^ill now state the reasons for these several requisites in theu" order, together with the principles and rules that have been laid down respecting them, and such illustra- tions and examples as appear to conduce to the full com- prehension of the subject. 1. As to the Address or Direction. — A cheque, being Addresser in fact an open letter of request, must, it is obvious, to be '^'^"^ction. operative, bear upon it the name of the person who is requested, as well to indicate to the holder where to pre- Court said, " The Act of Parliament moans such an order for payment of money as, if genuine, the party g'iving- it had a right to make ; but this appears to be a mere letter, rather requesting the loan of money than ordering the payment of it. The terms do not import anything conipul- soiy on the part of the drawee to pay it." In the case of Little v. Slack - ford, M. & M. 171, where the paper was in these words: — "Mr. Little, ' ' please to let the bearer have seven pounds, and place it to my account, " and you will oblige your hvunblo servant, E. Slackford," Lord Teu- terden, C. J., held, that it did not require a stamp, and was not a bill of exchange. "I think no stamp is necessary ; the paper does not purport " to be a demand by a party having a right to call on the other party. " The fair meaning is, you will oblige me by doing it;" or, as it was said in MitchcW s case, 1 Leach, C. C. 95, n., a man has no right posi- tively to expect pcrfoiTnance, when rcqiiisition is not a right and per- fomiance a dutv. 14 CHEQUES. sent it for payment, as to show the banker who it is that is called upon to cash the order. On the same grounds that a bill of exchange must have an address according to the custom and usage of merchants, a cheque ought to have one {d). If the bank is carried on under a firm or company, either the proper and full style of the firm or company, or the style by which it is usually designated and known, ought to be used. No person but the person addressed could, after cashing the cheque, have a right to recover from, or have allowed in account with, the drawer, the sum so advanced, which would in fact be in the nature of a gratuitous payment. Date. 2. As to the Bate.— A cheque may be dated on any day before, or on the day, on which it is issued. A cheque is issued when it is in the hands of a person entitled to demand cash for it (e). There is no objection to dating a cheque on a Sunday (./), though of course it would not be presentable or payable on that day. But if a banker cashes a cheque before the day of its date, or before it is due, he will not be protected; and, therefore, where a banker cashed such a cheque that had been lost, he was made to repay the amount to the party who had lost the cheque (g). A cheque, whether payable to bearer or to order, may be post-dated, that is, dated on a day after that on which it is in fact drawn or issued, without being invalid, if it is stamped, as will hereafter appear {h). Altering the date of a cheque is a material alteration, and will invalidate the cheque (/). {d) Beawes, Lex Mercatoria, p. 563, pi. 3, edit. 1813; Com. Dig. Mer- chant, F. 5. (e) Ex parte Bignold, 1 Deac. 735 ; 2 Mont. & A. 633. if) Bcghic V. Levy, 1 C. & J. 180. If,) J)a Silra v. Fnllcr, Chitty on Bills, 180, 272, 10th edit. ; and per Parke, B., 7M. & W. 178. Ui) Post, p. 20. ^. „ ■ (i)Va»ce V. Loicihcr, L. R., 1 Ex. D. 176; 45 L. J., Ex. D. 200; 34 L. T. 280 : 24 W. R. 372. TO CONTAIN THE SUM TO EE PAID. u 3. T/ie Cheque must contain the Sum to be paid. — The Tlie cheque i,'i. T_i J 1-j'j. must contain relation between a banker and a person who deposits ^^^^ j.^^^^, ^^ ^^ money in his bank being simply that of a debtor to a P^i'^- creditor, to the amount deposited, which, by the nsage of bankers, the banker is, at all times, bound to pay out again to the customer upon his cheques under his hand, until the whole, miiuis the banker's commission (where commission is payable), is exhausted, provided the cheques are pre- sented within banking hours : it follows, that the payments cannot be required by the drawer of the cheque to be made, in any other mode, than that in which an ordinary debtor can be required to pay an ordinary debt, that is to say, in English money only. The banker is not a bailee, who is bound to return in specie the coins or other kind of money deposited, upon demand ; therefore, although one thousand pounds have been deposited with him in gold, he is not bound to retui-n gold in payment of chec^ues drawn against it ; any cheque which may be presented will be duly honom'ed by paying it in whatever form a legal tender of pajTnent of a debt, of the particular amount specified in the cheque, may be made. Formerly, a cheque for less than twenty shillings was absolutely void, and the uttering or negotiating such an instrument rendered a person liable to a penalty of 20/., mitigable to 5/. ; and it was an offence to utter a cheque on which less than twenty shillings remained due, under the 48 G-eo. III. c. 88, s. 3. But by the 23 & 24 Vict. c. Ill, s. 19, it is expressly provided that notwithstanding anything in any act of parliament contained to the con- trary, it shall be lawful for any person to draw upon his banker, who shall hojid fide hold money to or for his use, any draft or order for the payment to the bearer, or to order on demand, of any sum less than 20.s-. (/). (j) See also 26 & 27 Vict. c. 105, s. 1. This restriction did not extend to cheques drawn upon a party's own banker in Ireland after the 8 & 9 Vict. c. 37, s. 28, or in a similar case in Scotland, after the 8 & 9 Vict, c. 38, s. 20. 16 CHEQUES. A clieque must not be expressed in foreign money, as dollars, rupees, francs, rubles, &c., because it is no part of the banker's i?)iplied {/c) contract with his customer nor of his duty of debtor, to pay the debt in any but the known and current money of England (/). The money of account of England is expressed in pounds, shillings, pence and farthings ; accordingly £ s. d. is taken in law to mean Enghsh money ; pounds, shillings, pence ; and not foreign money, as, c. g. livres, sous, deniers (;;?), and the word sterling means current money (/?) . /, If the sum in the body of a cheque differs from that in /the margin, the sum in the body is the sum which the banker ought to pay (o). Hence, a cheque, in the body of which the sum was expressed only in figm'es, with the letters £ s. d. [thus, £100 : lOs. 8f/.] could not legally be refused payment by a banker having assets in his hands, and such a cheque, purporting to bear date at a place in France, and properly stamped and duly presented, would be valid and binding on all parties for the amount expressed in English money. But to prevent mistakes, and to render frauds less easy, the form already given, in which the sum is tv/ice stated, once in words, and a second time in figures, with the above letters attached, is the one in general use, and ought always to be adopted. For although the Court would prevent a merely obvious omission or slip from being turned to the prejudice of any one connected with the cheque, as, for instance, if a cheque was drawn for " twenty-five, seven- teen shillings and three pence," it would be held to mean twenty-five pounds sterKng, and seventeen shillings and (A) Of course such a epecial contract may be made between a banker and a customer or other person, but the order for such payment would not be, it is conceived, a cheque iu l;iw. See Parker, 11. 45. (/) llaskllw Draper, Yelv. j, 19 L. J., C. P. 373 ; 9 C. B. 827. 26 CHEQUES. Executors and adminis- trators. Infants. W/io may he drawer — Infants. — An infant cannot draw or sign a valid clieque ; in other words, a banker cashing the cheque of an infant, is not thereby discharged ; for a person under age cannot draw a cheque, for he cannot give a legal discharge {n). Executors and Administrators. — Executors, however numerous, are regarded in law as an individual person ; and therefore the acts of one of them, in respect of the administration of the effects, are deemed to be the acts of all. Hence payment to one is payment to all; and it follows that if a number of- executors has a fund standing in their joint names at a banker's, payment of a cheque signed by one of the executors will discharge the banker as to all of them (o). So it would be, although the exe- cutors were acting under a forged will {p). So a payment of the cheque of any of several admi- nistrators, made hand fide, would discharge the banker, although a will should afterwards be found {q). So a payment of the cheque of a surviving administrator of several, exonerates the banker: in a case where such survivor drew out a fund and absconded, the loss fell ou the estate of the deceased administrator (r). Trustees of Trustee in Banhrujitcy. — Under the Bankruptcy Act, bankrupts. 18G9, a single trustee now represents the interests of the creditors, and to whom, when appointed, all property of a bankrupt passes. A banker, therefore, having in his hands funds of the bankrupt, is justified in paying the same to the trustee. The creditors may, by sect. 83 (1), if they think fit, appoint more persons than one to the office of trustee, and where more than one is appointed, they shall declare whether any act required or authorized to bo («) See per Lord Abinpror, C. B., in C'aUaml v. Lloyd, G M. & "W. 31. io) Ex parte Rhjh•) Per Maiile, J., Norton v. Seymour, 3 C. B. 792, 794 ; Hogarth v. Latham, supra. (.s) Backhonse v. Charlton, 8 Ch. D, 444, 32 CHEQUES. be liis solely ; the banker may prove that the partner was acting as agent for the firm, in so opening the account ; but the mere fact of the money deposited being partnership property is not sufficient to show this, in an action by the other partner for dishonouring his cheque (.s). There is no implication of law from the mere existence of a trade partnership, that one partner has authority to bind the firm by opening a banking account on its behalf in his own name (/). What has been said respecting partners signing cheques relates only to persons who are known to the bankers to be members of the firm, and not to partners who are not so known ; for a banker would not be bound to honour the cheque of a dormant partner, whom he was ignorant to be jointly interested in the fund with the others, although he were satisfied of the genuineness of the signature, and he could not, therefore, safely do so until he had got the authority of the firm (ti). The name in the pass-book is not conclusive that the bankers contracted with that person alone {v). Where two houses of business are partners in a par- ticular transaction, and have a joint sum to the account of the transaction in the hands of a bank, payment of the cheque of one house, out of that fund, is payment to both {tr). Corporations. Corporations. — When a corporate body has a deposit at linkers, it is in accordance with strict principles to lay down, that the bankers would not, at common law, be dis- charged by payment of a cheque that was not under the common seal, or signed by some officer of the corporation,/ whose signature the bankers were authorized to honour,/ by authority expressly given in an instrument under the! common seal ; but in most cases of statutory corporations («) CooJcc V. Seek)/, 2 Exch. 746. (t) Alliance Bank v. Krarsley, L. R., 6 C. P. 433; 40 L. J., C. P. 249. [h) See per Parke, P.., Coole v. Scelci/, 2 Exch. 749. (v) Sims V. Bund, 5 B. & Ad. 389. («') CollyiT on Partnership, 455. drawer's signature. 33 power is given to three directors, or to a finance committee, or to otlier officers or persons designated in the act, to draw and sign cheques, &c. In such cases the cheques ought to bear the signature (and, where that is required, the counter- sign) of all the parties designated {z) . " A banker," it has been said, " dealing with a com- Companies, pany must be taken to be acquainted with the manner in which, under the articles of association, the monies of the company may be dra^Noi out of his bank for the pui'poses of the company .... and the banker must also be taken to have had knowledge, from the articles, of the duties of the directors, and the mode in which the directors were to be appointed. But after that, when there are persons conducting the affairs of the company in a manner which appears to be perfectly consonant with the articles of association, then those so dealing with them, externa 11}', are not to be affected by any irregularities which may take place in the internal management of the company. They are entitled to presume that that of which only they can have knowledge, viz., the external acts, are rightly done, when those external acts purport to be performed in the mode in which they ought to be performed" (a). So, bankers who have funds of a company (formed under the Companies Act, 1862) in their hands may (acting hoiid fide) lawfully honour the cheques of the directors of the company, signed according to a form sent by them to the bank, without being bound, previously, to inquire whether the persons intending to sign as du-ectors have been duly appointed to office, in conformity with the pro- visions of the memorandum and articles of association: thus, — W., in concert with some friends and dependents of his, [z] See Scrrellx. Dcrl>)/sli'-Iar, 4 B. .•), and that they have priority before the cheques which come in on that day (.si). Formerly it was held that this marking was equivalent to an acceptance, and that the bankers so marking rendered themselves liable to pay the cheque. Now, however, by 19 & 20 Yict. c. 97, s. 6, and 41 Vict, c. 13, an acceptance, though it need not bear the word " accepted," must be signed by the drawee. (p) Hare V. Ilenti/, 10 C. B., N. S. 65; 30 L. J., C. P. 302. {q) See 4 B. & Ad. 754. (/•) M'CuUoch, Commerc. Diet. roc. Cleai-ing Hovise, 4 B. & Ad. 753 ; Warwick v. Eof/ers, 5 M. & G. 348; Jiobarts v. Tucker, 16 Q. B. 570; Bel- lainy v. JIaJoribaiiks, 7 Exch. 3S9 ; Boddington v. Sckkiickcr, 2 B. & Ad. 752. («) Iiobso7i V. Bennett, 2 Taunt. 388 ; Stevens v. Hill, 5 Esp. 247. CHEQUES. From this practice, as above detailed, it is obvious that a large portion of the clieques whicli are paid into banks in London by customers, in order that the amounts may be carried to their accounts as money, is never presented by such bankers, as bearers, at the banking houses on which they are drawn ; but that, instead, is established the practice of placing them in the drawers at the Clear- ing House belonging to the latter banks. In other vv^ords, they are presented to the clerks of the latter, who attend at the Clearing House; and such presentment has been held to be sufficient (/) . If the bearer banks with the same bankers on whom the cheque is drawn, no promise to pay can be implied from the bankers receiving the cheque without observation, and keeping it till the following day ; for iirimd facie they will be taken to have received it as agents for the bearer (»). As least they will be so where they had no funds of the drawer's in their hands at the time. But where A. and B. severally kept accounts at the same bank, and A. paid in a cheque in his favour, drawn by B., who was at the time considerably indebted to the bank, and the bankers received the cheque without obser- vation, and on the same day received moneys on account of B., and paid cheques drawn by him, and on the next day received moneys on his account, but in each case appro- priated those moneys to other claims upon B., and they had written to A. saying that they had not carried the cheque to his credit, but would retain it in the hope of its being provided for, and promised B. that they would pay it when they had funds ; it was held, that A. might recover from the bankers the amount of the cheque, in an action for money had and received {x), the bankers having had funds of B.'s in their hands subsequently to the receipt of the cheque, sufficient to have paid it but for their appropriation of them to other claims on him. (.') Ri'unohh x.rhfttlr, 2 Ciimp. 'lOO. («) Jioi/d V. Eiiimersoii, 2 A. ^; E. 181. {x) Kihby V. WiUiamH, 5 B. & A. «15. PKESENTMKNT THROUGH THE CLEARING HOUSE. 55 Presentation of Country Cheques through the Clearing Presentation House. — Cheques on country bankers situate at a distance chequrs*''^ from each other, when intended for collection in London, through the are crossed with the name of a London banker to whom hou«e?^ thej are sent by post, and who presents them in regular course at the country Clearing House to the London cor- respondent of the country banker whose correspondent's name is printed on the cheques. The London agent of the country banker does not mark them at once, or, in other words, as with cheques upon a London banker, does not give credit for them, but he transmits them by the next post to the country banker, who advises his London agent, by return of post, to debit his account with the same, and the London agent thereupon gives a draft for the amount to the banker from whom he received the cheques. The country Clearing House is used as a con- venient medium for the presentment of country cheques to the drawees {if). A., a banker at Worthing, received from B., a customer, a cheque drawn upon C, a banker at Lewes, distant about eighteen miles from Worthing, on the morning of Friday, the 8th of July, 1859, and sent it that evening by post to his London correspondent, D., for presentment through the country Clearing House. D.'s clerk handed the cheque at the Clearing House on the morning of Saturday, the 9th of July, to the clerk of E., the London correspondent of C, the drawer of the cheque, who sent it down by post of that evening to C, and it Avas held that the presentment v/as in due time (y). The following is another case on the same subject : — B., on Wednesday, the 6th of May, 1864, drew a cheque on his bankers, Morgan & Co., of Ross, Herefordshii'e, payable to Mr. Watkins, or bearer, with the memorandum at the foot, " London agents, Messrs. Barclay & Co." He paid the cheque on the same day to Watkins, in Mon- [y) Hare v. JlcnUj, 10 C. B., N. S. Co; 30 L. .7., C. T. 302. 56 CHEQUES. moutli, a post town ten miles from Eoss ; Watkins kept it from that day until Friday, when he paid it to the credit of his account at his bankers, Bailey & Co., Monmouth. They sent it by the post of Friday to the City Bank, their London agents, to be presented to the London agents of the Ross Bank, through the country Clearing House. The City Bank, on the following morning, accordingly presented it to Messrs. Barclay at the Clearing House, and were then informed that Morgan & Co. had closed their account with them on the Thursday preceding, and the City Bank then sent it back by post to Morgan & Co., at Ross, where it arrived on Sunday morning, the 10th of May. Morgan & Co., however, kept it till the 15th, when it was returned by them to the City Bank, through the post, dishonoured. The City Bank received it on the 16th, and by the same day's post sent it to Bailey & Co., who, on the 19th, gave notice of its dishonour to the drawer. Morgan & Co. paid money over the counter and to country bankers by letter till the 13th, when they stopped payment. B., from the time he drew the cheque down to their stoppage, had a balance more than sufficient to cover the amount of the cheque. In an action on the cheque by Bailey & Co. against B., the Court held, that there had been laches on the part of the holder in presenting or giving notice of its dislionour, and that the drawer was therefore dis- charged (a). It was intimated by the Com-t that it was reasonable to send the cheque to the London agents of Morgan & Co., but that it ought to have been retm-ned to Bailey & Co. when it was found tliat Barclay & Co. liad ceased to bo the agents of Morgan & Co. (a) . The payee of a cheque drawn on Monday, the 4th June, on a bank at Falmouth, paid it on Tuesday, the 5th, to the credit of his account in a bank at Truro, which is about ten miles from Falmouth. On Tuesday, the 5th, («) Baihi/ V. Bodatluan, IG C. B., N. S. 288; 33 L. J., C. P. 252. PRESENTMENT THROUGH THE CLEARING HOUSE. 57 the Truro Bank, having no agent at Falmouth, sent the cheque to Barclay & Co. their London agents, who received it on Wednesday, the 6th, and handed it through the Clearing House to the London agents of the Falmouth Bank ; they forwarded it to the Falmouth Bank, who received it on Thui'sday, the 7th, and debited the di^awer's account with the amount and cancelled the cheque, and by post of the same day wrote to their London agents to pay it on their account. On the morning of that day their London agents stopped payment, and the London agents of the Truro Bank wrote to the Falmouth Bank requesting them to return the cheque or pay it. On Friday, the 8th, the Falmouth Bank wrote, refusing to do either, and on the following day stopped payment. On Saturday, the 9th, the Truro Bank gave the payee notice of its dishonour : the Court of Uueen's Bench held, that the Truro Bank was entitled to debit the payee with the amount of the cheque, inasmuch as it was not bound to send the cheque direct to the Falmouth Bank, and there- fore it was presented in due time, and notice of dishonour was given to the payee in due time (b). Presentment by Pod. — Sending a cheque in a letter by Presentment post to the drawee is a good presentment, but there ought ^■^ P°^** to be a notice of dishonour if the money is not received by return of post (c). Witli respect to the Presentation of stale or orcrdue Cheques. Presentment — It is Avell settled, and may be regarded as a fixed rule, overdue "'^ that the indorsee of an ordinary bill of exchange, or pro- cheques, missory note, takes it if overdue with tlie equities that attach to it in the hands of the person from whom he received it ; but whether the bearer of a cheque is affected {h) rrhleaux v. Crlddk, 10 B. & S. 515; L. R., 4 Q. B. 455. See also Pollard x.Baiik of EiKjland, L. R., 6 Q. B. 623; jVational Han/c of America V. Jiangs, 8 Amer. R. 349. (f) Bailc)/ V. Bodmham, 16 C. B., K S. 288; 33 L. J., C. P. 252; Fri- deaax x.Criddlc, suiDra; UcijiroodY. Fkkiriny, L. R., 9 Q. B. 428. 68 CHEQUES. by the same rule, seems to have been laid down with some variation at different times. In a case where a cheque for 50/. was casually lost by the payee, and it was tendered, five days after its date, in payment for goods at a shop, and the shopkeeper took it and gave change out of it, and on the next day presented the cheque and received cash for it, and a verdict was found for the payee, in an action for money had and re- ceived against the shopkeeper, the Court treated cheques on the same footing, in this respect, as bills and notes, holding that the person tendering the cheque, not having any title, could not transfer a title {d). But in a later case, where a cheque had been fraudulently obtained from the drawer, and a trading firm, to whom it was handed six days after date, had given cash for it, and afterwards pre- sented it and received the amount at the banker's, the drawer failed to recover against the trading firm, in an action for money had and received, and it was said not to be true, as a matter of law, that a party taking a cheque overdue has it with the same title, and no other, as the person from whom he receives it, though the rule, it was allowed, was certainly so with respect to bills of exchange and promissory notes (c). There is an obvious distinction between a bill or a note having a fixed day for payment, which is taken when over- due, and a cheque found in circulation long after its date ; in the first case, suspicion of necessity attaches, in the latter, suspicion may or may not justly arise, according to circumstances ; whether it does, is for the jury to say. The staleness of a cheque may be a ground on which they may infer fraud, but there does not seem to be any rule of law which points out any given degree of staleness, as evidence conclusive on that point (./'). (d) Down V. HaUimj, 4 B. & C. 330. («) Rothschild v. Come;/, 9 B. & C. 389, 391; f^errcU v. Dcrl»jslnrc, (Jr. Itailwai/ Compel ti J/, 9 C. B. 811. (/) Sec JJc/iui-.i V. Ifarriutt, 1 Show. 1C4; Broun v. Dnvics, 3 T. R. 80; Sliirtcrmil v. Fordt; 1 «cott, N. R. 670; ^w Tarke, B., 9 M. & W. 17, 18. PRESENTMENT OF STALE OR OVERDUE CHEQUES. 59 So gross negligence may be considered, hy the jury, to be sliown in the circumstances under which a person takes a stale cheque as cash ; viz., negligence of the duty, which those circumstances imposed upon him, of inquiring into the connexion between the bearer and the parties named on the cheque, and if he has been guilty of such gross negligence, they may consider him to have been a fraudu- lent taker ; but no rule of law, it would a,ppear, lays dowu, with respect to such a cheque, what has been formerly laid down in the case of a party taking a promissory note after the date at which it was made payable in the body of it, that the taking it, after it v>^as due, is a suspicious circum- stance, from which the law infers that the taker had know- ledge of some infirmity in the title of the holder, and therefore takes it subject to all the objections to which it was liable in the hands of the person from whom he took itifj). Here the negligence consisted, apparently, in want of inquiry' to see whether the drawer had not revoked the cheque, which its appearance indicated he had done {//). When presenfahk for Paymrnt. — Bankers are not justi- When pre - fied in paying a cheque which is presented to them before pa^*^eat.^°^ the day on which it purports to have been drawn, or bears date, for by so doing they may be liable to pay over again the amount of the cheque ; e. g., if it has been lost by the payee, the banker must repay him, it being out of the usual course of banking business to cash cheques before the day of the date (/). {g) Amort/ v. Mereweather, 2 B. & C. 578; Willis v. The BanJc of Encjland, 4 A. & E. 32. ill) Scholey v. Samslottom, 2 Camp. 485, recognized in Ingliam v. Trim- rosc, 7 C. B., N. S. 82; 28 L. J., C. P. 294. Since printing the above the s'lbject of overdue cheques has been ag'ain considered, and the law, for the present, at least, settled. In London and Coiniti/ Bankinj Co. v. Groome (L. R., 8 Q. B. D. 288), Mr. Justice Field held, that therule of law as to bills of exchange and promissoiy notes, that an indorsee taking them after maturity takes them upon the credit of and can stand in no better IDOsition than his indorser, does not apply to cheques. (0 Dn Silva v. Fuller,- Chitty on Bills, 180 (10th ed.), cited ^^tv Parke, B., iu Jlorh-!/ V. C/dvenccll, 7 M. & W. 178. 60 ' CHEQUES. On the other hand, no days of grace are allowed on the presentment of a cheque (/.•). Cheques drawn hy the Treasury on the Bank of Eng- land are not payable after three o'clock p.m. (/), and they usually bear a memorandum, to this effect, printed at the top of the paper on which they are drawn. A cheque of the ordinary kind is strictly payable, or at least intended to be paid, immediately on demand ; and this appears to be universally the case, with the exception of cheques drawn on bankers in the city of London, where the usage of trade establishes the rule, that a cheque may be retained by the banker, on whom it is drawn, until five o'clock p.m. of the day on which it is presented, and, if there are no assets, it may then be returned to the person presenting it, and that too, although it has been, in the first instance, by mistake cancelled, as intended to be honoured. Thus, where a plaintiff paid into the bank of Y. & Co. a cheque drawn upon the defendant's house, and V.'s clerk took it to the Clearing House to be paid, and put it into the defendant's drawer, and received it back before five o'clock cancelled, but with a memorandum, can- celled by mistahe {m), written under, and it was proved that several cheques drawn by the same person had been paid on that day, but that, when the cheque in cpiestion came in, the clerk who received it immediately cancelled it, thinking it was to be paid, but finding, in a few minutes, that no more of such cheques were to be paid, wrote the memorandum above mentioned, and it Avas retm-ned to V.'s clerk accordingly. The Court held that, notwith- standing the cancelling, the defendant, according to the usage proved at the trial, had until five o'clock to return it, and that, having so returned it, this amounted to a (/.) Jfoi/ser V. Whitaln; 9 B. k C. 400; Siitto» v. Toomcr, 7 B. & C. 41G; Dixnn x.'XtdtdU, 1 C, M. & R. 307. And by tlic Bills of Exchange Act, 1871, 31 & 3") Vict. c. 74, bills of exchange and promissoiy notes, paj'able at sight or on presentation, arc payable on demand, and without days of grace. (/) 4 k o Will. IV. c. 15, s. 21. {m) Seedier BuUcr, J., lrf(lf>/ v. Mill.", 4 T. R. 175. PRESENTMENT ON DRAWEr's BANKRUPTCY. 6% refusal to pay (n). A cheque given after banking hours on the 25th of February, upon an understanding that it should not be presented for a few days, is presented in time on the 10th of March (o). Dispensation with Presentment. — Knowledge of the bank- Dispensing ruptcy or insolvency of the banker on whom a cheque is "^^*^ P^'^f i- -J -J T. sentment. drawn does not excuse presentment (7;) ; but it would seem the notorious stoppage of such bank will do so {q) . Braicer^s Banknqitcy. — The bankruptcy of the drawer Drawer's has been already intimated to be a good ground of refusal ^^^J^^i^ptcy. by the bankers to honour his cheques. In fact bankers stand in no different position, as regards the laws of bank- ruptcy, than other persons ; and, therefore, they are liable, like all other persons who pay money to a bankrupt, after knowledge of an act of bankruptcy, to be obliged to pay it over again to the assignees or trustee. Hence, if a banker, after knowledge of an act of bankruptcy com- mitted by a customer, nevertheless honours his cheques, the banker will be liable to repay the money to the bank- rupt's trustee; for, knowing of the act of bankruptcy, the bankers have imputed to them the knowledge of the legal consequences of the act, which is to render the party no longer a free agent and deprive him of the right to dispose of his property (r) . The only remedy of the trustee seems to be against («) Fernandez v. Glynn, 1 Camp. 426, n. (o) Careiv v. Duckworth, L. E,., 4 Exch. 313. [p) Camidge v. Allenby, G B. & C. 373, as explained in Robson v. Oliver, 10 Q. B. 704. ('/) In the case of bankers who have stopped payment, it is forcibly put, in Byles on Bills (13th ed.), p. 207, that it cannot be necessary for the holders of the notes of a bank which has notoriously stojiped pay- ment, and is shut up, to go thi-ough the empty form of can-ying their notes up to the bank doors and then carrying them home again (see note (A), ibid.). But the stopinng payment by a bank, which issues notes payable on demand, does not operate to dispense with the necessity of making a demand iu order that interest may be payable on its notes on winding up. In re East of England Banking Companij, L. R., 4 Ch. 14 ; 38 L. J., Chanc. 121. (;•) Vernon v. Hankctj, 2 T. E. 119. Notice of dishouoiir. 62 CHEQUES. tlie bankers ; lie cannot sue the creditor to whom the cheque was delivered and the money paid on it, he not knowing of any act of bankruptcy («). Nor is it a valid excuse for the banker, that he pays to a creditor who does not know of the act of bankruptcy, to whom a direct payment by the trader would stand good(f). At all events, if the trustee recover from the bankers the amount of a cheque paid to a creditor of the trader, under the above circumstances, he cannot also recover it from the creditor, though the creditor, when he received the money, knew of the act of bankruptcy [u). When a cheque is presented, and is not paid, notice of its dishonour is unnecessary, if there were no sufficient effects of the drawer in the hands of the banker to meet the cheque at the time, or a reasonable probability or ex- pectation of payment, for the drawer cannot be damnified for want of notice in such case (,r) . Where there had been eight days, during which there were no funds in the hands of the banker to meet a cheque, it was said there was no ground to contend that the drawer had a reasonable ex- pectation of the cheque being paid, and the case bore no resemblance to cases where funds might be expected to come in — as, for instance, in the case of a landlord whose tenants were accustomed to pay their rents into the bank, and who had therefore a right to expect there would be assets to meet the draft, and might, perhaps, for want of notice, lose his opportunity of recovering rent by distress {x). (.s) Mafhcio V. Sherirdl, 2 Tiiunt. 439; 1 Rose, 118. {t) See Vcr)ioH v. llankcii, 2 T. E,. 117. {n) Vernon v. JIankeij, 2T. R. 287. (.'•) Cariw V. Buckwoyth, L. R., 4 Exoh. 313. See Ex ^mrtc Bii/noliI, 1 Deac. 728; IVirth v. Aitstht, L. R., 10 C. P. 689. ( 63 ) CHAPTER VI. CROSSED CHEQUES. Previously to the alteration of the law of crossed cheques Practice as to effected by the statutes hereinafter referred to, in the ciiemiefbe- metropolis, and in many other places, it was a common fore alteration practice for a person drawing a cheque, to write across the cheque the name of a hanker, ordinarily the banker of the party in whose favour it was drawn. The intention of this was to advertise the bankers upon whom the cheque was drawn that they were to cash the cheque only to or in favour of the banker whose name so af)peared written across the instrument ; the reason for adopting the precau- tion was to prevent its being paid to a wrongful bearer, e. (J., one who had found it, or got possession of it by fraud or felony. If, however, a cheque so crossed was handed to another person as bearer, there was no objection to his erasing the name of the banker that he found upon it, provided he substituted the name of another banker {a). It was not unusual to write across a cheque " and Co.," leaving a blank space on the left hand side of the word, " and," in order that it might be filled in with the name of the banker through whom the payee, or any one to whom he might pass the cheque, intended that the cheque should be presented ; and when so crossed, as in the former case, the banker on whom the cheque was drawn was in the habit, in London and other places, of refusing to cash the cheque, if presented otherwise than through the banker ; and so, if the blank were not filled (ff) f. C7, note ('). CROSSING. to the true owner of the cheque by reason only of having received such pajonent" (/.•). (k) In the recent case of Matlilcson v. London and Coiotfij Bank (5 C. P. D. 7), it was contended that the protection chiuse in this section only applied to cases in which the cheque had been specially or generally crossed with the words "not negotiable," and that if a cheque merely generally or specially crossed had been paid into a banker for collection, the proceeds could be recovered from him by the true owner, should the customer's title to the cheque prove defective. The contention, however, was overrided, and it was decided that the banker was relieved from responsibility to the true owner of a cheque crossed in blank, but without the Avords "not negotiable," where he had bond Jidc, and in the usual coiu'se of business, and without negligence, received payment of it for a customer, notwithstanding any defect in the title of the latter. 71 CHEQUES. CHAPTEE VII. CASHED CHEQUES. Let us consider what is the proper mode of disposing of a cheque after it has heen cashed. By the Stamp Act, 1870, s. 51 (2), the hanker must cancel it ; hut is the banker, or the drawer, entitled to its possession ? "We have seen that when a cheque is dis- honoured, it is returned, in the technical phrase, with " no effects," or words to that effect, written upon it. When the hanker hands hack the cheque to the drawer, after it has heen cashed by the banker, this restoration is not known as a return of the cheque. In fact, however, such restoration nearly always takes place ; the banker's duty, in the absence of any agreement with his customer to the contrary, being to return the cheque after cashing it. Except where there is such an agreement, a banker has no more right to a cheque which he has honoured, than the payee of a bill of exchange has to the bill when paid. It is always considered that the cheque when paid (a) is the property of the drawer and in his posses- sion ; the banker, _/br tliis ptirpouc, being his agent, and the possession of the banker his possession {h) ; and therefore where the drawer is one of the parties to an action, a notice to produce is all that is necessary to get the paid cheque before the Court {c). This is the rule witli respect to all clieques drawn in the usual mode. But in some cases bankers require their cus- tomers before opening an account to consent to their cheques being retained by the bank, and there may also be instances ('/) Pa- Wilde, C. J., in AVy. v. mut.s, 2 Dou. C. C. 21. (i) I'artridge v. Coates, R. & ]\I. 156. [c) Jiinlon V. Fffi/nc, 2 C. & P. ')20. CASHED. 73 where a cheque is drawn with the intention that it should remain in the banker's hands, after he has paid out the amount of it, as a kind of security for repayment, on which he may be able, if necessary, to proceed against the customer (d). The reason of the above rule is immediately seen when we consider that the cheque, bearing the tokens of having been cashed by the bankers, affords evidence, when pro- duced, that the money for which it is drawn has been paid, according to the requirement of the drawer, by the drawees ; it is, therefore, the di-awer's proof, or voucher, of the payment of the debt due to the payee of the cheque. When the drawer draws, on his own account, against his own moneys deposited with the bankers, the cheque in its cancelled state is his evidence against the payee that the debt has been discharged. When the drawer draws on a fund in the banker's, upon which he is specially empowered, in respect of some office or situation which he holds, to draw, it is his voucher, as against his constituents to whom the fund belongs, that their debt to the payee has been duly discharged. In either case equally, the cheque, or the piece of paper, is the property of the drawer (e). Where a drawer of a cheque, after it had been paid and returned to him cancelled by his bankers, darkened the signature so as to give it the appearance of a forgery ; and then took it to his bankers and represented it to them as the forgery of another person : it was held, that the altera- tion of his own cheque by the drawer, although a cheat on his bankers, was not a forgery (/). (d) See Otkey v. Iveson, 24 L. J., Ch. 654. (e) Jieff. V. Watts, 2 Den. C. C. 14, 22. (/) Brittain v. Bank of London, 3 F. & F. 465; 11 W. R. 569. 74 CHEQUES. CHAPTER VIII. CHEQUES AS EVIDENCE OF PAYMENT, ETC. Where the plaintiff was tenant, and the defendant land steward, of a proprietor of land, and the defendant had received from a railway company a sum of money to he handed over to the plaintiff, as compensation for injury done to his temporary interest, as tenant, by the com- pany's works, and the defendant had drawn a cheque, for 15/., upon his bankers in favour of the plaintiff, who had presented it to the bankers and obtained payment of it from them ; but there was no evidence that the cheque had been delivered by the defendant to the plaintiff, it was held, notwithstanding this, that the cheque, upon being produced by the defendant in a cancelled state, was evidence of the payment to the plaintiff of the 15/. (a). Here, it will be o1)served, there was independent evidence to establish the fact of money being due from the defen- dant to the plaintiff : but unless a consideration for delivering the cheque, and the circumstances under which it is delivered, are shown, the proof of the delivery and payment of a cheque to a party is not sufficient to prove a debt {h) ; so that to produce a cheque di-awn by the de- fendant is not an admissible mode of enforcing against him an alleged debt due to the plaintiff. But the produc- tion of a cancelled cheque, after it has been shown aliintdr that there was duo from the drawer a debt to the payee before the date of the delivery to him of the cheque d^■a^\•n in his favour, is always evidence of payment, without explicitly tracing tlie clieque from the drawer to the (a) Mountfurdv. lltirpo; 10 M. k "W. 825: IG L. J., Excli. IS'2. \h) Anhcvt V. ll'dlili, 4 Tiiunt. "JDS: Lhi/d v. S,ii/dih>id'<, Gow, 1'), as cur- r.'ctfd, rrr AMcrs..Ti, H.. IC. M. .^: ^Y. sL>7. AS EVIDENCE OF PAYMENT, ETC. 75 payee. To prove a payment, it is enough to put in evi- dence a cheque shown to have been in circulation (i V. Dodwell, 23 L. J., Q. B. 137; 3 El. & BI. 13G ; Irviiiy v. Yeitch, 3 M! & W. 90. AS EVIDEISCE OF PAYMENT, ETC. 77 determined that it was, and upon principles and reasoning which seem to apply equally to part payment by a cheque. The plaintiff having agreed to lend to the defendant a sum of money gave him a cheque for the amount, which the defendant paid into his own bankers, receiving credit for the amount. The cheque was not paid by the plaintiff's bankers till some days afterwards. The plaintiff brought an action for money lent, and it was held, that the Statute of Limitations only ran from the time of the payment of the cheque by his bankers (/) . Where, however, a purchaser, at a sale, gives a cheque for the amount of the deposit required by the conditions of sale, he may resist an action on the cheque on any grounds which would have enabled him to recover, at law, the deposit, if it had been made in money (>;?). Again, to establish a petitioning creditor's debt, it is not enough to show that a cheque was drawn by him in favour of the trader before the bankruptcy; it must be proved that the amount of the cheque was paid by the petitioning creditor's bankers (n). The mere drawing of a cheque on his bankers by A. in favour of B. is not per se evidence of a loan of so much from A. to B., without proof that it was presented and paid (o) . As we have seen, the ordinary relation of customer and banker is that of creditor and debtor respectively ; conse- quently, where a banker is the petitioning creditor, the production of cancelled cheques, drawn on him by the trader before the' bankruj)tcy, is prima facie evidence of a payment of a debt due from the banker to the customer, not of a loan made by the banker to him, nor can this effect of such evidence be rebutted, and the existence of a loan established, so as to constitute a petitioning creditor's debt, without the clearest proof that the trader's account {I) Garden v. Bruce, L. E., 3 C. P. 300; 37 L. J., C. P. 112. [m) Mills V. Oddij, 6 C. & P. 735 ; 2 C, M. & R. 103. («) Blcasbi/ V. Crossley, 3 Bing. 430. (o) Pearce v. Davl'<, 1 M. & Rob. 36;') ; Cary v. Gerrish, 4 Esp. 9. 78 CHEQUES. with the bank was overdrawn at the time the cheques were honom-ed (p). The point does not appear to have been raised in this case, that the circumstance of the banker's having retained, in his own hands, these cashed cheques, contrary to the practice in the case of cheques drawn in ordinary circumstances, and the trader's submitting to the banker's doing so, in contravention of what would have been his right, if the cheques had been drawn in the ordinary com'se, was evidence to show a loan from the banker. The banker, in that case, would have a right to retain the cheques, because to part with them would be to put beyond his control the only conclusive evidence he might have of the loan, beyond the entries in his own books correspond- ing with the cheques, which would be perhaps open to the objection, that to let them in would be to allow the making of evidence in a man's own favour. In all cases of loans to customers some security, inde- pendent of cheques of the character of those just mentioned, ought, if possible, to be taken by the banker. It has been already mentioned, that if bankers, knowing of an act of bankruptcy of a customer having funds in their hands, honour his cheques, they are liable to the assignees of the customer, on his becoming bankrupt, for the amount they have paid out to such orders (imi V. Henley, 2 T. R. 113. AS EVIDENCE OF PAYMENT, ETC. 79 balance of 478/., clue to him, to the joint account of A. and B., and gave a written notice to the bankers of such as- signment, and A. and B. jointly required the bankers to place such balance to their joint account, which was not complied with ; on the 30th May an act of bank- ruptcy was committed by the bankers, on which the fiat issued on the 31st : it was held that A. and B. had no right to set off the two debts, their conduct show- ing that, though they knew they could not obtain pay- ment of a cheque, they had attempted to have the full benefit of A.'s debt. " The plaintiffs (A. and B.)," the Master of the EoUs said, " knowing that no cheque drawn upon the bank would be answered, resolved to have the benefit of the balance, in a way which they might not have considered prejudicial to any one, but which was nevertheless contrary to the policy of the bankrupt laws ; and this was by transferring the balance due to Thomas Watts (A.) on his separate account, and which could not be recovered, to the partnership account. They might have been encouraged to this course, as the same thing had been done by the bankers for other persons ; but it was a course which the law did not sanction " (/■). (>•) Watts V. Christie, 11 Beav. 546 ; 13 Jui-. 845. 80 CHEQUES, CHAPTEE IX. CHEQUES CONS[DERED AS MONEY. By the usage of trade cheques have been, in some cases, considered as money. For instance, by the usage of banking, if a bill was sent uji to a London banker from a country correspondent, to be presented for payment, the London banker was thought to be justified in receiving a cheque in payment for it, though the cheque should be dishonom-ed after he has given up the bill {a) ; but it may be doubted whether this usage would be considered, at the present day, to be a reasonable usage so as to protect the London banker. Another case in which a cheque has been regarded as payment is the following : — A cheque given for stock sold was lost by the vendor in going home ; the purchaser was immediately apprised of the loss, but refused to pay the price of the stock without an indemnity. Four months after this the bankers on whom the cheque was di-awn failed, with sufficient money of the drawer's in theii- hands to cover it. Held that, under these circumstances, an action would not lie by the vendor for the price {b). Cheques belonging to a person, against whose effects a writ of Jieri facias may have been sued out of any superior or inferior Court, may now, and must, be seized by the sheriff, by virtue of the 1 & 2 Yict. c. 110, s. 12, but the statute makes a distinction between cheques, and money or bank notes (both of which it empowers and orders the sheriff to seize) , in this way : it directs that money and bank notes shall bo given up to the judgment creditor, (n) JtiissfU V. Jfiiiilrii, G T. li. 12; IthUr,/ v. niackitt, Peakc, Add. Can. 02. (i) lievan v. Hilly 2 Camp. 381. AS MONEY. 81 but the sheriff is to hold cheques as a security for the sum directed by the writ to be levied, and is enabled to sue upon them, and the payment by the party liable on such cheque, with or without suit, or the recovery and levying execution against the party so liable, is to discharge such party from his liability on the cheque, and then the sheriff is to pay over the money so recovered to the judgment creditor : provided that no sheriff shall be boimd to sue any party upon such cheque, unless the judgment creditor shall enter into a bond with two sureties for indemnifying him from all costs and expenses to be incurred in the pro- secution of the action. A judgment creditor, finding that a sum of money was about to be paid out, in a cause in Chancery, to his debtor, applied to the Com't to order that the sheriff might be at liberty to seize, in the hands of the Accountant- General in Chancery, a cheque by means of which the sum was to be paid out : it was held, that the cheque was liable, by virtue of the above statute, to seizure : it was also held, that, inasmuch as the cheque was in the hands of the Accountant- General of the Com-t, the application was pro- per () See Beian x. Eill, 2 Camp. 381. (r) Johns v. Mason, 9 Hare, 29 ; 20 L. J., Chanc. 305. [d) King v. Zimmerman, L. E.., 6 G. P. 466. {e) Taylor v. Scrinns, 1 Bcav. 571. 90 CHEQUES. CHAPTER XIV. Cheating by means of cheques. CRIMINAL OFFENCES IN RELATION TO CHEQUES. For a person to give ■what purports to be his cheque upon his banker, in payment for goods, when in truth he has no account with the banker named, is a false pretence within the 24 & 25 Yict. o. 96, s. 88 («). So, where a prisoner was charged with falsely pretending that a post- dated cheque, drawn by himself, was a good and genuine order for 25/., whereby he obtained a watch and chain, and the jury found that before the completion of the trans- action — of the sale and delivery of the watch and chain, by the prosecutor, to the prisoner — he represented to the prosecutor, that he had an account with the bankers on whom the cheque was drawn, and that he had a right to draw the cheque, though he jiostponed the date for his own convenience, which was all false, and that he repre- sented that the chec^ue would be paid on or after the day of the date, but he had in reality no funds to pay it, the prisoner was held to be properly convicted (/>) . It is no false pretence, as regards the banker, to draw on and present to him a cheque for a larger amount than you have in his hands (r). A. drew a bill on B., on whom he had no right to draw, in order to induce bankers to honour his cheque, which they did ; and it was held not to be a false pretence, because A. only obtained credit, and not any specific sum on the bill {d). But to give a cheque by way of payment for an amount which exceeds (rt) Hix V. Jucl-ao)!, 3 Camp. 370. {b) lice V. rarlar, 2 Mood. C. C. 1 ; 7 C. & P. 825 ; .see also Itrg. v. Wahic, 23 L. T. 748. (c) /Vr Maule, J., in Brrj. v. Garrett, 23 L. J., M. C. 22. (d) Hex V. U'urell, 1 a[ood. C. C. 224 ; see 11 Cox, C. C, App. xi., for precedents of coiiutf? in an indictment fur jjrcscnting a false cheque. OFFENCES IN RELATION TO CHEQUES, 91 the assets available to meet it, with tlie knowledge that there is no authority to overdraw, and that it will he dishonoured on presentation, renders the di'awer liable to a conviction for false pretences {e) . A cashier of a bank has a general authority to part with the bank's money in payment of such cheques as he may think genuine, and, therefore, when money has been obtained from a cashier at the bank on a forged cheque knowingly, it • does not amount to larceny, but to obtaining the money by false pretences (/'). Formerly, the stealing of a cheque, qua cheque, did not stealing, amount to larceny, but now, by 24 & 25 Vict. c. 96, s. 27, it is made so ( g) . A person may be indicted for forging a cheque as " an Forging, order for the payment of money " under 24 & 25 Vict. c. 98, s. 39. If the charge in the indictment is for forging a warrant and order, proof of a document which is a warrant but not an order for the payment of money, will not sup- port the indictment (A). A cheque of a railway company, signed by the secretary, addressed to their bankers, directed the latter to pay to A. a shareholder, or his order, the sum therein mentioned. There was a memorandum at the bottom of the docu- ment, " The shareholder's name must be indorsed at the back of the cheque :" it was held, that a person who forged the shareholder's indorsement on the cheque was guilty of forging an order or a warrant for the payment of money (/). Forging and uttering an indorsement on a cheque, with a view to get it cashed by the credit of the name, will ■ (t) Bci/. V. Ifazclloii, L. E., 2 C. C. 1^4 ; 44 L. J., M. C. 11. (/) lii'ff. V. Trimr; 38 L. J., M. C. 8 ; 11 Cox, C. C. 193. (iioii Bank of Scotland, 1 Macq. H. L. Gas. 513 ; 2 C. L. K. 16GG ; Brithh Linen Company v. Caledonian Insurance Companij, 4 Macq. H. L. Gas. 107j 7 Jur., N. S. 587. (p) British Linen Company v. Caledonian Insurance Company, 4 Macq. 107. As to this stnttit«, see p. 22. LETTERS OF CREDIT AND CIRCULAR NOTES. 95 A letter of credit, which had been issued hy bankers in this country in favour of Mr. Robert Thomas with a re- quest to honour his draft for the amount therein mentioned, was addressed to their agents, the Oriental Bank Corpora- tion, Melbourne, in Australia; a person, having wrongfully obtained possession of it, presented it with a forged in- dorsement of the payee to a banker in this country to get cashed or collected for him, and was indicted for forging and uttering an order ; at the trial evidence was given that, according to banking practice in this countrj^, a letter of credit of this description was usually paid on the simple indorsement of the payee, but whether it would be so paid at Melbourne was not shown ; though, according to usage, on the presentation of the letter of credit at Melbourne, the bank there would take pains to ascertain the identity of the person credited, and, on being satisfied, would credit him to that amoimt, and, in the terms of the letter of credit, would honour the draft of the party to the extent of the letter of credit. It was objected, on behalf of the prisoner, that the in- dorsement was not shown to be an order, and Bramwell, B., said, " It is quite true that, if the bank at Melbourne chose to pay such a letter on the simple indorsement of the person credited, the latter could not afterwards oblige the bank to pay him a second time. But the letter of credit was directed to the Oriental Bank at Melbourne, which was to * honour the draft ' of ' Robert Thomas.' I think the simple indorsement in this country is not an order, not being within the original mandate, and I must direct the jury to acquit the prisoner. Perhaps," the learned judge added, " the prisoner might be indicted for the misde- meanor of attempting to obtain the money by false pre- tences" {(l). By the Companies Act, 1862, s, 41, a company ha-\ang Issue by its liability limited, either by shares or by guarantee, shall ij^^^i^ty com- panies. {f?) Pxeg V. WiUon, 1 F. & F. 391. 96 LETTERS OF CREDIT AND CIRCULAR NOTES. Marginal letters of credit. have its name mentioned in legible characters on letters of credit, purporting to be signed by or on behalf of the company; and by sect. 42, if a director, manager, or officer of the company, or any person on its behalf, signs, or authorizes to be signed, on behalf of the company, a letter of credit, wherein its name is not so mentioned, he shall be liable to a penalty of oO/., and shall further be personally liable to the holder of such letter of credit, for the amount thereof, unless the same is duly paid by the company. If the drafts drawn by the owner of the letters are not honoured, he may recover from the grantor monies paid by him in respect thereof, and the same rule applies where after payment of the drafts any surplus remains. It is his duty, however, first to restore the letters to the grantor (e). With respect to marginal letters of credit, which are letters of credit written in the margin of blank bills of exchange (,/'), they are described in the report of a case in which their real character and operation are defined ((/), and from which the following account is derived. The course of dealing and practice relative to the issue and user of marginal letters of credit differs considerably in different parts of the mercantile world, and the terms of such issue and user depend upon the actual agreement between the parties, and upon the terms apparent on the {e) Conflam Quarry CompaDij v. Parker, L. R., 3 C. P. 1. (/) The fonn of a marginal letter of credit is as follows : No. 39. o Credit for £2,000 stg. in duplicate. 4907. *{ National Bank of Scotland, Edinburgh, ^ 24th June, 18G4. To Messrs. Flrtdior & Coinpimy, Cliina. I hereby, for the National Bank of Scotland, authorize you to diaw the annexed BUI of Ex- change at six montlis' sight for Two thousand pounds sterling on Messrs. Glyn k. Co., Bankers, in London, wlio ■nill honour the same in confor- mity with its tenor, if presented along with this Letter of Credit within one year from this date. Tiios. Anukkso.v, Secretary-. Jso. J. Shearer, P. Manager. First of Exchange for £2,000 sterhng. No. ^^ F. — ^ — " 4907 Place and date of drawing, Shanghai, 5th April, 1865. Si.x months after sight \>ny this fii-st of Ex- change (second of the .same tenoi- and date not being accepted or paid), to oui' order, the sum of Two thousand pounds sterling, which charge to the National Bank of Scotland as per annexed Ijotter of Credit. To Messrs. (rlj-n & Co., Bankers, Ivondon. Drawer signs here, Fletcher & Co. {g) Maiilaiid v. The Churtvnd MircoHlUc Bank of linlui, Lumlun and Chltia, S8 L. J., Chanc. 3G3. LETTERS OF CREDIT AND CIRCULAR NOTES. 97 face of sucli marginal letters of credit. It is a common, but by no means an invariable, practice, that wben such mar- ginal letters of credit are granted by a bank in this country, in favour of a firm carrying on business abroad, the bank granting the letters of credit requires the secu- rity of some firm carrying on business in England for the rejDayment of any money which may be paid in respect of any draft drawn under such letter of credit ; but if the credit of the foreign firm were good, such security would not in all cases be considered necessary ; and, accordingly, whether such security is given or not depends on the credit and standing of the firm in whose favour such letters of credit are granted. The marginal letters of credit which are issued in this country, according to the usual practice, are sent to the foreign firm, not merely to enable it to raise funds for buying produce to be con- signed to England, but as a guarantee to the purchasers of the bills of such foreign firm that such bills will on presentation be accepted, and also to give more complete facilities for raising money to the foreign firm in whose favour such marginal letters of credit are issued {h). Marginal letters of credit are usually either " open ere- Open credits dits " or " documentary credits." " Open credits " are, on t^iy CTeditr"" the face of them, engagements on the part of the person giving such credits to accept the drafts drawn under sucli credits unconditionally, except that generally there is a certain limit as to the time within which the credits are to be available ; whereas " documentary credits " are en- gagements to accept bills drawn under them subject to a condition or a proviso on the face of the credit that the drafts, when presented for acceptance, are to be accom- panied by bills of lading or shipping documents (?'). A bond fide holder of a bill of exchange, drawn under (//) Ibid, at pp. 366-7. ((■) In re Agra and Mastcrma it's Bank, Ex parte Asiatic Company, L. R., 2 Ch. 391; 'Banner v. Johnston, L. R., 5 H. L. Cas. 157; 40 L. J., Chanc. 730 ; Vnion Bank of Canada v. Cole, 47 L. J., C. P. 100-C. A. G. 11 98 LETTERS OF CREDIT AND CIRCULAR NOTES. one of these open letters of credit and taken by Mm, can maintain an action against the grantor of the letter of credit in case of his refusal to accept the bill. " The marginal note which is put upon the face of the bill of exchange," Yice- Chancellor James said, "is intended to be a representation or a promise to any person who should become in due course the holder of that bill of exchange, that the bill would be duly honoured, and it would be clearly a contract with the owner, which would be a legal contract, the right of which would attach with the bill of exchange, and in that sense the contract is negotiable and assignable with the bill of exchange" {J). So, where open letters of credit were granted to Fletcher & Co., a China firm, on the guarantie of Maitland & Co., an English firm, and Fletcher & Co., in fraud and viola- tion of their agreement with Maitland & Co., drew bills under them not protected by shipping documents, and indorsed them for value to a bank who had no actual notice of the agreement between Fletcher & Co. and Maitland & Co. ; Vice- Chancellor James held, that the bank was entitled to require the grantors of the letters of credit to accept the bills, and that Maitland & Co. had no equity to restrain them from procuring such acceptance (,/). But as to the custom alleged that, according to the ordinary course of dealing in reference to letters of credit granted to foreign firms, the foreign firm could only obtain letters of credit upon the guarantie of some English firm, and that the foreign firm stipulated to use the letters of credit only for the purpose of buying goods to be consigned to England, and to transmit the bills of lading to the English firm as a security for the repayment of the bills of exchange drawn under the letters of credit by a mail not later than that which carried the bills of exchange ; the Vicc-Chancellor determined no such custom existed as Maitland & Co. averred, and that even if there was such a custom, the rights of tho bank as a bond fide holder {j) Maitland v. The Chartered jlfcrc<(>itile ]>ank of India, Londf»i and China, 38 L. -T.. Chaiip. ^63. LETTERS OF CREDIT AND CIRCULAR NOTES. 99 for value could not be affected by tbe mere constructive notice of the agreement between Maitland & Co. and Fletcher & Co. which the custom would imply. " It is quite a novelty," the Yice- Chancellor observed, " to me to have it suggested that the negotiability of a negotiable instrument is to be affected by any private arrangement of that kind, which parties do not choose to put on the face of the document. That distinction seems to me to be actually expressed in the paragraph of the answer which draws a wide distinction between an open letter of credit and a documentary letter of credit. If it were intended to limit Fletcher & Co. in the use of this letter of credit as between themselves and the world at large to a use for mercantile purposes connected with the purchase of goods, it would have been very easy to have expressed upon the face of the document that it was to be accepted if pre- sented accompanied by biQs of lading, or other documents representing mercantile transactions" (/»•). An open letter of credit constitutes also a contract to the benefit of which persons taking and paying for bills on the faith of it, are entitled in equity, without regard to any equities between the bank granting it and the parties to whom it is addressed, and the holder is entitled to prove on the winding-up of the bank for the amount due on the bills without regard to the state of the account between the bank and the addressees of the letter of credit (/) . An indorsee of a marginal letter of credit, not being on the face of it a document of credit, is not bound, in the absence of notice, to inquire whether it is being used for the purposes for which the credit was given {m) . But when a bank issues a letter of credit, on the terms that the bills which they agree to accept are to be covered by bills of lading to a like amount, suspension of payment (/.) Ibid, at p. 368, and see ante, p. 97. (/) In re A(/ra and Masterman'' s Bank, Ex parte Asiatic Banking Com- pan>j, 2 L. R., Ch. 391. {m) Maitland v. Chartered Mercantile Bank of India, London and China, 2 H. & M. 440 : 12 L. T., N. S. 372. h2 100 LETTERS OF CREDIT AND CIRCULAR NOTES. by the bank, before there has been time for the letter of credit to be used, is not a breach or a repudiation of the contract ; inasmuch as permission might have been given to the liquidators under the winding-up to negotiate the bills, and a claim by the holder of the letter of credit for damages for the alleged breach will be disallowed {n). Where the grantor of a marginal letter stops payment, and fails to meet it, the grantee is entitled to recover com- mission, notarial and all other necessary expenses (o). A bank granted a letter of credit to a company on terms that the company should ship tea and forward bills of lading, invoices, and policy of insurance on the tea to the bank, and should also draw on Barber & Co. bills, to be accepted by Barber & Co. to an amount sufficient to cover the amount authorised by the letter of credit. Barber & Co. guaranteed the performance by the company of these terms " holding themselves responsible for the same." The company drew on the bank, and the bank accepted the bills, but owing to the failure of the bank after the dates when the bills were drawn, and before they became due, the company shipped no tea, and did not perform any of the terms agreed on. All the bills were eventually paid : — It was held, that the failure of the bank was no reason why the comj)any should not have per- formed its part of the contract, and that Barber & Co. Avere not relieved from their guarantie (p). Stamping. By the Stamp Act, 1870, s. 48 (1), the term " bill of ex- change" for the purpose of the stamp duties includes {infer {») In re Agra Bank, Ex }Hirte Tondcur, L. R., 5 Eq. 160. \o) Prchn V. Liverpool Bank, L. R., 5 Ex. 92; 39 L. J., Exch. 41; In re General South American Company, Ex parte Jianco de Lima, 7 Ch. D. 537; 47 L. J., Chanc. 67; 37 L. T. 599; 26 W. R. 232. As to proving in winding-up companies, see Barned's Banking Company, L. R., 5 Ch. 167; KeUock'fi ease, L. R., 3 Ch. 767; Forivood's Claim, L. R., 6 Ch. 18. By the Judicature Act (38 & 39 Vict. c. 77), s. 10, the rules in a winding-up of a company are assimilated to those in bankruptcy. See In re West- bourne Grove Drapery Company, L. R., 5 Ch. D. 248; In re Suche, 1 Ch. D. 48; In re Withernsea Brickworks Company, 16 Ch. D. 337; T/tomas V. I'atcnt Lionite Company, 17 Ch. D. at p. 258. {p) Ex parte Agra Bank, In re Barber cj- Co., L. R., 9 Eq. 725; 39 L. J., Bank. 30. notes. LETTERS OF CREDIT AND CIRCULAR NOTES. 101 alia) a letter of credit, and any document or WTiting (except a bank note) entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money therein mentioned {q) ; but (4) a letter of credit granted in the United Kingdom authorizing drafts to be drawn out of the United Kingdom payable in the United Kingdom is exempt from duty. Circular notes are instruments similar to letters of credit, Circular drawn by bankers in this country upon their foreign cor- respondents, in favour of persons travelling abroad (r). The persons in whose favour these notes are granted usually carry with them gi letter containing their signature (called a letter of indication), for exhibition to the corre- spondents on presentation of the notes, and for comparison with the signature, which the holders are required to give before payment, in order to satisfy the correspondents of their identity. A banker is not bound to return the amount paid for a circular note so long as the note is outstanding, and there remains a possibility of his being called upon to pay a correspondent who may cash it. The banker, in such case, before he returns the money paid for the note, is entitled to receive a sufficient indemnity in respect of the outstanding note, which is only enforceable imder the terms of the 17 & 18 Yict. c. 125, s. 87. In case of its non-negotiation the banker is bound on the production of the circular note to return the money is) . {q) The 16 & 17 Vict. c. 59, Sched., defined a letter of credit to Le "a document or writing whereby any person to whom any such document is, or is intended to he, delivered or sent, shall he entitled, or be intended, to have credit with, or in account with, or to draw upon any other person for, or to receive from such other person, any money therein mentioned." Letters of credit were expressly chargeable with the stamp duty of one penny, imposed by that statute upon drafts payable to order on demand ; but letters of credit, whether drawn in set.s or not, which were sent by persons in the United Kingdom to persons abroad, authorizing drafts on the United Kingdom, were exempt. This statute is repealed. (r) Hare v. Copland, 13 Ir. Com. Law Rep. 443. (s) Conjlans Stone Quarry Company v. Parhcr, 37 L. J., C. P. 51; L. K., 3C. P. 1. 102 ORDERS TO BANKERS. OHAPTEE XVI. ORDERS TO BANKERS. I. Orders to Pay. Bills of Exchange. — We will next pass to the considera- tion of the duties of bankers, and their liabilities and rights, as regards bills of exchange made payable at their banking houses. General or Formerly, it was for a long time much disputed whether acceptance. ^ ^^^^ ^^ exchange drawn generally, but accepted payable at a particular place named on itf ought to be presented at that place, in order to ground a cause of action by the holder against the acceptor. At length this doubt was set at rest by a decision of the House of Lords, which de- clared the law to be, that an acceptance made payable at a specified place was a qualified acceptance, which im- posed upon the holder, in an action against the acceptor, the necessity of stating and proving presentment at that place, in order to recover on the bill {a). The Legislature, however, thought this part of the law required some alte- ration, and accordingly the statute 1 & 2 Geo. IV. c. 78, was passed, enacting, that an acceptance payable, on the face of it, at the house of a banker or other place shall be considered to be a general acceptance, unless it be ex- pressed to be payable there onhj, and not othencise or else- where {b). The statute, it is to be observed, only mentions acceptances ; it has been decided that a drawer cannot render the bill payable only at a particular place, by stating it to be so in the body of the instrument, so that (a) Jiour V. Yoiatff, 2 B. & E. IGo ; 2 Blis-h, 391. (h) The holder of a draft may refuse to take a sjoecial acceptance, and resort to the drawer at once. Gammo)i v. Sc/imolf, 5 Taunt. 353. A person who takes a qualified acceptance is bound to p-ivc notice to the drawer ; for iioii constat that he will assent to the qualified acceptance, see 9 M. & W. 509. A draft accepted i)ayablo at a banker's is not a .special or qualified acceptance, and is generally esteemed of higher com- mercial credit than a special or qualified acceptance, or an acceptance not made payable at a banker's. ORDERS TO PAY. IQ', a bill made by the drawer, payable at a particular place, is nevertheless accepted generally, unless the acceptor accepts it in the above terms, saying, that it shall be paid at that place only, and not otherwise or elsewhere (c). Since the statute there are three different modes (two of them, however, differing chiefly in form) in which a bill may be accepted; 1, generally; 2, payable at a banker's named ; 3, payable at a particular banker's only, or not otherwise or elsewhere ((/). Now, if the drawee accepts generally, there can be no doubt that he undertakes generally to pay the bill, at maturity, when presented to himself ; if he accepts in the second form, then the holder has the option either of presenting to the acceptor himself, or at the bankers specified, and that within banking hours ; for in that case the acceptor's undertaking is to pay the bill, at maturity, on its being presented in either way ; if the acceptor adopts the third mode, then, of course, he ex- cludes the holder from any other mode of presentment, than to the banker named, and that within banking hours (e). Hence, in suing an acceptor of a bill accepted payable at a banker's in the second mode, it is not neces- sary to allege or prove presentment there {e) . In suing the drawer, or an indorser, however, the case is different ; for, as against them, it is still necessary, if the bill is accepted payable at a banker's named by the acceptor, to prove presentment there (/) ; so if made payable in the body at a banker's and accepted generally (_/') ; and if the (r) Sclhy V. Eden, 3 Eing. 611 ; 11 Moore, 511 ; Faijlc v. Bird, 6 B. & C. 531. {d) It "will suffice to accept payable at such a bauk, "and not other- wise," without adding "only." Wu/glns v. Nichols, 7 Dowl. 551. {<■) mihtead V. Skclton, 5 Q. B. 92"; Bailey v. PorUr, 14 M. & W. 44. There is no objection, in declaring in an action against an acceptor, to a statement that the bill is accepted payable at a particular bankers, though, in fact, the acceptance is in the second foiin. Blaise v. Beau- mont, 4 M. & G. 7 ; 1 Dowl. (N. S.) C97. That the presentment must be made within baiJdng hoiu-s, see Farker v. Gordon, 7 East, 385 ; JFhitakcr V. Bank of England, 1 C, M. & E. 744; Wilkins v. Jadis, 2 B. & Ad. 188 ; it may be made after, if the bank is not shut, or if any one is there to say if there are no orders. Garnctt v. Woodcock, 6 M. & S. 44. (/) Gihh V. Mather, 8 Bing. 214 ; 2 C. & J. 251 ; Saul v. Jones, 1 El. k Bl. 59 ; 28 L. J., Q. B. 37. ORDERS TO BANKERS. bill is dmivn payable at a particular place, in order to cbarge the drawer, or an indorser, it is necessary to show a presentment at that place; for such must have been the case before the statute, and the statute was not intended to alter, and has not altered, the liability of drawers or in- dorsers of bills of exchange ; it is confined in its operation to acceptances alone {[/). If a bill of exchange is accepted, payable at bankers', and, in the course of business, is indorsed to the bankers, they, on suing the indorser, have no need to show that they presented it to the acceptor ; for, as the bankers, at whose house the bill was to be paid, were themselves the holders of it, it was a sufficient demand, for them to turn to their books and ascertain the state of the acceptor's account with them, and a sufficient refusal, to find that he had no effects in their hands {//) ; and a letter written, on the day when the bill became due to the indorser, on behalf of the bankers, stating the acceptor's bill to be un- paid, and requesting the indorser's immediate attention to it, is sufficient notice of dishonour {/i). Precisely the same has been laid down, as the law with respect to a promissory note, stated by the maker in a ')nemorandum to be payable at a banker's, to whom it was indorsed in the course of business, and who sued the indorser (/). Where the drawer of a bill of exchange, accepted gene- rally (subsequently to the passing of the 1 & 2 Greo. IV. c. 78), added the words "payable at R. & Co.'s, bankers, Loudon," without the knowledge of the acceptor, and then indorsed it for valuable consideration, the bill being over- due, and the indorsee privy to the alteration, the alteration was held to be a material one, and the acceptor was held to be discharged ; notwithstanding the argument which was iff) Hee Boi/dcll v. Harlcness, 3 C. B. 168; 4 D. & L. 179: Ilnn Tarker, 3 Tyrw. 370 ; Fm±i v. J-Jflffe, 1 C. & M. 429. (//) Bailci/ V, Porter, 14 M. & AV. 44. ('■) SnumlcrsoH v. J>((Iije, 2 II. Bl. 400. ORDERS TO PAY. 105 pressed, that, since the statute, this was only a general acceptance, and that no demand was necessary against the acceptor, and that, consequently, in an action by the indorsee against the acceptor, it was not possible to contend that he was prejudiced (/). A bill was accepted, payable at a bank, which was also that of the drawer ; the drawer discounted it with them, and indorsed to them ; they rediscounted, and, on maturity, paid it, without indicating to the holder whether they paid as indorsers, or as agents for the acceptor. The acceptor's account being overdrawn, the bank gave notice of dis- honour to the drawer, and he was debited with the amount. It was held, they had a right to pay the bill as indorsers, taking time to inquire if they W'ould honour the bill or not {m). Again, where a drawer, after getting a bill accepted, payable at his bankers, kept the bill by him for some years, during which period the bankers became bankrupt, and then having erased their names, and substituted the name of another banker, without the knowledge of the acceptor, indorsed the bill, it was decided that the acceptor was discharged, the alteration being considered to be mate- rial ()i). Whether an acceptance is or is not a conditional one is a question of law (o) . A bill of exchange was accepted " payable on giving up bill of lading for seventy-six bags of clover seed per Amazon, at the London and Westminster Bank, Borough Branch:" it was held, that this was a conditional accept- ance to this extent, that the holder was only entitled to receive the amount on delivering over to the acceptor the bill of lading, but that he was not bound to present the bill on the precise day on which it became due, and con- (/) Mackinfoi^h v. Haydon, R. & M. 362 ; see Burchfivld v. Moore, 23 L. J., Q. B. 261 ; 3 El. & Bl. 683. As to the effect of altering a nego- tiable instrument, see Master v. Miller, 1 Sm. L. Cas. 857, 8th ed., and notes thereto. (;«) Follard v. Ogden, 1 El. & Bl. 459. («) Tidmarsh v. Grocer, 1 M. & S. 735. (o) Sjjroid V. Mathews, 1 T. R. 182. 106 ORDERS TO BANKERS. sequently tliat the acceptor was not released from his liability (p). The fact of returning a bill, accepted payable at the acceptor's bankers, to the indorsee's bankers, at the Clear- ing House, with "orders not to pay'.' wiitten on it, and " cancelled by mistake" also, does not enable the indorsee to recover against the bankers, as for money had and re- ceived ; but if the bankers have been guilty of negligence or want of due and reasonable care, and special damage has accrued therefrom to the holder, an action may be maiutained against them {q) . If a bill is accepted, payable at a particular town, pre- sentment, it is said, at all the banking houses in the town is sufficient (>■). If a bill is made payable at a particular bank by the acceptor, then, in an action by the indorser against the drawer, it is not necessary to allege a presentment to the acceptor at the bank; it has been decided to be enough to aver the presentment to have been made there (s) . As has been stated, where a bill is accepted payable at a banker's, and the acceptor's address also appears on the bill, the holder has not the option of presenting either at the place named in the addi-ess or at the place named in the acceptance, in order to charge the dmn-er or an indorser ; but he must present it at the place indicated by the accept- ance, viz., at the particular banker's mentioned {t) . If, how- ever, the holder presents at the bank, and is refused pay- ment, he may sue the other parties to the bill Avitliout any other presentment {u). An acceptor, having funds to meet {p) Smith V. Vcrtue, 9 C. B., N. S. 214 ; 30 L. J., 0. P. 56. See also Banbury v. Zinsctl, 2 Str. 1211 ; Smtt/i v. Ahhott, ib. 1152. [q) JFaniickw. Itofjers, 5 M. & G. 310; Wilkinson v. Johnston, 3 B. «& C. 428 ; Ingham v. I'rimrose, 28 L. J., C. P. 204 ; Xovelti v. liossi, 2 B. & Ad. 757; Eapcr v. Birkheek, 15 East, 17; J'lincc v. Oriental Bank Corpora- tion, L. R., 3 App. Gas. 325 ; 2G W. P. 543. Ir) llarchjy. Woudroofe, 2 Stark. 319. (s) Shelton v. Braithicaite, 8 M. & W. 252 ; Bhilpot v. Bryant, 3 C. & P. 244. {t) Saul V. Jones, 1 El. & Bl. 69 ; 28 L. J., Q. B. 37. (m) Mackintosh v. Hai/don, R. & M. 362 ; Ilankcy v. Bcruick, 4 Bing. 135. ORDERS TO PAY. 107 the bill in tlie bankers' hands, is, it is submitted, not exonerated if thej fail after the maturity of the bill, but before it has been presented, provided the holder has not been guilty of laches (.r). A bill, dated September 8th, 1856, was drawn on B. & Co., payable in London at four months after date. It was accepted as follows : " Accepted payable at Messrs. Over- end, Gurney & Co., London. No. 1756. Due 11th Dec. 1856. B. & Co.:" it was held, that the words " Due 11th Dec. 1856," did not quahfy the acceptance, but were, at most, an inaccurate description of the date of the bill (y). A person who accepts a bill, payable at his bankers', is held thereby to give autliority to the bankers to apply to the payment of it any funds of his in their hands, and there is no necessity for them to have any other or more specific authorization than the terms of the acceptance itself (:;). Bankers refusing to pay such an instrument when presented are liable to be sued by their customers («) . The like authority would also be given to pay a promissory note which the customer has made payable at his bankers'. But from what has already been laid down, to the effect that bankers are bound to know the handwriting of their customer, it is manifest they would not be exonerated if they paid the bill or note, and it turned out that the bill or note was forged {b). BUI, to whom 'payahle. — A banker paying a bill, accepted Bill, to whom by a customer as above, and bearing an indorsement pur- ^^^^ ^' porting to be in the handwriting of the payee, but being, {x) Scbag V. Abiihol, 4 M. & S. 462 ; Turner v. Umjdon, 4 B. & C. 1 ; Ehodes \. Gent, 6 B. & A. 246. {y) Fanshau-e v. Feet, 2 H. & N. 1 ; 26 L. J., Exch. 314. (s) Kijmer v. Laurie, 18 L. J., Q. B. 218. The bankers cannot sue on the bill, for it is functus officio, by the law merchant, when once paid by or on the behalf of the acceptor. See also Whit taker v. BanJc of Fiujland, 1 C. M. &R. 744; Farleii v. Turner, 26 L. J., Chanc. 710. (a) mil V. Smith, 12 M. & W. 618 ; Bell v. Carey, 8 C. B. 887. (A) Smith V. Mercer, 6 Taunt. 76; 1 Marsh. 453; Woods t. Thiedeman, 1 H. & C. 478. ORDERS TO BANKERS. in fact, a forgery, and being accepted after this and other indorsements had been made on the bill, and presented at the Clearing House by a banking firm, who were indorsees, was not, it has been held, justified, by reason of such forged indorsement, in paying to the holder or indorsee, who could not give a legal discharge, and consequently the banker could not debit the account of the acceptor with the sum paid (c) . As to his right to recover as against the holder of the bill the rule would seem to be that he is so entitled, if the forgery has been immediately discovered, and notice given to the holder (d). If, when a person accepts a bill payable at his bankers', his account with them is in such a state as not to be ade- quate to pay the whole amount for which the bill is ac- cepted, and they pay the whole amount, for the honour of their customer, they would be entitled to recover from the customer the difference between the amount of his moneys in their hands, and the sum in the bill, either as so much money lent to him, or paid for his use. But in order to recover the amount, the bankers must prove the indorse- ment by the payee, as well as the acceptance by their customer ; if either is a forgery, they will not be en- titled (^). A banker, receiving a sum for the express purpose of taking up a bill made payable at his bank (which purpose should be expressed in writing in order to avoid any ques- tion as to proper authority), without objection at the time, cannot apply it to discharge the amount by which the customer paying in the money has overdrawn his account, nor ought he to pay cheques, drawn subsequently to the bill, before he pays it (/). i?/// icJien paid. — Next, when is a bill made payable at a banker's said to be paid ? Now, in a case of a contract {c) Tuclcer v. Roharts, IG Q. B. 5G0 ; Hall v. Fuller, 6 B. & C. 750. (d) Cox V. Masterman, 9 B. & C. 902 ; Smith v. 3rerccr, 6 Taunt. 76. {e) Forstry v. C/finoifs, 2 Camp. 1 7. (/) Be Bcrnaks v. Fidlo; 14 East, oOO, u. ORDERS TO PAY. 109 to pay money, that can only properly be called payment, which is payment according to, and in the terms of, the contract (/) ; so that payment, by a stranger, does not discharge the party contracting to pay, unless made by the stranger as his agent, and with liis prior authority or subsequent ratification. Hence, payment by a stranger of the amount of a bill of exchange to the bankers, at whose house it was made payable by the acceptance, under an arrangement with them, whereby the person paying obtained possession of the bill for a collateral purpose of his own, is not a payment of the bill by the acceptor {g). Payment of Bills of Exchange by Cheques Provisional Payment by or Absolute.— T\iQ branch bank of the Bank of England ^^^i^^? P™' o visional or at Newcastle discounted a bill of exchange drawn by a absolute, customer upon H. & Co., and accepted by them payable at the bank of L. & Co., also bankers at Newcastle. Ac- cording to the practice prevailing among bankers at New- castle, the branch bank, on the morning when the bill became due, took it to L. & Co., who marked it for pay- ment, and gave a credit note, indicating that it with other moneys was in order for payment and would be paid. About 2 P.M. on the same day, a clerk of the branch bank, in accordance with the practice, took all the cheques which had been received, drawn on L. & Co., together with the credit note, to the bank of L. & Co. The credit note was admitted into the total amount, and a cheque upon the branch bank was in accordance with the practice handed by L. & Co. to the clerk for the amount of the balance due to the branch bank. At 3 p.m. the banks at Newcastle close to the public, but it is the practice for the bankers who keep accounts with the branch bank to attend at such bank, before it finally closes for the day at 4 p.m., (/) Simpson V. Efjgington, 24 L. J., Exch. 313; 10 Exch. 845; Church V. Bishop, 2 Ves. sen. 272 ; Smith v. Craven, 1 C. «& J. 500. [g) Dtacon v. Stodhart, 2 M. & G. 317: see Cook v. Lister, 13 C. B., N. S. 543; 32 L. J., C. P. 121. 110 ORDERS TO BANKERS. for tlie purpose of having the day's accounts investigated, and of rectifying any mistakes or errors which may have arisen in the course of the day, and finding and striking the final balances between them. When the bank of L. & Co, closed at 3 o'clock it was ascertained that H. & Co. had stopped payment, and that their balance was not suffi- cient .to meet the bill. Notice was at once and before 4 P.M. given to the branch bank that the bill had been paid in en'or, and they were requested to take it back. Before such notice was received, the account of L. & Co. had been debited with the amount in the accounts of the branch bank. The Court held, that as it was not shown that the giving the cheque was provisional only, or subject to recti- fication upon going over the accounts later in the day, such giving the cheque by L. & Co. amounted to payment of the bill of exchange to the branch of the Bank of Eng- land, and that the customer was entitled to have credit with them for the amount of the bill (/) . Refufsal to pay- lief used to pay. — No action will Ke by the holder against a banker for refusing to pay a bill so accepted, there being no privity between them (/.•) . Specific ap- propriation of moneys to take up bills. Specific Appropriation of Moueijs to talx np Bills. — But money paid in, by a customer, expressly for the purpose of meeting a bill, accepted by him, and lying at the bank for payment, is, so far as he is concerned, money paid and received to the use of the holder of the bill, and cannot be applied to the general account of the customer (/). But where a person paid a sum into a country bankers' with written directions to apply it to meet a bill of ex- change payable the next day at the country bankers' (i) Pollard v. Hank of Hiioland, 40 L. J., Q. B. 233: L. R., G Q. B. 623. (k) Stewart v. Fry, 1 Moore, 74 ; 7 Taunt. 339 ; Eill v. Eomh, L. E., 8Eq. 290; 38 L. J., Ch. 538. (0 De Jhrtiales v. Fulhr, 14 EaHt, 590, n. ; J{iU v. S»iU/i, 12 M. k W. G18 ; Fiirlr;/ v. Tnnicr, 26 L. J., Chanc. 710. ORDERS TO PAY. Ill London agents, and tlie country bankers stopped pajmient the next day without having advised their London agents of the payment of the sum, and the bill on being presented was dishonoured, and the country bankers having made no specific appropriation of the sioii, he was only entitled to prove as a general creditor (/;«). Customers of country bankers paid in to the bankers' a sum of money in bank notes, and also some bills of ex- change, to be remitted to London in order to meet certain acceptances. The bankers sent to their London agents the bills, and some bank notes, with a letter du-ecting them to pay a certain sum of money, also giving them notice of the acceptances as payable at their bank, and giving direc- tions as to other business. The country bankers stopped payment, owing a large balance to the London bankers : — Held that, as between the country customers and the London bankers, there was no appropriation of the bills and notes to meet the acceptances, and that the London bankers could retain the bills and notes without meeting the acceptances (n) . Cancellation by Bankers hy Mistal;c. — If a banker, at Cancellatlou whose house a bill is accepted payable, by mistake (not ^ ""*' ^ ^' under circumstances showing want of due care) cancels the acceptance and refuses to pay the bill, he does not neces- sarily render himself liable to the holder, in an action on the case, or otherwise ; for instance, he will not be liable, if he has no effects of the acceptor's to meet the bill(o). Where, on the other hand, he has been guilty of such (>«) Moore v. Biishell, 27 L. J., Exch. 3; Farley v. Turner, supra; Hill V. Eoyds, supra. See also Thompson v. Simpson, L. R., 5 Ch. App. 659 ; Louisiana Bank v. Bank of New Orleans, L. E., 6 H. L. Cas. 352 ; Barned^s Banking Company, In re, Massey, Ex parte, 39 L. J., Chanc. 635. (w) Johnson v. Eolaris, L. R., 10 Ch. App. 505; 44 L. J., Chanc. 678. (o) NoveUi V. Eossi, 2 B. & Ad. 757; Warwick v. Rogers, 5 M. & G. 340, 352. Though the right to sue on bills is generally destroyed by cancellation, other rights ai'e not necessarily so affected. See Yglesias v. Mercantile Plate Bank, 3 C. P. D. 60, 330. 112 ORDERS TO BANKERS. want of due care, and damage has ensued in consequence to the holder, an action will lie against him (p). Refusal to take. -Bill payable in case of need. Refusal to take. — The holder of a hill may refuse, as has already been stated, to take a special or a qualified acceptance ; on the other hand, an acceptor may refuse to pay a bill, which, after a general acceptance by him, has been, without his consent, altered so as to appear to be payable at a banker's. The ground is, that the contract is, by the alteration, made a different one from that into which he entered (§'). But it does not appear that such an alteration of the bill, as an acceptance by mistake, c. ^., as in the last paragraph, operates to affect in any way the liabilities of the other parties to the bill, both because such is not, it is believed, the usage of merchants, and because such alteration does not, in fact, vary the con- tract into which the other parties entered, with respect to the bill ; for the liability, which they originally undertook, was to pay the bill, in case the drawee did not, and the refusal to accept merely ascertains and announces that he wUl not make himself liable to pay. It is, therefore, sub- mitted, that such alteration is not a material alteration, within the meaning of tlie principle as applied to deeds and contracts, so as to destroy the validity of the instru- ment in toto (>•). The holders of a bill, through their agents in London, presented it at the bank at which it was made payable by the acceptor ; on its being dishonoured, they further pre- sented it at the bank at which it had been specially in- dorsed payable " in case of need " by the indorsers ; there also it was dishonoured. The agents, on the same day, sent the bill by post to the holders in Liverpool, who, on the day following, sent it to the indorsers ; the Court held, (;;) See Ingham v. Fnim-osc, 28 L. J., C. P. 294; 7 C. B., N. S. 82. As to cancellation by mistake by other parties not (lestroyinij a bill, see Jiaperv. Birkbcck, 15 East, 17; Davidson v. Cooper, 1 1 M. & W. 778. {q) Burch field v. Moore, 23 L. J., Q B. 2G1 ; 3 El. k Bl. 683. (V) ]\irni V. Nicholson, 13 M. & "W. 780. ORDERS TO PAY. • 113 that no sufficient notice of dishonour had been given in the first instance, and that the actual notice was a day too late (s). Promissory Notes. — Promissory notes, it should be ob- Promissory served, are not within the above-mentioned statute 1 & 2 °° ^^' Greo. IV. c. 78 ; the consequence is, to make it necessary, in suing on a promissory note made payable in the body of it at a bank, to aver in the statement of claim present- ment at the bank (t), and to prove it at the trial, if denied; and, in this respect, there is no distinction between notes which are negotiable and those which are not {ii). Where, however, the place of payment is not mentioned in the hodij of the note, but merely in a memorandum at the foot, then it is no part of the contract that the note should be payable at the bank, or place mentioned, and it is not necessary to present {.v), or allege presentment (y). When a promissory note is made payable at a banking house, it is not necessary to prove that the banker had notice of its dishonour (~) . »II. Orders other than mere Orders to pay. Hitherto we have been considering those orders to pay commonly coming under a banker's notice, but besides these there are other orders respecting the funds of a customer, not strictly orders to pay, and less frequently to be met ^ith in practice. The first of these are what (.v) In re Leeds Banh'uig Comjiaiuj, Ex parte Praiuje, L. R., 1 Eq. 1 ; 35 L. J., Chanc. 33. (0 EmbVui V. DartneU, 12 M. & W. 830; Vanderdoncktv. ThvUttsson, 19 L. J., C. P. 13 ; 8 C. B. 812 ; Sands v. CJarJc, 8 C. B. 751. («) Spindler v. Grellett, 1 Exch. 384. \x) Williams v. Waring, 10 B. & C. 2. ((/) Saunderson v. Judge, 2 H. Bl. 510; Masters v. Baretto, 19 L. J., C. P. 50; ^^r Lord Campbell, C. J., in Warrington v. Earh/, 23 L. J., Q. B. 48. {z) Tearse v. reinberthy, 3 Camp. 261 ; Smith v. Thatcher, 4 B. & Aid. 200. 114 OllDERS TO BANKERS. may be termed orders in tlie nature of an appropriation or assignment of funds in favour of a third party. Questions frequently arise as to liow far a banker who has received an order to appropriate certain funds of his customer in favour of a third party, which order has been subsequently countermanded, is justified in nevertheless making the payment. Before the Judicature Acts, the rule in law apparently was this : — If the revocation was made before the banker had assented to the appropriation, and before that assent had been communicated to the payee, the banker was bound to act upon it; and if he made the payment he did it at his risk, and could not charge his customer therewith {a) ; the reason of this being that until the assent had been given and communicated to the payee no property in the funds passed to him, and the customer's right of control over them still continued (^>). In equity, the assent of (f), or even the communication to, the banker was immaterial (r/), so far as the assignee's right as against the assignor went, for an order given by a debtor to his creditor upon funds in the hands of a third party has always been held to be sufficient to constitute an equitable assignment (•). To receive Order to receive Dmdends. — By the Stamp Act, 1870, s. 103, a letter or power of attorney for the sale, transfer or acceptance of any of the government or parliamentary stocks or funds, duly stamped for that purpose is not to be charged with any further duty by reason of containing an authority for the receipt of the dividends on the same stocks or funds («). And by sect. 104, a writing under hand only containing an order, request or direction from the owner or proprietor of any stock to any company or to any officer of any company, or to any banker, to pay the dividends or interest arising from any such stock to any person therein named, is not chargeable with duty as a letter or power of attorney. But although such order, request or direction is not liable to stamp duty as a letter or power of attorney, it requires to be stamped as an order [p) Gibson v. Minet, 2 Bing. 7 ; Williams v. Everett, 14 East, 592 ; Scott V. I'orcher, 3 Mer. 652 ; Lilli/ v. Ilays, 5 A. & E. 548 ; Briud v. Hamp- shire, 1 M. & W. 372. {q) Frilhling v. Schroeder, 2 Bing. N. C. 77 ; Walker v. Eostron, 9 M. & W. 411, 421. (/•) Morgan v. Lariviere, L. R,, 7 H. L. 423; 44 L. J., Ch. 457. («) In the schedule, a letter or power of attorney or other instrument in the natiu-o thereof is chargeable as follows : — • (3.) For the receipt of the dividends or interest of any stock, — Where made for the receipt of one payment oiily, Is. In any other case, 5.v. ORDERS OTHKR THAN MERE ORDERS TO PAY. 117 for money payable on demand under sect. 48 (3) . When bankers hold a power of attorney from the trustee of a married woman to receive and pay to her the dividends on government stock settled to her separate use, it will be no payment, if they pay the dividends to her creditors or nominees at her request (?"). Banlier as SfaJceholder. — In considering the position of Banker acting the parties concerned where money has been paid into a bolder ^" bank to abide the issue of an event it is necessary to call attention to the Act 8 & 9 Yict. c. 109, s. 18. By that act it is enacted that all contracts or agreements, whether by parol or in writing, by way of gaming or wagering shall be null and void ; and no suit shall be brought or maintained, in any court of law or equity, for recovering any sum of money or valuable thing, alleged to have been won upon any wager, or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made. And by sect. 18 it is provided that the preceding enactment shall not apply to a subscription or agreement to subscribe, or contribute for, or towards, any plate, prize or sum of money to be awarded to the winner of any lawful game. The effect of the words "no suit shall be brought or maintained," &c., is to prohibit the recovery by the winner from the loser of money which has been won in such a transaction as that mentioned in that part of the section, or which has been deposited by such loser in the hands of a stakeholder to abide the event ; and the statute does not apply to cases wherein the party seeks to recover his own stake upon a repudiation of the wagering contract ; either party being able to recover the sum he himself has deposited, although he does not demand it till after the event (ii). (i) Clerk v. Laurie, 1 H. & N. 452. («) Biggie v. Higgs, L. R., 2 Ex. D. 422 ; 2.) W. R. 777. See also Ifnmpdai v. JFrihs/i, L. E., 1 Q. B. D. 189; 24 AV. E. G07 ; Thac/ar r. llardg, 4 Q. B. D. G8.5. 118 ORDERS TO BANKERS. To obtain Order to ohtalii Acceptcuwe. — If a person delivers a bill accep ance. ^^ exchange to liis bankers to get accepted for him (he being payee), and acceptance is refused, but they omit to communicate the circumstance to the depositor, he has a right of action against them, and may recover da- mages in proportion to the injury he can show he has siLstained (f). To accept _ Order to accept Drafts against Bills of Lading. — A bills of ° banker, receiving instructions from his customer to accept lading, yilh, of exchange which a correspondent of his would draw against bills of lading, is not bound to ascertain the genuineness of the bills of lading before accepting or paying the bills of exchange ; and if the banker pays the bills, although the bills of lading should afterwards turn out to be forgeries, he will be entitled to recover from his customer what he may have paid in respect of the bills of exchange {u). To transfer to Order to transfer or place to Credit of Another. — We another. iiext investigate the effect of an order given by a customer to his bankers, directing them to transfer a sum of money from his account to the credit of another person, who also banks with them. A., is debtor to B. A., with the consent of B., desires his bankers, who also are the bankers of B., to place to the credit of B., a sum of money (for goods sold), so as to make the transaction similar to a bill of exchange at one month, which the bankers consent to do, but only consider it as a payment to be made at a future day. Such a transaction does not amount to a payment ; and where the bankers became bankrupt before the day on which the credit would expire, tlio Court held that A. was not discharged by such inchoate payment (,r) . (0 Van Wart v. WuoUcij, 3 B. & C. 439. («) Woods V. ThitdemaHu, 1 11. & C. 478. Vhhr Bank v. Synnott, 5 Ir. R., Eq. o9.5, is to the same cifect. (.'•) Pcddvr V. Watts, 2 Chit. GIO. ORDERS OTHER THAN MERE ORDERS TO PAY. 11j>, 15 M. & W. 37 ; Cavanagli on Money Securities, p. 40. See also Moore V. Ulster Banking Conipan;/, 11 Ir. R., C. L. 512. (p) Miller y. Austen, 13 Howard, U."S. Kop. 218. (q) Jfewitt V. Ji'ai/c, L. R., G Eq. 198. Sec also In re Mead, 15 Cli. D. G51. (r) Pott V. Clo,,/, IG M. .V W. nil. FORGING. 131 Forging. — Altering the sum, for whicli an accountable Forgiug. receipt is given, is an altering in a material part, and in- dictable as a forgery (s). By 24 & 25 Yict. c. 98, s. 23, it is felony to forge an accountable receipt, whether for money or for goods, or for any note, bill, or other security for the payment of money, or any indorsement on, or assignment of, any such ac- countable receipt ; and so is the altering, or offering, utter- ing, disposing of, or putting off, knowing the same to be forged or altered, any such accountable receipt, with in- tent to defraud. The punishment for these offences is either penal servitude for life, or for a term of five years (27 & 28 Yict. c. 47), or imprisonment for a period not exceeding two years, with or without hard labour, and with or without solitary confinement. Where it was the practice of a bank to treat a receipt, with the depositor's name thereon, as an order for the payment of the money deposited and interest upon the receipt being presented to the bank ; and a person took the receipt to the bank, and, having written the depositor's name thereon, delivered it to the bankers, who paid him the principal and interest due thereon : it was held, that he was properly convicted, as for a forgery of an order for the payment of money (/) . A person producing a forged receipt, purporting to be a receipt for poor rates due from A., for the purpose of in- ducing the prosecutor to send money to A. as a respon- sible person, is within the above statute, for it is not neces- sary that money should be obtained directly upon it, or by the utterer at all {u). A writing, purporting to authorize the bearer to receive money deposited in a bank by a friendly society on ac- countable receipts, and purporting to be signed by the principal officers of the society, may be alleged, in an (.s) Reg. V. Johnston, 5 Cox, C. C. 133. [t\ Rcq. V. Atkinson, Car. & M. 325. 00 Heff. V. Ion, 2 Den. C. C. 475 ; 21 L. J., M. C. 166. k2 132 ACCOUNTABLE OR DEPOSIT RECEIPTS. indictment for forgery, to be a warrant for the payment of money {x). Obtaiuing by Obtaining hy False Pretences. — By 24 & 25 Vict. c. 96, tences*^^" ^- ^^' ^^ ^^ indictable to procure, by any false pretence, an accountable receipt to be delivered to another person for the use or benefit of the person making the false pre- tence {y). {x) Reg. V. Roberts, 2 Mood. C. C. 258. (y) See Reg. v. Garrett, 23 L. J., M. C. 20. ( 133 ) CHAPTER XYIII. THE RELATION OF BANKER AND CORRESPONDENT. It frequently happens in questions of banking law that the incidence of a loss has to he determined as between two parties, who are both equally innocent of fraud, or crime, in the transaction. More especially is this the case in questions arising on dealings of a customer with his bankers, who are obliged, in order to complete the in- tended transaction, to employ the agency of theii* cor- respondents — other banking houses carrying on business at a distance. Thus, if a customer employs his bankers to perform some duty for him, which can only be brought to a con- clusion in some place at a distance, whether in this country or in foreign parts, so that it becomes necessary for them to employ the agency of persons acting there, and a loss ensues from the conduct of such agents, whether direct or intermediate, and the question arises whether the customer or the bankers are to bear that loss, in all such cases it is the bankers who must suffer ; for, of the two, they are the parties whose conduct has led to the loss ; it was they who chose the agents, or who chose the correspondents who selected the actual agents; it is their act, therefore, which has led to the occurrences which have caused the loss, and for that loss, as between themselves and the customer, they must be liable ; in other words, the customer has a right of action against them, and vdW, in a Comi of law, be compensated for the injury he has sustained. The bankers, however, will have a right of recourse against their correspondents, by whose laches or default, either 134 THE RELATION OF BANKER AND CORRESPONDENT. primarily or througli the default of any one whom the latter may have entrusted with the business, the bankers have incurred the loss. The following case well illustrates this position : — A customer of a bank sent orders to his bankers to obtain for him payment of a bill of exchange, drawn by him on a person in Calcutta ; the bankers accepted the employment, and wrote to him word that they had done so, promising to credit him with the amount of the bill when received. In the usual course they transmitted the bill to their correspondents in London, by whom it was forwarded to the house of A., in Calcutta, to get payment ; it Avas paid into A.'s, immediately after which they failed. The customer having been advised, by his bankers, that the bill was paid, they were held to be his agents to obtain payment, and it was also decided that, ipso facto, upon payment being made, they became liable to him for the amount received; and that any loss which might arise from the conduct of the bankers' sub-agents, between whom and himself no privity was established, must fall on the bankers [a) . And the case was said not to be dis- tinguishable from the case of a customer of a bank in London sending them a bill or a cheque, with orders to get payment, and their clearing-house clerk, instead of returning with the balance, absconds ; in which case the bankers would clearly be liable to the customer for the amount of the bill [h). Also, the state of the accounts, between the customer's bankers and any of the correspondents they may employ in the transaction, can make no difference. Hence, in all cases where a customer desires his bankers to obtain payment of a bill for him, and they do not refuse, or if a stranger makes the same request, and they agree to perform it, they are liable for the amount of the bill, («) Mackersy v. Ramsaij, 9 C. & F. 818. (A) Per Lord Lyndhnrst, C, id. 818. THE RELATION OF BAMvER AND CORRESPONDENT. 135 wliether, after remitting it to their correspondents, to get the payment, its amount is returned to them or not, provided, in the latter case, the cause is the default of their correspondents. Some country bankers pay the London banker, who acts as their agent and correspondent, a fixed annual sum for conducting their agency business. Others allow a commission on the amount of the transactions during the year. There are many country bankers who pay no com- mission, but leave a sum of money in the hands of their London agents, in the nature of a deposit, against which they are not permitted to draw. In such cases this sum is altogether withdrawn from the general account of the country banker, and placed to another, called the deposit account. A question arising upon a remittance through a bank may be mentioned here, as one of great practical import- ance ; viz., if a customer of a country bank, who already has a balance in his favour on his account with them, pays in a further sum of 7071., with directions in writing that 500/. of it was to be paid into Messrs. Eobarts' bank in London to meet a bill of exchange accepted by him, and the 707/. is carried by the country bank to his general account with them, and the 500/. is paid into E-obarts', but, before the bill becomes due, the country bank stops payment ; whether such 500/. is available for the general creditors of the country bank or is so speciJicaJl// cq^j^rO' priated to be apjolied in a particulav way as to remain the property of the customer at the time of the closing of the country bank ; and, under the above circumstances, the latter has been held to be the case (c). But, on the other hand, where there is no specific appro- priation it is otherwise : so where M. paid a sum of money into a country bankers', with written directions to apply it to meet a bill payable the next day at their London agents, (c) Farley v. Turner, 26 L. J., Chanc. 710. See also BarkworlJi y. merman, 6 H. & N. 605. THE RELATION OF BANKER AND CORRESPONDENT. and the country bankers stopped payment the next day without having advised their London agents of the pay- ment, and the hill, on being presented, was dishonoured, as the country bankers had made no specific ap2))'02)nafion of the sum, he was only entitled to prove as a general creditor on their estate (d). Privity. — As between a banker and the customer of his correspondent there is no privity ; consequently where one sent to a banker from his correspondent, the former takes them subject to the instructions of the correspondent and not of the correspondent's customer ; so where a customer of a country bankers paid in to the bankers a sum of money in bank notes and also some bills of exchange to be remitted to London in order to meet certain acceptances, and the bankers sent to their London agents the bills and some bank notes, with a letter directing them to pay a certain sum of money, also giving them notice of the acceptances as payable at their bank, and giving directions as to other business, and the country bankers stopped pay- ment, owing a large balance to the London bankers : it was held that, as between the country customers and the London bankers there was no appropriation of the bills and notes to meet the acceptances, and that the London bankers could retain the bills and notes without meeting the acceptances {e) . Where an acceptor of a bill paid money to his bankers (at whose correspondents' house it was payable), for the purpose of taking it and other bills up, and they promised him to apply it to such purposes, and also entered the particular bill to their credit in their books, but they had {(l) In re BarneiVs Banking Cumpanij, Ex parte Mas^eij, 39 L. J., Chauc. 635. See also ThoippHon v. Simpson, L. K., 5 Ch. App. C59 ; Citizens Jiank of Luxisiana v. Bank of New Orleans, L. II., 6 H. L. Cas. 3")2 ; Ex parte Ifaring, 3G L. J., Chanc. 151 ; 19 Ves. 349 ; Ex parte Smart, L. R., 8 Ch. 220 ; 42 L. J., Bank. 22; Ex parte Dcwhurst, L. R., 8 Ch. 965; 42 L. J., Bank. 47. {e) Johnson v. lioharts, L. R., 10 Ch. App. 505 ; 44 L. J., Ch. 078 ; 23 W. R. 703. THE RELATION OF BANKER AND CORRESPONDENT. 137 not advised their correspondents to pay it : the Court held, that the drawer of the bill, who was also the holder of the bill, could not sue the bankers for the amount of the bill, as there was no privity between the drawer and the bankers to sustain the action (/). The object of the transmission of a bill for presentation for acceptance and payment by a principal to his agent being to obtain the acceptance and the payment of the bill, or, if it is not accepted, to guard the rights of the principal against the drawer, in case recourse is to be had to the drawer, the duty of the agent must be measured by these considerations, and the duty of the agent is to obtain acceptance of the bill, if possible, but not to press unduly for acceptance, provided he obtains acceptance or a refusal ^vithin the time, which will preserve the rights of the principal against the drawer {[/) . We may conclude by mentioning the following decision, which is one of practical utility : — A bill of exchange was sent by a bank in the United States to a bank in Toronto, Canada, for collection and remittance, accompanying which was a bill of lading for 10,000 bushels of wheat, which, on the bill of exchange being accepted by the drawees, was delivered over to them, they being the consignees named in the bill of lading : it was held, that it was not the duty of the bank in Canada, as the agent of the American bank, in the absence of special instructions, to retain the bill of lading until the bill of exchange was paid (h) . (/) Moore v. Bushell, 27 L. J., Ex. 3. {g) Bank of Van Diemoi's Land v. Bank of Victoria, L. E., 3 P. C. 526; 40 L. J., P. C. 28. (A) Wisconsin Marine Company Bank v. Bank of British Xorth America, 10 Upper Canada, Law Journal, 151 ; it is the decision of the highest Court of Appeal in that colony. ( i38 ) CHAPTER XIX. DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. We will next trace the rules of law which regulate the obligations and rights of bankers, with respect to bills of exchange and other securities deposited with them by their customers and others. Questions of this nature commonly arise between the customer, or other depositor, on the one hand, and the trustee of the bankers, upon their bank- ruptcy, on the other. The deposit of securities for safe custody will be considered in the next chapter. Special Purposes. — The primary or general rule is, that when a banker is employed as an agent, with whom undue bills are deposited by the customer, in order that the banker may receive the proceeds, when the bills be- come due, or for any other specific piu-pose (a), and the banker becomes bankrupt, having the bills entrusted to him remaining in specie in his hands, they continue the property of the customer, and do not pass to the trustee, and he may reclaim them in specie from the trustee. But, on the other hand, if bills of exchange are remitted to the banker on the general account between him and the customer, and are not distinguished from the cash items of the account, they cannot be reclaimed by the customer from the trustee. In other words, if the relation of the customer and the banker was that of principal and agent with respect to the bills at the time of the latter's bank- ruptcy, the customer may recover in trover from the trustee ; if the relation had passed into that of debtor and creditor at the time of the bankruptcy, then the customer («) B'-lchery. Campbell, 8 Q. B. 11. BILLS OF EXCHANGE. 139 has no sucli riglit of action against the trustee {h), although the customer might, of course, have sued the banker for the amount of the bills, as soon as they were entered as cash to the customer's credit, and the books of the banker would have been evidence against him on this point. This general rule, that bills deposited or remitted for the pui'pose of the banker's receiving the proceeds when due continue the property of the customer, if, at the time of the bankruptcy, they remain in specie in the hands of the banker, will be applied in all cases where there is no bargain between the customer and the banker, that, as soon as the bills reached the banker, the property in them should be changed ; and such bargain cannot be inferred from circumstances which fail to show any consideration for the customer's assent, as it would be unreasonable in the banker to ask, and imprudent in the customer to accede to, such terms, in the absence of a consideration. In one case (which has been fully confirmed) the course of dealing between the customer and the bank, and the usage of the banking trade throughout the county (of Lan- caster), was shown to be in accordance with the following facts : — The account was kept in this form in the pass-book or banking book. A. B. (the customer), in account with C. D. (the banker). Dr. 1821. July 4.— To Bank.. „ 5.— To Draft £ s. d. 80 100 Cr. 1821. £ s. d. July 1.— By Balance.. 1,300 ,, 2.— By Bills .... 750 At the end of every half-year an account was sent in to the customer from the banker. In the account of Christ- {b) Hx parte OitrseU, Amhler, 237; Ex parte Sarjeant, 1 Rose, 153, -which are applications of the above rule of law to the several facts of those cases. The general i-ule is established by Scott v. Stirman, Willcs, 400 ; Bolton V. FtoUer, 1 B. & P. 539 ; Thompson v. Giks, 2 B. & C. 422 ; con- finned in Ex parte Aikh/s, 3 M., D. & De G. 103 ; and in Ex parte Barl- u-orth, In re Harrison, 2 De G. & J. 194 ; 27 L. J., Bank. 5. DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. mas, 1821, and also in the pass-book, a bill for 689/. 19s. was included, being one of several bills paid in on tbe 10th of December, 1821, and it formed part of the cash balance of 911/. 2s. 5d. therein stated to be due to the customer. When the customers paid bills into the bank the usage was, that (provided the banker approved of the bills) they were never written short (c), but entered on the day they u-ere paid in, both in the pass-book and in the books of the bank, to the credit of the customer, in the form above stated ; and after such entry, the customer was at liberty to draw to the full amount appearing to his credit, by cheques on the bank. Bills disapproved of were not so entered, but were sometimes returned, some- times deposited till due. A/l bilk so entered, whether made speeialty jxtyable to the customer or not, icere indorsed by him, or if, for any private reasons, he did not wish his name to appear on the bills, a letter was given to the bank, acknowledging himself to be equally liable as if he had indorsed. An interest account was kept not in the pass- book, but in the books of the bank, in wJiich the customer was debited with intere^, on each cash payment to him, from the date of the payment ; and on each j)ayment in bills, from the period when the bills were due and paid ; and, on the other hand, he had credit for interest from the date of each cash payment by him, and from the period when each bill paid in by him became due and was paid. As the accounts were balanced half-yearly, if a bill was paid in which did not become due before the end of the half-year, the customer was debited with the interest up to the time when the bill was due. The balance only of the interest was entered in the pass-book, and this was the usual mode of keeping an interest account. If only the undue bills paid in by the customer wore taken out of his account, in this case, as made up to the 31st of December, 1821, the customer's account would, at that date, appear (r) For definition of " short" bills, aec post, p. lio. BILLS OF EXCHANGE. 141 to be overdrawn ; but some of the payments by the banker to the customer were made in bills payable at future times, and some of them were also undue on 31st of December, 1821, and if all the undue bills on both sides had been taken out of the account, the customer would have been creditor on that account. At the period of the bankruptcy, the cash balance was in favour of the customer, exclusive of the bills in ques- tion. It was proved to be the constant usage and course of dealing of this bank and of others in the county of Lancaster, to use bills so paid in, by paying them away to their customers as they thought fit. No direct proof was given that the customer was ac- quainted with this practice, and the customer never re- ceived anything from the banker but cash, notes and bills, drawn by the banker upon his London agents {d). On these facts and the usage above stated it was con- tended, that a bargain or a contract between the customer and banker was to be inferred, to the effect that bills so deposited by the former were to become the property of the banker, upon reaching his hands. But the Court con- sidered that, though it appeared to be the practice to carry the amount of the bills to the cash column of the accoimt, the bills were entered, not as cash, but as bills (e) ; and that, although the amount was so carried to the cash column, it did not follow that the customer assented to their being considered as cash. That merely amounted to an undertaking on the part of the bank to answer cheques in advance, to the amount of the bills so entered. By in- dorsing the bnis paid in, or by giving a guarantie when he did not choose to indorse, the customer might enable the (d) Thompso)i v. Giles, 2 B. & C. 422. The usage of bankers was again stated to prevail in Lancashire to the above effect in Ex parte Armistead, In re Bihcorth S; Co., 2 Glyn & J. 379. {e) Ibid, at pp. 431, 432. Even if they had been entered as cash, that would have admitted of explanation; Giles v. Perhins, 9 East, 12 ; and the customer, even in that case, might be shown to be entitled to the bills. Ex parte Sarjeant, 1 Rose, 153, and per Bayley, J., 2 B. & C. 430. DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. "banker to negotiate the bills, and, in such case, a bond fide holder might have a right to retain them. But the banker could only be justified in negotiating them, when that was rendered a reasonable course, by the state of the customer's account. The custom or usage of bankers in Lancashire was stated to be, it will be observed, to use bills paid in by their customers ; but it was not stated to be the usage that the bankers should so use the bills as their own, icithout reference to the condition of the customer's account. On the whole of the case it was concluded, that there was no foundation for supposing a bargain to have been made, enabling the banker to use, as his own, bills de- posited with him ; and the customer recovered the bills from the assignees. The decision, it will be observed, is in accordance with the general position that if a customer puts bills into his banker's hands, although that gives him a right to expect that his cheques will be honoured to the amount of the bills paid in, still they remain his property, subject to any lien the banker may have on them, to the extent of his advances (./'). This decision received judicial recognition in a compara- tively recent case in bankruptcy, as being in entire con- formity with reason, good sense, and common honesty [g). There undue bills of exchange were from time to time remitted to his bankers by a customer and indorsed to the bankers. The course of dealing was, that the bills were not entered short, but though the bills were distinguished in the customer's account as bills, the full amounts were entered in the cash column under the dates on which the bills were paid into the bank, and the customer was at all times at liberty to draw cheques to the extent of the balance in his favour, as appearing on the account thus made out. Interest was allowed by the bankers upon the bills only (/) Thompson v. G'dcs^ supra, per Holrnyd, J., at pp. -131, 433. \g) Ex parte Barlcworth, In re Harrison, 27 L. J., Bank. 5 ; 2 De G. & J. 194. BILLS OF EXCHANGE. 143 from the time wlien their amounts were received ; and it was held, in the absence of evidence of the customer's acquiescing in or authorizing the bankers to treat the bills as their own from the times of their being paid in, that the bills remained the property of the customer, subject, how- ever, to the lien of the bankers for their cash balance, and that the bankers had no right to negotiate them, unless the balance of the customer's account was in their favour ; and that on the bankruptcy of the bankers, such of these bills as remained in their hands in specie did not pass to their assignees, but, subject to the lien above mentioned, belonged to the customer. " The facts," said Knight Bruce, L. J., in delivering his judgment, " are not nume- rous. A firm of bankers has become bankrupt, and at the time of their bankruptcy they had in their possession short bills deposited with, or otherwise furnished to, them by one of their customers. The customer then said to the bankrupts : * I am ready to pay you the balance against me on my account, upon its being ascertained, and I will relieve you from all liability in respect of your transactions with me or with my firm ; but return to us the short bills belonging to us which you hold.' To this the bank- rupts, or rather their assignees, replied, ' No ; the bills now belong to us, and we have a right to retain them as part of the assets, and you must come in as a cre- ditor for the amount.' To me," said the learned judge, " it appears that this proposition is as startling as a demand by a bankrupt to retain the plate or the title deeds which a customer has deposited with him for safe custody" {h). Bills under such circumstances are not in the order and disposition of tlie banker, within the Bankruptcy Laws ; for a banker, in his relation to his customer, is a factor for bills, within the meaning of the exception of factor in {h) 27 L. J., Bank. 6. 144 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. those laws (/) ; and it is well known that bankers receive bills as factors, or agents, to get payment of them when due. Entering Bills as Cash. — The entry as cash in the banker's books of such bills would not, of itself, change the pro- perty (/i) ; for a banker's books cannot be evidence for him, though they may be against him ; and the assent of the customer to the bills being considered as cash, must be proved in such case ; the onus of proving it being on the banker (/) ; also, it is hard to suppose that, by entering the full amount in the cash column of the account, the banker intended to debit himself presently with the whole sum to be received in future on the bills. In order to change the property, it must be shown that the banker bought the bills, or what is in general the same thing, discounted them ; then the customer might have immediately sued the banker for the price which the banker had agreed to give for the bills, but still retained in his hands ; and if the customer did not indorse the bills, and they were afterwards dishonoured, the banker would have no remedy against him (m). In the pass-book in the case before mentioned (>i), it will be observed, the bills were entered at the full amount, which does not tend to show that they were discounted ; nor do the entries in the interest account tend that way. If it had been intended that the bills should become the property of the banker, they would have been entered as cash, deducting the discount. Bills not due. Property in Bills not due. — It will be observed to fol- low as a consequence of the rule above stated, that when (i) 2 B. & C. 431, 433 ; per Lord Eldon, C, 1 Rose, 239, 253 ; £ri/son V. Tl'ijlic, per BuUcr, J., 1 B. & V. 82, n. (k) Giles V. FerkiuH, 9 East, 12; Jl/iff/us v. Spooner, cited in 2 B. & C. 425, and confirmed, per Holroyd, J., id. 431. (/) Ex parte Sarjeant, 1 Rose, 153. (wi) Per Holroyd, J., 2 B. & C. 431, 433. {h) 'lliompson v. Giles, ante, pp. 139 et seq. SHORT BILLS. 145 the property in bills not due, paid into a banker's, remains in the customer, if by any accident they are destroyed without the default of the banker, the loss does not fall upon him, but upon the customer (n) . The rule itself prevails equally where the bills are de- posited for any other specijQc purpose, as well as that of receiving the amount when due (o) . As has been stated, however, bills ma// be jmid in under circumstances furnishing evidence of a transfer of the pro- perty in them from the customer to the banker; that is a question of fact, to be determined by a jury upon the whole of the circumstances in evidence {)i). Short Bills. — The terms " short bills," and " entering Short biUs. bills short," are very frequently met with in cases relating to the law of bankers, being technical expressions, used amongst persons engaged in banking : it is desirable, therefore, before proceeding further, to state the meaning that is attached to the words. When, upon the receipt from a customer of an undue bill the banker does not carry the amount directly to the former's credit, as for a payment of so much cash into his account, but notes down the receipt of the bill in the cus- tomer's account, with its amount, and the time when due, in a previous column of the same page, he (the banker) is said to " enter those bills short" (/;). And the bills, when BO entered, are commonly said to be "short bills" {q). Though, whether they will be considered so by the Courts, does not depend upon the particular mode in which they are entered, but upon the dealings between the parties, and the circumstances. Such bills, in the absence of special agreement between the parties to the contraiy, or («) Fer Best, J., 2 B. & C. 433. A similar opinion was given by the Judicial Committee of the Privy Council, in Youuff v. Batik of Bengal, 1 Deac. 681. (o) Belcher v. Campbell, 8 Q. B. 11. {p) Giles V. Perkins, 9 East, 12. \q) Ex parte Pease, 1 Rose, 232, per Lorii Eldon, C. G. L DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. modes of dealing from which such agreement may he inferred, are considered in the nature of a deposit ; the property in them is not changed ; on the bankruptcy of the banker, with them in his hands, they may be recovered. Crediting the customer with their amount as cash, is not sufficient to change the property (r). In other cases, it has appeared to be the usage of some country banking houses to enter undue bills that are de- posited to the credit of the customer, giving him either cash for them, or liberty to draw for the amount upon the bank, the customer always indorsing the bills. The prac- tice of London bankers is to enter as above stated. The difference between the effect of the two modes is this : the London banker, if the customer's account is overdrawn, has a lien on the bill deposited with him, though not in- dorsed. The country banker, who, under this practice, always takes the bill indorsed, has not only a lien upon it, if the customer's account is overdrawn, but has also his legal remedy upon the bill by the indorsement. It is to be observed, however, that under neither system does any lien accrue to the banker, until the customer's account be overdrawn. Moreover, if, at the time of the country banker's bankruptcy, the customer's balance is in his favour, he has a right to recover, in specie, all such bills of his, as are in the banker's hands {t), or have been pledged by the banker with a third person with notice {n). Whether a bill is to be considered as intended to be dis- counted or deposited, does not depend on whether it is in- dorsed, but on the question whether it was the intention to make an absolute transfer, giving full power to go against all parties to the bill, or merely to enable the person with (r) J'Jx parte Dumas, 1 Atk. 233 ; 2 Ves. sen. 582 ; Zinek v. Walker, 2 W. Bl. 1150; Ex parte Atkins, 3 M., D. & Do G. 103; Jombart v. Woollett, 2 M. & C. 402 ; Ex parte Barkivorth, In re Harrison, 2 De G. & J. 194; 27 L. J., Bank. 5. (t) Giles V. Perkins, 9 East, 12, 14. The presumption has heen said to be tliat bills deposited with a banker are short bills. Ex parte Armitsteacl, 2 Glpi& J. 371. {>() Collins V. Martin, I B. & P. C48. SHORT BILLS. whom it Is deposited to receive tlie amount from the other parties. Indorsement, however, is lirimd fade evidence of the former {x) . The clearly settled rule is, that, if indorsed bills are deposited with a banker, and they are by him negotiated, and the banker afterwards becomes bankrupt, the original owner, who deposited them with the banker, who fails, can have no claim to recover them against the person holding them, provided such person had no notice of the deposit (y) ; and he can only come in as a general creditor of the banker under his bankruptcy (s) . Lord Eldon more than once observed, when sitting in bankruptcy, that it ought to be generally known, that if bills indorsed are remitted to bankers, they may dispose of them effectually, though contrary to the faith of the under- standing between the parties, and the remitters can only come in as general creditors on the bankruptcy {a). Permission to discount, given by the customer, for the pm'pose of reducing the balance, when the banker shall be in advance, is a cu'cumstance controlling his absolute autho- rity over the indorsed bills of his customer {h) . It is to be remembered also, that as, on the one hand, writing bills short is only evidence (e) to be rebutted by proof of the intentions of, or actual bargains or contracts between , the customer and banker ; so, on the other hand, the circumstance of the bills not having been written short amounts to nothing, to show they were taken as cash, " unless there be a concun-ence manifested at the time, or to be infen-ed from the habits of dealing between the par- ties, that they were to be considered as cash" {d). Hence, in a case where such bills were entered, bills and cash {x) Ex parte Toicgood, 19 Vea. 229. (y) lioUoH V. Fuller, 1 B. & P. 646 ; ColUns v. Martin, 1 B. & P. 648. (z) Ex-imrte Tease, 1 Rose, 238 ; Ex parte Wakefield Bank, 1 Eose, 246. («) Ibid. {b) Ex xjarte Leeds Bank, 1 Rose, 254. (c) Ex parte Pease, 1 Rose, 239 ; 19 Ves. 25. {d) P. (/) Ex parte Pease, 1 Rose, 239. {g) Ex parte Armitstead, 2 Glyu & J. 371, 37^. DOCTRINE OF EX PARTE WARING. 149 account with the bank in 1822 considered as cash, with- out objection on his pai-t, that did not amount to a permis- sion to discount or negotiate (//). In a second case arising on the bankruptcy of the same firm of Dil worth & Co., of Lancaster, it was ruled, that a customer was not entitled to recover short bills in the hands of his bankers on their bankruptcy, where the habit of dealing between the parties was such as to warrant an inference that they mutually considered and treated such bills as cash. The bills in question were indorsed by the customer generally, and paid into the bank, and indorsed by the bankers to their London correspondents. These bills were drawn previously to, but were not due until after, the bankruptcy (/) . Doctrine of Ex parte Waring. — Where undue bills are held by a banker as security against his acceptances for a customer, such bills will, on the bankruptcy of the former, be ordered to be given up to the customer upon his under- taking to indemnify the bankrupt estate against any liability that may arise upon the acceptances (7 ) . If the customer also becomes bankrupt the holders of the accept- ances have a right to have the bills deposited with the banker appropriated to meet the acceptances (/i). This rule only applies where the estates are being judicially administered (/). Nor does it apply to any case in which the holders of the acceptances have not a right of double proof («i), that is to say, against the estate both of the drawer and the acceptor. (7j) Ex parte Armitstead, 2 Glyn & J. 371, 379. (i) Ex parte Thompson, In re LUworth, 1 Mont. & M'A. 102. See also Ex parte Benson, In re Dilworth, 1 Deac. & C. 438. {J) Ex parte Burton Bank, 2 Rose, 162. (k) Ex parte Warincj, 19 Ves. 344. See also City Bank v. luclcie, L. R., 5 Ch. 773 ; Ex parte Lambton, L. R., 10 Ch. App. 405 ; Ex parte Banner, L. R., 2 Ch. D. 278 ; 45 L. J., Bank. 73 ; In re Keic Zealand Bank, L. R., 4 Eq. 226; Ex parte Eewhurst, L. R., 8 Ch. App. 965 ; 42 L. J., Bank. 87 ; In re Earned Banking Company, L. R., 10 Ch. 198. ^ (}) Ex parte Gomez, L. R., 10 Ch. App. 639 ; Ex parte General South American Company, L. R., 10 Ch. 625. {m) Tavghan v. mdliday, L. R., 9 Ch. App. 561. 150 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. Criminal Liability of JBanker. — A banker, wlio in vio- lation of good faith and without authority takes upon himself to negotiate, transfer, or pledge any valuable secu- rity entrusted to him for safe custody, or who in any manner converts such security to his own use, is now liable to be indicted for a misdemeanor imder the 24 & 25 Vict. c. 96, s. 76. Bills remitted J^iUs remitted for Sale. — Whenever bills of exchange lOr S3>l6 * are remitted for sale, and the proceeds are directed to be applied to a specific pui-pose, the property in the bills remains in the remitter, until the purpose for which they were remitted is satisfied ; and, moreover, the value of the bills may be recovered from the purchaser of the bills who had notice of the purpose for which they were remitted, and of the misapplication of the proceeds by the agent. The bills, in the case in which this doctrine was recognized, were not indorsed (m) . A sale of bills of exchange by a factor is precisely the same in principle, and must be dependent on the same rules of law, as a sale of a biU by a banker ; it may, there- fore, here be cited in illustration of the foregoing state- ments, and as elucidating this part of the law of banking. A foreign merchant remitted biUs to his factor in London, with directions to sell them, advising him, at the same time, of his intention to draw for the proceeds. The factor received the biUs and sold them, but before the receipt of the purchase-money became bankrupt and dishonoured the merchant's drafts for the amount of the bills. The sale in London of foreign bills of exchange usually (the report states) takes place on foreign post-days, and it is the custom of merchants not to pay the piu'chase-money until the foreign post-day next after the day of sale. In this case the bills were remitted on the 21st of March, on the 28th they were sold, and the price, according to the custom, (;«) MuUylull Seal v. Lent, 8 Moore, V. C. 319. BANK POST BILLS. 151 would have been payable on the 31st : on the 30th, the factor stopped payment ; and on the 20th of April follow- ing a fiat issued. Here the merchant, and not the assignees of the factor, were held to be entitled to the proceeds of these bills, notwithstanding the bills had been indorsed both by the principal and the factor, and were sold by the factor in his own name. The factor did not receive a del credere commission, nor did he take upon himself any liabiHty, in case of non-payment of the purchase-money, in respect of such bills, but was accustomed on such sales to -inform the principal of the names of the purchasers (n) . Bills in the hands of a banker are, in the event of On bank- bankruptcy, to be delivered up, subject only to the lieu banked ° which the banker may have upon them for the balance of his account. If indorsed bills are deposited with a banker, and are by him negotiated to a third person, though the purpose for which they were deposited should be ever so cruelly disappointed by his becoming bankrupt, the original owner can have no claim to recover them in trover against such third person, provided he had no notice of such purpose (o). Bank Post Bills. — Bank post bills are instruments used Bank post by bankers for remitting money abroad or to the country. ^ ' They are payable to order and at a certain number of days after sight. When indorsed by the payee, they become payable to bearer. If a person goes to his banker, and says, here are 1,000/., in Bank of England notes, get me a bank post bill for them ; the banker cannot receive them silently, as though acquiescing in the object of the customer, and then set up his lien and apply them in reduction of the balance, against the customer, on his account (p). (m) Ex parte FauU, 3 Deac. 169. The judgment was rested on Scott v. ■Surman, Willes, 400. (o) BoUon V. Puller, 1 B. & P. 539, and see ante, pp. 146-7. \p) See observations by Lord Lyadhurst, C, and Lord Brougham, iu Brandao v. Barnett, 12 0. & F. 802. 152 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. Then, sucli expressions, used in the letters of remitters of bills or otherwise, as, that they expected the banker "to do the needful " [q), or " to cover us in due time " {r), do not enlarge the powers of the banker, or constitute a special contract, authorizing him to deal with the bills as his own, or relieve him from the obligation of retaining the bills till due, if remitted to receive payment of them. A bank post bill had been remitted, by a customer to his bankers, with a letter desiring them to place it to his credit, and to send him a receipt, and credit had been given him, in his account, for the amount of the bill, and a receipt given him in the same way as if it had been a cash payment ; the bank post bill, as is mostly the case for the sake of security, when bills are sent into the country, was unaccepted. Now, in such a case, if the customer had drawn a cheque upon the bankers for a sum exceeding liis balance, supposing the bank post bill, for which he had credit in the banker's books, were not reckoned, and the bankers had refused to honour the cheque in respect of that deficiency, it seems probable that an action, such as it had been already shown a cus- tomer, who has an undoubted balance in his favour, may maintain in general on refusal to pay his cheque, could not have been supported ; for the bankers might have answered truly, that an unaccepted bill, though of the Bank of England, payable seven days after sight, is, for many purposes, not equivalent to cash ; and, in fact, their duty had been performed by transmitting the paper to London for acceptance, and raising the money upon it within a reasonable time. It was apparently, though with hesitation, concluded, therefore, that the bank post bill had never become vested, as property, in the bankers ; in other words, it was never in the character of cash between these parties; the ordinary relation of banker and customer remaining between them not regulated or qualified by any particular agreement, express, or to be (y) Ex parte Smith, Buck. 35o. (r) Jomhart v. WooUdt, 2 M. & C. 380. WITH COUNTRY CORRESrOXDEXTS OF BAXKERS. 153 inferred from circumstances or habits of dealing. The customer, therefore, was entitled to the proceeds as against the assignees (s). Relation of Banker and Country Correspondent. — With coimtiy Having thus discussed the relations, rights and liabilities of baXers^''* of customer and banker, upon the deposit of bills with the latter, it remains to notice what are the relations, in similar circumstances, when dealings between the banker in the country and his London correspondents are added to the former simple relation of banker and customer. If a customer deposits indorsed bills with his country banker to obtain payment of them, and the banker remits them to the London bank, who are his correspondents to receive and pay bills, and as such agents have an allow- ance from him for so doing, and then the London bank becomes bankrupt, with the bills remaining undue in his hands, the trustee, upon receiving the proceeds of the bills, must pay them over to the country bank, subject to the lien of the London bankers for anything remaining due from the country bank to them upon the contract be- tween them ; the London bankers being the paid agents of the country bank for this purpose of getting bills paid and remitting the proceeds, and their power over the bills being limited to that purpose. The same would be the case if the London banker, in the annual account between him and his correspondent in the country, there being no proof of agency, had entered the bills as the property of the correspondent. In the former case he would be considered as the factor of the country banker ; in the latter, there is raised an express declaration of trust {t) . Such, then, are the relations of country banker and London correspondent, in case of the bankruptcy of the (i) Ex parte Atkins, 3 M., D. & De G. 103. In place of tlie assignees a trustee now represents the creditors, see ante, p. 26. {f) Ex parte Tease, 1 Eose, 232; Ex parte Wakejield Bank, 1 Rose, 243. 154 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. latter. The result to the customer remains to be in- quired into. Now, it would manifestly be unjust, that the customer should be affected by the bankruptcy of an agent whom he has no voice in selecting, or by the state of the accounts between his banker and that agent ; therefore, although the country banker receives the proceeds of the bills, minus the sum requisite to satisfy the London banker's lien for advances (if any) and to indemnify his estate against ac- ceptances or other engagements which he is under at the time of his bankruptcy on account of the country bank {n), yet he must pay a sum equal to the whole amount of the proceeds of the bills to the customer (subject of com-se to the state of the latter's account) ; for so only can his con- tract with, or duty to, his customer be performed. So where bills were remitted by a country bank to their correspondents in London, and stood, at the bank- ruptcy of the latter, entered short, not being then due, it was ordered, on petition of the country bank, that the biUs should be delivered up to them by the assignees. The country bankers, in this instance, were not creditors of the London bankers when this petition was first pre- sented, the cash balance being against them, but had since become so, turning the balance in their favour, by taking up the acceptances given by the London house on their account (r). The country bankers must have accounted to the customer, who deposited the bills with them, for the entire proceeds of them. The following is a case of bills deposited by country bankers with their London bankers, on which the London bankers had a lien, and on which they were, therefore, entitled to recover against the acceptor (who stood in the character of surety for the country bank), by virtue of the lien. (k) Ex parte Buchanan, 1 Eose, 280, (!•) Ibid.; Ex parte Jiowton, 1 Hose, 15; 17 Yes. 131; Ex i^artc Burton Bank, 2 Rose, 162. WITH COUNTRY CORRESPONDENTS OF BANKERS. 155 A banking house at Abingdon, being indebted to their London correspondents, were urged by them to send them up any bills they could procure. Accordingly they sent up two bills for account, which had been accepted by A. for their accommodation, and which became due respec- tively the 19th March and the 19th April, 1814, each of them being dated the 13th December, 1813. The balance of the cash accoimt, on each of the two first-mentioned dates, was considerably in favour of the country bankers. There were also periods subsequent to those dates, when the general account was in favour of the Abingdon bankers, but they afterwards failed, being at that time indebted to the London bankers in a sum exceeding the principal and interest of the bills. Lord Ellenborough, at Nisi Prius, held the meaning of the expression " for account," to be for the then floating account ; and it was remarked, " There was a period when the lien on the bills of the London bankers ceased to attach, and when the bills might have been redeemed ; but they were not reclaimed, and by allowing them to remain in the hands of the London bankers, their lien revested when, upon fresh advances made, the balance turned in favour of the London bankers." The action was brought by the London bankers against the acceptor, in viiiue of their lien, and by way of en- forcing and realizing it ; and there having been a verdict in their favour, the Court in banc confirmed the verdict (»■). The decision on the following facts illustrates the rela- tion of country banker and London correspondent, when the former deposits with the latter a security by way of pledge. A customer gave his promissory note to his bankers to secure repayment of advances. They became bankrupt, but, at that time, the customer held bank notes of their bank to a greater amount than his promissory note, which ■he had all along reason to believe was still in the posses- {w) Atwood V. Crowdie, 1 Stark. 483. 156 DEPOSIT OF SECUKITIES FOR SPECIAL PURPOSES. sion of the bankers. In fact they had deposited it, hy way of pledge, with their London correspondents. The London bankers enforced the payment of it from the maker, the customer of the country bank ; but the secu- rities in the hands of the London bank were altogether more than sufficient to cover what was due to them from the bankrupts, and the surplus was returned to the assignees (x) . As the customer might have set off the notes he held against the note in the hands of the bankrupts, he was entitled to recover its amount from the assignees. The promissory note was payable on demand, with interest. The case is singular in its circumstances. It is obvious that the customer, thinking that his promissory note was still in the hands of the bankers and so taking their notes, in the way of business, which he might have decHned to do if he had known that they had parted with his note, was put in a different situation by their conduct {//). Bills depo8ited Biils deposited hy Strangers. — Several of the examples T strangers. j^^gg^(jy cited have been cases where short bills have been deposited by customers, it being the law, that bills are considered short, not merely from the fact of their being entered so, but from a consideration of the habits of deal- ing between the parties, and all the circumstances. The following is an instance of a decision upon facts somewhat different : where, viz., the bills were not short bills, and the party depositing was not a customer: — A person deposited with bankers two bills (one for 600/. and the other for 400/.) indorsed by him ; it being agreed that he should draw for the amount of 1,000/., the bankers refusing to discount them ; he, in fact, only drew to the amount of 65/., and the bankers employed a broker to dis- coimt the bills, and then became bankrupt in less than three weeks after the bills had been deposited with them. {j:) Sec autc, p. 2G. (y) Ex parte Utaddon, 3 M., D. & De Gr. 256. IN REPUTED OWNERSHIP OF BANKERS. 157 It was not the usage of the bankers to treat any bills paid in by a customer as short bills, but to consider all paid in by any person as the property of the bankers, and to be paid in on the customer's general account ; and in keeping their accounts they had not, like many other bankers, a cash column and a bill column, in their books, but it was their practice to blend both bills and cash; these were entered as bills. There was no cash balance in favour of the person who paid in these bills, at the time of the bank- ruptcy, and no evidence of any other banking account in his name than that on the bills. It was part of the agree- ment for his drawing, &c., that he was not to draw out the amount of the 400/. bill until the 600/. bill was paid. He was held to be entitled, on the bankruptcy, to the proceeds of the biU (s). Here, it is evident, the property in the bills had never passed from the depositor ; he was led to consider that the bankers would not buy them ; their discounting them afterwards was without his knowledge ; he would have been entitled to the bills, if they had remained in specie in the hands of the bankers. Bills and other Property in reputed Ownership of Bankers. — Bills and It has been stated that bills of exchange, remitted to a rfties^^' banker, clothed with a trust, do not pass to the trustee reputed upon the bankruptcy of the banker, as they would do if bankers, they were, in such case, within the doctrine of reputed ownership [a] ; but, nevertheless, under all other circimi- stances, bills of exchange, placed in the hands of a banker, will so pass. For instance, if A., icho has had no previous dealings icifh a banker in the country, applies to him to give him a bill on London for three bills of exchange of which the aj)plicant is holder, and the banker does so, and the bill given by the banker is afterwards dishonoured, this transaction is a complete exchange of securities, and (z) Ex parte Edwards, 2 M., D. & De G. 625. («) B:iukruptcj Act, 1869, 32 & 33 Vict. c. 71, s. 15 (5). 158 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. trover will not lie at tlie suit of A. for tlie tlu'ee bills ; and even if the exchange has not been absolute and complete, the banker having become bankrupt, the three bills, having come to the hands of the assignees, must be considered as goods and chattels in the order and disposition of the bankrupt at the time of his bankruptcy, within the mean- ing of the bankrupt law. For the bills being indorsed to the bankers, they have the power of disposing of them, and, in like manner, A. has a similar power over the bill handed to liim in exchange : and the former, being negotiable securities, and remaining in the hands of the bankers until their bankruptcy, must necessarily be held within the doctrine. This case has been held quite distinguish- able from that of bills deposited by a customer clothed with a trust, for trust property is always considered not to be within the principle of the bankrupt law in this respect (b). But it is not only when bills of exchange or other securities are deposited for a specific purpose with bankers, that the property remains in the depositor ; there is another class of cases, where money paid into a bank may, imder certain circumstances, remain the property of the party paying in, and be, therefore, recoverable on bankruptcy from the trustee. Thus, where a person deposited, after banking hours, a large sum of money with the manager of a provincial bank, at the banking house, the manager knowing that the bank was on the eve of stopping, though no resolu- tion to that effect had been, in form, come to by the bankers, and he had put the money in a place by itself, separately from the funds of the bank, and the bank never after that day opened for business ; Lord Tenterden, C. J., held that the depositor was entitled to recover from the assignees (r). (i) ITornhlowcr v. rroud, 2 B. & A. 327; Edicards v. Ghjn, 2 El. & El. 29 ; 28 L. J., Q. B. 350 ; 5 Jur., N. S. 1307. ((•) Threlfalv. Giles, cited 2 M. & Rob. 492; now trustee, ante, p. 2G. IN REPUTED OWNERSHIP OF BANKERS. 159 So where it was the usage of a banking house, that money, paid in after banking hours, should be put into a separate place of deposit, and entered in a counter book, but not carried to the customer's account till the next day; and a customer paid in a 500/. Bank of England note after banking hours, and the banker having before resolved not to re-open for business, put the note in a separate place, and next morning stopped payment and became bankrupt, the customer recovered from the assignees, the bank note being held to remain his property {d). It may be further observed, that by the usage the cus- tomer was considered to be entitled to draw upon money so paid in, at the opening of the bank on the following morn- ing. The counter book was a book in which an entry was made of all moneys paid into the bank, as they were paid in, and was always resorted to, for the purpose of ascertaining whether money had been paid in by a customer dming the day, before a cheque of such customer was dishonoured. The bank note was not entered in any other book of the bank, nor was it in any way carried to the account of the customer, or entered in his pass book, and never was mixed with the assets of the house (d) . A sum of money, consisting partly of Bank of England notes and of country bank notes, partly of cheques on country bankers and partly of coin, was, after banking hours on a Saturday evening, placed in the hands of the manager of the bank, at the banking house, where he resided, and he gave a receipt for the same, wifh the words " to he ac- counted for on demand,^' dated as of the following Monday ; they were not entered in any of the bank books by the manager, or in any way mixed with the bank moneys, but were placed by the manager in a bag, in which there was nothing else. The bank never opened again for business. The partners in it were afterwards made bankruj)ts : the money so deposited was held, in bankruptcy, to pass to {d) Sadler v. Belcher, 2 M. & Rob. 489. 160 DEPOSIT OF SECURITIES FOR SPECIAL PURPOSES. the assignees (/) , In this case, however, the manager was in the habit of receiving deposits after banking hours, and the customers, from whom the above-mentioned deposit was received, were in the habit of making deposits after the bank had closed, and such deposits had always been treated by both parties as if regularly made. One of the partners had already resolved to commit an act of bankruptcy, and, on the same evening of Saturday, did commit an inchoate act, unknown to the other and remain- ing partner ; the firm did not become bankrupt until the Monday. Stock or Stock or Bonds. — Cases of fraudulent disposal by bonds. bankers of stock or bonds belonging to customers some- times occur, in which they have attempted to repair the injury done to the customers by substituting securities of their own in the place of the securities with which they have improperly dealt, but such attempts are, for the most part, wholly ineffectual, in the case of bankruptcy, as against the trustee. Thus, a customer of a banking house was owner of 16,000/. Navy Five per Cent. Stock, which stood in the name of one of the partners of the bank ; the partner sold out the whole of the stock, and applied the proceeds to the purposes of the banking house, at the same time enclosing in an envelope certain bonds belonging to the house, together with a memorandum to this effect — " Bor- rowed and received of J. Balfour, Esq. (the customer) 16,000/. Navy Five per Cents., which we promise to replace ; and we have deposited with him, as collateral securities, these bonds of the Earl of Oxford and Mor- timer, and others, which we promise to assign when required," — and sealing up the bonds, and writing on the envelope, "The property of J. Balfour, Esq. ;" this packet (/) Ex parte Clutton, 1 Fonb. 167 ; see Sadler v. Belcher, 2 M. & Rob. 489, the differonoc between the two cases i.", thnt, in the Litter, the deter- miniition to commit un act of bankruptcy has been taken by all the partners before the money was paid in; moreover, no receipt was given. POLICIES OF IXSURANCE, ETC. 161 was deposited in an iron chest, among securities belonging to other customers ; and in the evening of the day before the bank stopped payment, it was sent to the customer, who then first learnt that the stock had been sold : — It was held that, as the possession of the bonds had never been out of the bankers till the very eve of the bankruptcy, when they could not give a preference, the customer had no lien on the bonds, but must give them up to the as- signees (./'). DEPOSIT OF SECURITIES AGAINST ADVANCES. Having observed what is the effect of depositing secu- Securities rities for some specific purpose, not giving any property yfnces. in them to the bankers, in cases which, for the most part, have arisen where the customer's account with the bankers has been in his favour, let us proceed to investigate the effect of depositing securities when the balance is against him, and when the object of the deposit is to save harm- less the bankers against their advances to the customer. Policies of Insurance — Notice. — A policy of insurance is Policies of a chose in action within the meaning of the proviso in sub- jJotfcT section 15 of section 5 of the Bankruptcy Act of 1869 ; and, consequently, is exempt from the operation of the " apparent ownership" clause. A banker, therefore, who receives such an instrument by way of equitable mortgage for money advanced by him to the mortgagor, need not give notice to the office in order to protect himself against the trustees in bankruptcy of the mortgagor (^) . Under the late Bankruptcy Act no such exemption in favour of choses in action was made, accordingly notice was formerly necessary to take the policy out of the apparent ownership of the assured {h) . (/) Wilson V. Balfoto; 2 Camp. 580. (V) Sj: parte Ihbitson, 8 Ch. D. 519 ; In re Irving, 7 Ch. D. 419. {h) Ex parte Armstrong, 3 M., D. & De G. 143 ; Gordon v. East India Company, 7 T. R. 237 ; Ex parte Tennyson, Mont. & Bli. 67 ; Edwards v. Martin, L. R., 1 Eq. 121. G. M insurance — 162 DEPOSIT OF SECURITIES AGAINST AD^'ANCES. As to whom the notice should be sent. Assignment of policies. Notice, however, sliould be given to guard against any- subsequent mortgagee without notice gaining priority by giving notice (k). And to perfect the title as against the office, and so prevent it from taking a surrender of the policy (/), or from paying the sum secured thereby to the assured (;;.'), notice to the office miist now be in writing, by 30 & 31 Yict. c. 144 (ii). As to u-hom the Notice should he sent. — All risks as to whether notice has been properly given to the insurance company will be avoided, hy gh-ing u-rittoi notice to the officer representing the company, which, in the case of an incorporated company, would be the head or chairman, or the directors, or the secretary, according to the terms of the charter, or incorporating statute ; and in the case of a joint-stock companj^ would be the public officer of the company, or secretary, or agent of the company, according to the terms of the deed of settlement or articles of asso- ciation, and the usual practice of the company (o). Assignment- of Policies. — By 30 & 31 Yict. c. 144, an assignee of a policy of insurance may sue at law in his own name, provided a written notice has been given to the company. The date of such notice shall regulate the priority of all claims under any assignment. S. having effected two policies upon his life for the purpose, as he expressly informed the assurance company, of enabling him to give C. a security for a debt which exceeded the (/.•) Wihnot V. Tihc, 5 Hare, 19. ^^'^^cre a person lent money on Scrip certificates, when proved by custom to pass by delivery, cannot be recovered back from a bona fide holder for value who has obtained them from a person in whom no title vested {h). These certificates must bear a penny stamp (33 & 34 Yict. c. 98, s. 23). Title Deeds. — With respect to the deposit of title deeds, Title deeds, it is desirable to state the principal results of the decisions, many of which tend to show that bankers have acted at {d) Shropshire Union Raihvaij and Canal Co. v. The Queen, supra. {e) lb., per Lord Chancellor Cairns. (/) Lindlej- on Partnership, p. 123. {g) Eustace \. Dublin Trunk Railway, L. E., 6 Eq. 182. [h) Goodu-in v. Eobarts, L. R., 1 App. Ca. 47G ; lo L. J., Ex. 748 ; 24 W. E. 987. 1G8 DEPOSIT OF SECURITIES AGAINST ADVANCES. times, in sucli cases, as thoiigli they were inopes coiisilii, and have suffered accordingly. It is not necessary, for the purpose of effecting an equit- able mortgage, that all the title deeds relating to the estate should be deposited, provided real and material portions of them are deposited {i) . A deposit of title deeds, as a security for a debt, will, with- out more, create in equity a charge upon the property ; but where it is accompanied by a written document the terms of that document must be referred to in order to ascertain the exact nature of that charge {k) . The prudence and propriety, with a view of preventing disputes and removing all ground for question and litiga- tion, have been pointed out, of always taking a memoran- *dum of the object and purpose for which the deposit was made, and numerous instances have occurred in which much delay in realizing the securities would have been saved to bankers if their advisers had been duly alive to these considerations. For instance, it has been laid down, that where there is no memorandum, an equitable mortgage so created will prima facie be considered only as a security for a debt then due {!). A deposit may, of course, be made to cover futui'e advances and such an intention can be proved by parol evidence {in). An agreement to give a mortgage, and the delivery of title deeds for the piu'pose of having the agreement carried into effect, will constitute an equitable mortgage {n). When title deeds are deposited by way of equitable mortgage, and a memorandum merely states the purpose fur which they are deposited, it is not an agreement for a mortgage, and does not require to be stamped {o). (i) Lacon v. Allen, 2C L. J., Chanc. 18. (A-) Shaw V. Foster, L. R., 5 H. L. 321 ; 42 L. J., Chanc. 49. \l) Ex parte Whitbread, 19 Ves. 209; Ex parte Mountfort, 14 Ves. 606. (>«) Ex parte Mountfort, supra, Ex parte Hooper, 1 Mer. 7. (w) Hockley v. Bantock, 1 Russ. 141 ; Keys v. Willianis, 3 Y. & C. 55. (o) Meek V. Bayliss, 31 L. J., Chanc. 448. Sec Stamp Act, 1870, s. 105. TITLE DEEDS. 169 Fixtures annexed to the realty, whetlier tenant's fixtures or not, will be included in the equitable mortgage created by the deposit of deeds, whether such deeds relate to free- hold or leasehold property, and whether the fixtures are erected subsequently to the deposit or before. Thus a person deposited with his bankers the title deeds relating to certain steam-mills, cottages, land, buildings and machinery of which he was possessed, for an estate in fee simj)le. The original memorandum of deposit was not forthcoming, but a draft of it was proved, and it purported to be made for securing to the bank all moneys then owing to them by the depositor, and which should in futui-e be advanced to him by them, together with bankers' com- mission, and all other usual charges, and also all balances which should at any time be due from the de^Dositor on his banking account, together with interest for the same after the rate of 51. per cent, per annum. After the date of the deposit the depositor erected buildings for crushing bones, and also for crushing oil seeds, with the necessary machi- nery and steam-engine, all afiixed to the freehold. This was held to be an equitable mortgage, giving a lien on the fixtures, whether erected before or after the time of the deposit, including those that were removable as between landlord and tenant (j)). In cases of equitable mortgages by manufacturers, questions sometimes arise as to the passing, under the deed, of the machinery, &c. {p) J^j: parte Pr'ue, 2 M., D. &: De G. .518. See also Ex parte. Lloyd, 3 Deac. & C. 765 ; Ex parte Broadicood, 1 M., D. & De G. 631 ; Ex parte CowcU, 17 L. J., Bank. 16; Ex parte Bcntleij, 2 M., D. & De G. .591 ; Williams v. Evans, 23 Beav. 239 ; Tebb v. Hodfje, L. R., 5 C. P. 73 ; Mcux V. Jacobs, L. E,., 7 H. L. Cas. 481. In Ex parte Tirecdy, In re Trethowan, L. R., 5 Ch. D. 559 ; 46 L. J., Bank. 43, a lease of a shipbuilding yard, and the trade fixtures therein were assigned to a shipbuilder to hold the leasehold premises for the residue of the temi and the trade fixtm-es abso- lutely. He deposited the lease and the assignment with his bankers for advances made by them to him. No memorandum of charge was exe- cuted. Held, among other things, that the equitable deposit did not comprise the tenant's fixtures. This decision was appealed from, but the parties effected a compromise before the case was reconsidered, and, qaery, as to its correctness. 170 DEPOSIT OF SKCUlllTlES AGAINST ADVANCES. In Re LloucVs Banking Compamj (ilc of Bengal v. Machod, o Moore, Indian Ajjp. 1 ; 7 Moore, P. C. 35 ; iS'. P., Bank of Bengal v. Fagan, 5 Moore, Indian App. 27; 7 Moore, P. C. 61. {v) Jiuherts V. Eden, 1 B. & P. 398. (w) Hilh V. Parker, It L. T., N. S. 107. {x) E.r parte Banietf, 1 De Gex, 203. BILLS OF LADING. 179 cumstances, after having paid A. the amount, hut without B.'s knowledge ; the hank may sue B. in A.'s name ( //). If a trader has securities lent to him in order that hy depositing them he may get credit with the hank of A., he is not authorized, after having redeemed them from the hank of A., again to deposit them in order to ohtain credit with the hank of B., although the securities had heen in- dorsed to him (~). When a trader deposits securities in his possession for the purpose of ohtaining credit, and does so without the knowledge of the owner of the secm-ities, he is not to he considered, if he redeems them, to have given a fraudulent preference to the owner (;:). Bills of Lading. — A hill of lading is a contract in writing, BlUsof lading, signed and delivered hy the owner or master of a ship, whereby he acknowledges the receipt of goods and under- takes to convey them (unless prevented from so doing hy the act of Grod, the queen's enemies, accidents of naviga- tion or fire), and to deliver them, on payment of freight, to the person mentioned therein, or his order or assigns. So long as the goods are in transitu, the vendor has a right to stop them as against the vendee, in the event of the latter's insolvency {n) ; though the better opinion would seem to be, that stoppage in transitu does not rescind the contract of sale altogether [h). A vendee, however, can defeat the vendor's right of stoppage in transitu by negotiating the bill to a hond fide transferee for value ; but, as will be seen from the next paragraph, the transferee's right to the goods will only be co-extensive with the amount of his debts (c). (y) Lucas v. WiUcinson, 2G L. J., Exch. 13 ; 1 H. & N. 420. (s) Sinclair \. Wihon, 24 L. J., Chanc. 537. (a) Liclcbarrow v. 3fason, 1 Sm. L. Ca. 810. (i) TTent worth v. Outhicaite, 10 M. feW. 451 ; E.r parte StapMon, L. E,., 10 Ch. D. 586. As to -svliose goods are in transitu, see Bolton v. Lancashire and Yorkshire Ruihvay Co., L. R., 1 C. P. 431 ; Rodger v. Comptoir D^Es- comptc de Paris, L. E.., 2 P. C. C. 398 ; Mo'chant Banhiny Co. v. Bhaenix Bessemer Sted Co., L. R., 5 Ch. D. 205. (e) Leash v. Scott, 2 Q. B. D. 376 ; 46 L. J., Q. B. 576 ; Ogrj v. Shxfer, 1 0. P. D. 47 ; 45 L. J., Cf. P. 44 ; Spalding v. Bnding, 6 Beav. 376. n2 ■ 180 DEPOSIT OF SECURITIES AGAINST ADVANCES. A bill of lading may be deposited by the consignee thereof as a security for an advance made to liim, and such deposit will carry with it a right to the legal possession of the goods ; but in the event of the insolvency of the con- signee, the vendor's right of stoj)jXf[/e in trcumtu is not wholly gone, for he may, in equity at least, resume his interest in the goods, subject to the right of the depositee to have his debt first satisfied ; and when, with the deposit of the bill of lading, other goods belonging to the de- positor are pledged, the vendor may insist upon the pro- ceeds of such goods being appropriated, in the first instance, to the payment of the debt. This rule was laid down in Re Westzmihus {d), in which the facts were as follows : — L. and Co. who had purchased oil from W., paid for it by acceptance, and indorsed and deposited the bill of lading with II. and Co. as seciu-ity for a certain advance. L. and Co. having become bankrupt, and their acceptance dishonoured, W. gave notice to the master of the ship that he claimed to stop the oil i)i fraiisifii. At the time of L. and Co.'s bankruptcy .they were indebted to II. and Co. to the amount of 9,271/. on account of various advances for which, in addition to the bill of lading, they held as security other goods to the value of 9,961/. It was held, that W. was entitled to insist upon the proceeds of L.'s own goods being appropriated to satisfy II. and Co.'s debt, and since they proved sufficient to do so, to have de- livered over to him the whole proceeds of the oil. " As Westzinthus," Lord Denman said, " would have had a clear right at law to resume the possession of the goods on the insolvency of the vendee had it not been for the transfer of the property and right of possession by the indorsement of the bill of lading for a valuable considera- tion to llardman, it appears to us that in a Court of Equity such transfer would be treated as a pledge or mortgage only, and "Westzinthus would be considered as [d) o B. 6L- Ad. 817. FACTORS ACTS. 181 having resumed his former interest in the goods subject to that pledge or mortgage, in analogy to the common case of a mortgage of a real estate, which is considered as a mere security, and the mortgagor as the owner of the land. We therefore think that Westzinthus by his at- tempted stoppage in transitu acquired a right to the goods in equity (subject to Hardman's lien thereon) as against Lapage and his assignees, who are bound by the same equities that Lapage himself was. ... If, then, "Westzinthus had an equitable right to the oil, subject to Hardman's lien thereon for his debt, he would by means of his goods have become a surety to Hardman for Lapage's debt, and would then have a clear equity to oblige Hardman to have recourse against Lapage's own goods deposited with him to pay his debt in lieu of the surety ; and all the goods, both of Lapage and Westzinthus having been sold, he would have a right to insist upon the proceeds of Lapage's goods being appropriated, in the first instance, to the payment of the debt " (e). Factors Acts. — Formerly a factor could not bind his Factors Acts. principal by pledging a bill of lading, without his autho- rity, though he might do so by selling it ; but now, by 5 & 6 Yict. c. 39 (/), an agent (^) intrusted with the possession of goods, or of the documents of title to goods (h) (and priuid facie an agent in possession is to be taken "to be intrusted "), is to be deemed the owner thereof, so far as to give validity to any contract or agreement by way of j^Icdge, lien, or security bond fide made by any person with such agent so intrusted as well as for any original loan, advance, or payment made upon (e) See also, as to this latter point, Ex parte Alston, L. K., 4 Ch. 1C8 ; Coventrxj v. Gladstone, L. E,., 6 Eq. 44. (/) See also 4 Geo. 4, c. 83 ; 6 Geo. 4, c. 94. {g) In the two prior acts the words used -were "persons intrusted," but these words have been held to mean no more than * ' intrusted to a factor or agent as such." See Johnson v. Credit Lyonnais, L. R., 3 C. P. D. 32, 43, 48 ; 47 L. J., C. P. 241 ; 26 W. R. 195. {h) Vickers v. Eertz, L. R., 2 Sc. Ap. 113, 118. 182 DEPOSIT OF SECURITIES AGAINST ADVANCES. the security of such, goods or documents, as also for any further or continuing advance in respect thereof, and such contract or agreement shall be binding upon and good against the owner of such goods, and all other persons interested therein, notwithstanding the person claiming such pledge or lien may have had notice that the person with whom such contract or agreement is made is only an agent (/). A wine- merchant's clerk is not an " agent " within the section, but a mere servant of his principal (k) ; nor is a ware- house-keeper who has goods deposited with him as such (/) ; but the word is restricted to those who in the ordinary course of business have power to sell or pledge goods and receive payment or advances for their prin- cipals (m) . It is on this ground that formerly a vendor or vendee who retained possession of the documents of title to goods sold was held not an agent within the act {n). To remedy this, however, an act was passed, 40 & 41 Vict. c. 39, by which now vendors and vendees in possession of the documents of title to goods sold are to be deemed " agents " or " persons intrusted " within the meaning of the Factors Acts (o). By the same act it is enacted that no revocation of agency or entrustment shall prejudice the title of any person, who, without notice of such revocation, purchases such goods or documents, or makes advances upon the faith or security of such goods or documents (j)). (j) A woolbrokcr gave to a bank a letter of hypothecation on certam wools, to secure an advance, promising to lodge warehouse waiTants for them next day. The bank made repeated application for the warrants, but could not obtain them. A few days afterwards, the broker ha\-ing left the house, the bankers, by pressure, obtained the keys of the ware- house where the wool was stored and took possession. Part of the wool had belonged to a customer of the broker, wlio was, liowevor, under ad- vances and made no claim. Ileid, that the bank acquired a valid cliargo on the wool under the Factors Act, 5 & G Vict. c. 39, Hm parte Mrth JVcstem Bank, L. E,., 15 Eq. G9 ; 42 L. J., Bank. 6 ; 21 W. K. 69. (/.) Lamb v. Attcnhnroiujh, 31 L. J., Q. B. 41. (/) Cole V. N. W. Bank, L. R., IOC. P. 3.54 ; 44 L. J., C. P. 233. {m) Ibid. (ii) Johnson V. Lyonnais (Jompamj, ante ; Jaikyns v. Vsbornc, 5 Sc, N. li. 40-3. {o) Sect. 3. (/?) Sect. 2. DEPOSIT OF GOODS. 183 Formerly an agent, though, otherwise within the acts, ceased to be so, if his authority had been revoked (q). Deposit of Goods. — Glenerally, as to the deposit of goods Deposit of by way of security, a banker is bound, at common law, to ^^o"^^- take care that the person depositing is entitled to the goods ; otherwise the banker may at any time be called upon to surrender the goods, or the value of them, to their real owner (r) ; and a person, though he comes into pos- session of goods properly, nevertheless does not always take or retain the right to dispose of them ; thus, if a per- son is entrusted with jewels in a bag sealed, to be kept safely for the use of the real owner, he becomes possessor maid fide by breaking the seals ; he has no right to the property, and he cannot transfer to the banker more right than he has himself («) . A person receiving goods by w^ay of security for an advance has, it has been held, a lien on such goods for advances made subsequently to, though not on, that security [t) . Considerable doubt, however, exists as to the correctness of this decision («), while it is clear no such right •would exist as against the pledgor's creditors or subsequent purchasers {v). Where a time is fixed for repayment of the advance, and default is made by the pledgor, the banker may sell the goods (?r) ; and where no such time is named, the better opinion would seem to be that he may also do so, provided he first makes a formal demand on the pledgor to fulfil his engagement, and gives him notice of his intention to sell, {q) Fuentes v. Montis, L. R., 3 C. P. 268. By sect. 5 of this act, moreover, where documents of title other than bills of lading have been lawfully endorsed or transferred by a vendee to a bona fide transferee the vendor's lien or right of stoppage in transitu wUl be defeated just as in the case of a transfer of a bill of lading. (r) Havtop v. Eoarc, 3 Atk. 44. As to the right of factors, &€., to bind their principals by pledging goods, see ante, p. 181, («) Hartop V. Hoare, 3 Atk. 44. {t) Demainbray v. Metcalfe, 2 Vem. 691. (m) See Fisher on Mortgages, p. 616, and cases there quoted. (r) Adams v. Claxton, 6 Ves. 229 ; Tanda-zce v. Willis, 3 Bro. C. C. 21 ; Talbot V. Frere, 9 Ch. D. 568. (m) Fotlwnier v. Dawson, Holt, 385. See Figot v. Chuhley, 15 C. B., N. S. 701. 184 DEPOSIT OF SECURITIES AGAINST ADVANCES. in the event of his making default (.r) . So, when the sale has taken place, any surplus that remains out of the proceeds after the pledgee has repaid himself his debt, interest and costs, must be handed over to the pledgor {>/) . The pledgee is bound to exercise ordinary diligence and care in keeping the subject-matter of the pledge, and, so long as he does this, he is not liable for its loss or destruc- tion, nor is he prevented from suing for the amount so secured (;:). Bills of sale. When goods are mortgaged by bill of sale as security for an advance, the banker must be careful that all the requisites of the Bills of Sale Act (41 & 42 Yict. c. 31), have been complied with, or otherwise he may find that his security is not worth " the paper it is writ on." What these requisites are, and what is the result of not complying with them, will be found fully stated in a subsequent chapter {a) . Neither must bankers secure themselves at the expense of the creditors by a bill of sale which deprives the grantor of all his property, as the execution of such an instrument is an act of bankruptcy. As to when such an assignment will amount to an act of bankruptcy, L. J. Mellish thus summarizes the law, " The result of the authorities is, that where a debtor assigns his whole property as a security for a past debt only, it is an act of bankruptcy, whatever the motives may be. If there is also a further advance it is not a question whether the further advance is great or small, but whether there was a bona fide intention of carrying on the business "((6). And again, in Kr parte King, James, L. J., says, " In each case, looking at all the circumstances, you have to answer these questions. Does the assignment include all the property, or is there a sub- stantial exception ? Is it wholly to secure a pre-existing (j) Martin v. Bead, 11 C. B., N. S. 730; 31 L. J., C. P. 12G. [y) Wilson V. Tookcr, o Bro. V. C. 193. See also AUcnborongh v. St. Katkcrine's Dock Co., 3 C. P. D. 464 ; 47 L. J., C. P. 763. (;) Coytjn V. Bernard, 2 Ld. liaj'inoud, 909 ; 1 Sm. L. Ca. 227. (a) I'ost, Chapter on Bills of Sale. (*) Ex parte Ellis, 2 Ch. 1). 798 ; 4.5 L. J., Bank. 1.59. sHirs. 185 debt, and if tliere is a further advance, is it a substantial one, or only one intended to give colour to a security wluch is in reality made only for the purpose of securing a pre-existing debt ? These are questions of fact, and the answers given depend on the circumstances" (c). A document stating goods to have been deposited as a security for the repayment of money lent, and containing a power of sale in default of payment, does not require to be stamped as a mortgage deed {d) . S/iips. — By the Merchant Shipping Act, 1851 (e), a registered ship, or any share therein, may be made security for a loan by way of mortgage in two ways : (1) by a direct mortgage with registration ; (2) by a mortgage under a mortgage certificate. (1.) The mortgage must be in the form marked I. in the schedule to the act, or as near thereto as circumstances wUl permit, and on its production the registrar of the port where the ship is registered shall record the same in the register books (/). The mortgages are registered in the order of time of their production {g), and where there is more than one mortgage registered of the same ship or shares therein, the mortgagees shall, notwithstanding any express, implied or constructive notice be entitled in priority one over the other, according to the date at which each instrument is recorded in the register books, and not according to the date of each instrument itself {/i). It has been held, however, that as against the mortgagor himself registration is not necessary (/). {c) Ex parte Ellis, 2 Ch. D. 798. See also Lomax v. Buxton, L. R., G C. P. 107; Jones v. Barber, L. R., 6 Q. B. 77; Fhilps v. Hornstedt, 1 Ex. D. 62 ; Ex parte Fisher, L. R., 7 Ch. 636; Harrison v. Cohen, 32 L. T. 717 ; Ex parte Faijne, 11 Ch. D. 539 ; 40 L. T. 296 ; 27 W. R. 368. (r/) Attenhorough v. Commissioners of Inland JRevenue, In re Wright, II Exch. 461 ; 25 L. J., Exch. 22. (c) 17 & 18 Vict. c. 104. (/) Sect. 66. {g) Sect. 67. (h) Sect. 68. (i) Lister v. Faijne, 11 Sim. 348. 186 DEPOSIT OF SECURITIES AGAINST ADVANCES. And an unregistered mortgage will pass tlie ownership of a ship to the mortgagee even as against an equitable assignee of the freight, at all events in the absence of fraud, or of such gross and wilful negligence as is equiva- lent to fraud, and provided the mortgagee has taken possession (/.•). The only effect of not registering the mortgage is to postpone the claim of the mortgagee to that of a subsequent mortgagee who has registered (/) . A mortgagee who has taken possession becomes entitled to the accruing freight {m), and to use or sell the ship {)i). And upon taking possession he becomes an owner within the Merchant Shipping Act (17 & 18 Vict. c. 104), and subject to all the liabilities consequent thereon (o). The rights of a registered mortgage are not affected by any act of bankruptcy committed by the mortgagor after the date of the record of the mortgage; and the mortgaged pro- perty is not considered as being in the apparent ownership of the bankrupt within the meaning of the Bankruptcy Act, and the mortgagee will be preferred to the trustee in bankruptcy (j)). (2.) A mortgage certificate is a power given to the owner of a ship or share therein by the registrar enabling him to mortgage such ship or share (q). Certificates of mortgage must be in the forms contained in the schedule to the act, and contain a statement of the several particulars mentioned in sect. 77, and in addition thereto an enumeration of any registered mortgages or certificates of mortgage affecting the ships or shares in respect of which such certificates are given (>•). Every mortgage whicli is so registered shall . have a (/.) Keith V. Burrows, 1 C. V. J), "fl-l; 2 C. P. D. 160; 2 App. Cas. 63G; 46 L. J., C. P. 801. (0 Ibid., 2 C. P. D. 163. {»i) Wilson V. Wilson, L. R., 14 Eq. 32 ; Kcilli v. Burrows, supra ; Brown V. Tanner, L. R., 5 Ch. 597. (n) l)e Mattos v. Gibson, 1 Jo. & H. 79. (o) Ibid. \p) Sect. 72. (//) Sect. 76. (/•) Sect. 79. SHIPS. 187 priority over all mortgages of tlie same sliip or share created subsequently to the date of the entry of the certi- ficate in the register book ; and if there be more mortgages than are so indorsed, the respective mortgagees claiming thereunder shall, notwithstanding any express, implied or constructive notice be entitled one before the other accord- ing to the date at which a record of each instrument is indorsed on the certificate (.s). By 25 & 26 Vict. c. 63, s. 3, equities may be enforced against owners and mortgagees of ships in respect of their interest therein in the same manner as equities may be enforced against them in respect of any other personal property (/). So an owner of a ship executing an absolute transfer of his interest therein is not precluded from showing that the legal intention was to give the transferee only a" secmity by way of mortgage {if). Equitable mortgages of ships are, therefore, valid without registration, as against all persons except registered transferees and mortgagees (r). The deposit of a builder's certificate of an unfui'nished ship by way of security creates an equitable mortgage [x], as also does the deposit of a registered mortgage (y). In the case of a mortgage of a ship or cargo notice should be given to the master or consignee {z). Mortgages of future freight or of cargo to be acquired during a voyage may be made (a), but notice should be sent to the master {b). As there is no doubt that a person may give an effectual security upon property of his at sea, before it has come to («) Sect. 80. {t) Union Bank of Loudon v. Lenanton, 3 C. P. D. 243 ; 47 L. J., C. P. 409. («) WardY. Peel; 13 C. B., N. S. 668; 32 L. J., C. P. 113; see also The Cathcart, L. R., 1 Eq. 314. (i) Htuplcton V. Hayman, 2 H. & C. 918 ; 33 L. J., Ex. 17. (;r) Ex parte Sodgkins, L. R., 20 Eq. 746. (V) Lacon v. Liffcn, 32 L. J., Ch. 25. (;) Langton v. Horton, 1 Hare, 549. (a) Gardner v. Zachlan, 4 M. & C. 129 ; Leslie v. Guthrie, 1 Scott, 683. , [b] Layton v. Horton, 1 Hare, 549. 188 DEPOSIT OF SECURITIES AGAINST ADVANCES. hand, so lie may also pledge a policy of marine insurance with another person or with bankers, and they, if duo notice has been given to the underwriters or insurance company, will be entitled to receive the principal sum insured, upon the event insured against happening. On change of 0)1 Change of Firm. — The question may frequently arise, in practical banking, as to the effect of a change of firm upon a security deposited with the bank before the altera- tion. The following case will tend to explain the position of the bank in such circumstances : — A. deposited with a bank, by way of security for ad- vances, a joint and several promissory note, made payable to order on demand with interest, whereby A. and B. promised to pay on demand Pease and others and B. II., or order, 300/., with interest. A. paid interest regularly. At one time he had a balance in the bankers' hands ex- ceeding the amount of the note. After the note was deposited the firm changed ; the Court held — 1. The note being a continuing security, inasmuch as it was made payable to order, might be indorsed, notwith- standing the change in the banking firm. 2. The note not having been indorsed, the original payees, being a partnership, or the survivors of them, were the proper parties to sue upon it. 3. The note was not discharged, by the fact of A.'s having, at one time, since the deposit of it, in the bankers' hands, a balance exceeding its amount (c). Whenever, therefore, bankers take a security of this kind, it is indispensable for their secmity, either that they indorse the note within the six years from its date, or that they put it in suit within that time, or that they take care that the interest is regularly paid upon it, in order to make it effectual as a security, and guard themselves against loss. • {c) Pease V. Uirst, 10 B. & C. 122. Sec Uartland y. Jtths, 1 II. & C. 667. ON CHANGE OF FIRM. 189 A customer deposited the title deeds of a copyhold estate with his bankers, the deposit being agreed to be as a security, not only for a sum already advanced by the bankers to him, but also for any other sums of money which might be afterwards advanced by the firm. After- wards, one of the firm died, and another person was after- wards added to the firm, every thing else remaining the same as before in the relations of the customer to the firm. About six years elapsed, when iifiat in bankruptcy issued against the depositor, and it became a question whether the deposit enured to the benefit of the new firm : — it was held that it did so ; for the circumstances amounted to a tacit acknowledgment, that the deeds were deposited with the new firm on the same terms as they had been with the old one {d). It may, probably, now be laid down with confidence, that the continuance of the same modes of dealing with the new firm as with the old, and the continuance of the deposit in the hands of the new fimi, will be construed into a tacit recognition by the de- positor, that the new hold the deeds for the like object and purpose as the old one did, and stand in the same relation to him. Nevertheless, in practice, it is desirable for bankers, in order to avoid all questions, as to whether a sufficient period has elapsed to enable the Court to say that the in- tention of the depositor was clearly manifested, and to make it quite certain that he was aware of the change, &c,, to ' have a fresh memorandum of deposit made, in order to secure the new firm. Two traders, in partnership, having had for many years an account with a bank, deposited with them certain title deeds of an estate belonging to one of the partners sepa- rately, as a security for the balance which might be due to the bank from the firm, from time to time, upon the ac- count current. No written memorandum was at that time [il) Ex parte Kensington, 2 Vcs. & B. 79, 83 ; Ex parte Oakes, 2 M., D. & De G. 234 ; Ex parte Smith, 2 M., D. & De G. 314. Sec 19 & 20 Vict, c. 97, s. 4. 190 DEPOSIT OF SECURITIES AGAINST ADVANCES. made of the object of the deposit ; but afterwards, upon a further advance by the bank, the owner of the title deeds signed a letter or memorandum stating the deposit to be for securing that as well as future advances. The banking firm had undergone some changes in its members after the deposit was made, and, in point of fact, all the advances made by the banking firm with whom the deposit was made had been paid off by the traders ; but fresh advances were made by the new banking firm, who continued to hold the deeds : it was, nevertheless, held that the security was a continuing security, and that the banking firm was equitable mortgagee of the estate to the amount of their advances {e). Release and Return of Securities. — Where a mortgage is made to several persons jointly they are in equity con- sidered as tenants in common of the mortgage money, and in case of the death of any one of them before the debt is paid off the survivors cannot give a good discharge for the debt without the concurrence of the representative of the deceased (/). A banker holding securities, which have been deposited with him by way of equitable mortgage, must deliver up the securities upon being paid the amount covered by the deposit (r/). {<') Ex parte Smith, 2 M., D. & Du G. 311. (/) VicJccrs V. Cowell, 1 Beav. 529 ; overruling Brdshr v. IFudHon, 9 Sim. 1. {(/) Fj- parte Adair, In re Gross, 24 L. T., N. S. 198. ( 191 ) CHAPTEE XX. DEPOSIT OF SECURITIES FOR SAFE CUSTODY. It is the custom of bankers to receive and to keep for the accommodation and convenience of their customers boxes of plate, jewels, -wills, deeds and securities, and as no charge is ever made for their custody, they are gratuitous deposits; the bankers, therefore, are only bound to take ordinary care of them, and if they are stolen by a clerk or servant, employed about the bank, the bankers -will not be responsible, unless they have knowingly hired or retained in their service a dishonest servant. Securities are also deposited with the bankers for the collection of the dividends or interest payable upon them, for which sometimes they charge a commission. But whether the bankers receive any consideration or not, or whether they are gratuitous bailees or bailees for reward, the test of their liability in the case of the loss of securities entrusted to their charge will be, have they exercised that degree of ordinary diligence which men of common prudence generally exercise about their affairs (ci). The following decisions illustrate the extent and measure of their liability : — In an action for damages against bankers as bailees for the negligent keeping of some railway debentures placed (a) Addison on Contracts, p. 632, 7th edit. A gratuitous bailee, in Coffgs V. Barnard, and othei? old cases, "was said to be liable only for gross negligence. If gross negligence means " greater negligence than the ab- sence of ordinary care implies, and is such a degree of negligence as excludes the loosest degree of care, and which almost amounts to fraud, ' ' as defined by Erie, C. J., in ChashUl v. Wright (6 E. & B. 899), these cases undoubtedly conflict mth the above statement of the law, and the degree of care to be used by a gratuitous bailee, and one for reward would not be the same. Whatever is meant by the word "gross," the present editor submits that a less amount of care is due from a gratuitous bailee, than from a bailee for hire. 192 DEPOSIT OF SECURITIES FOR SAFE CUSTODY. in tlieir care by a customer, in the ordinary way of their business as bankers, it appeared that the box containing such securities (of which the customer retained the key) was kept in a strong room in the bank, with the boxes of other customers, and specie and other secm-ities belonging to the bank. Access to this room was only obtained by passing through a compartment where a cashier sat by day, and a messenger slept at night. The strong room had two iron doors, which were opened by separate keys, which during the day were kept by the cashier who occu- pied the compartment. One of the keys was kept at • night by the cashier of the bank, and the other key by another officer of the bank. Beyond this strong room there were two other rooms, in the outer of the two un- coined gold, and in the inner bullion and unsigned notes were kept. The manager of the bank kept the key of the outer of these rooms, and one of the directors of the bank that of the inner. The owner of the box had free access to the room where his box was deposited during banking hours, in the presence of one of the bank clerks, when he had occasion to take out coupons from his debentures, for collection. While in such custody the cashier of the bank abstracted the debentures from the box, and made away with them. The Privy Council held, that the bankers, as gratuitous bailees, were not bound to exercise more than ordinary care of the deposits entrusted to them, and the negligence for which alone they would be made liable would have been, the want of that ordinary diligence which a reasonably prudent man takes of his own property of the like description. And that, consequently, there was no negligence to render the bank liable for the loss of the securities in question (b) . In a subsequent case it appeared that the owner of railway shares in two companies deposited the certificates for safe custody with a banking company, who undertook (A) Oiblhi V. M'MnUoi, L. E., 2 V. V. 317; 3S L. J., T. C. 25; and see note (a) on p. 191. DEPOSIT OF SECURITIES FOR SAFE CUSTODY. 193 to receive tlie dividends for a small commission. On re- ceiving the certificates from the companies, he gave his address in one instance at the office of the bank, and in the other at a club. The manager of the bank, who had the key of the safe where the certificates were kept, fraudu- lently sold the shares, and forged the name of the owner to the transfer. The companies wrote to him informing him of the transfers, and receiving, in one instance, no answer, and in another an answer in his name, forged by the manager, registered the transfer. He afterwards, on discovery of the fraud, instituted suits against the two companies and the transferees of the shares, in which he recovered the shares, but the Court gave him no costs. On the banking company being wound up, he claimed to prove against the company for the amount of his costs in the suits which had been occasioned by their negligence ; but the Court held, that the banking company was a bailee for reward of the certificates, and that it had been guilty of culpable negligence in keeping them by allowing the manager uncontrolled access to the safe, but that the loss of the costs was too remote a consequence of the negligence of the company for them to be held liable for it (c), A lady deposited with her bankers at Carlisle, for safe custody, East India bills, specially indorsed to them by (c) In re United Service Compmuj, E.c parte Johnston, L. R., 6 Ch. 212; 40 L. J., Chanc. 286, Lord Justice James, in delivering judgment, said : "Now it is not every loss whicli follows the negligence of a bailee which can be charged against the bailee. If these costs had been the costs of a simple detinue, brought for the recovery of possession of these documents, it may possibly be that the bank would have been liable for them. But these smts are for the rectitication of the registers of the railway companies, so as to restore the rightful o-mier to those registers, and enable him to receive the dividends. Now the causa causans which rendered these suits necessary was the forgcrj-. The possession of the certificates no doubt facilitated the forgerj', and was one of the means by which it was can-ied into effect ; but the consequence of the forgery was hardly one against which the bailor could be held to have been warranted by the bailee. The case may be tested by analogy. Suppose a key to be in the possession of a bailee, and to be lost by him, so that a burglar obtains possession of it, who steals property to which the key was the means of access, it could hardly be said that the bailee would be respon- sible for the whole loss thus sustained. So here it can hardly be said that the chancery suits were the necessary consequence of the negligence by which the certificates were lost.'' o. o 194 DEPOSIT OF SECURITIES FOR SAFE CUSTOnV. her, with instructions to receive the amount when due. These bills are not negotiable in the market, like common bills of exchange, and would, therefore, in the ordinary course, have been only deposited with her bankers for greater security. The balance of her account, exclusive of the amount of the bills, was in her favour, and con- tinued so up to the bankruptcy of the bankers. They charged discount on the bills in their account with her, and she might have drawn on them for their amount ; it being the custom of the bankers of Carlisle to con- sider ordinary bills so deposited, as cash. The bankers paid away the bills to a creditor, with whom the assignees afterwards settled an account, charging him with the amount of the bills, and receiving from him the balance due to the estate. Held, that the bankers had acted in violation of the directions under which the bills were deposited, and that the customer was entitled to be reim- bursed the whole amount of the bills from the assignees {d). It would not have made any difference if the' account had been overdrawn at the time the bankers disposed of the bills, because when bills are remitted to a person for a specific purpose, he is bound to perform that purpose, or return the securities ; if he receives the amount contrary to the directions of the remitter, he cannot apply it to the payment of his o^vn debt ; consequently, if the account had been overdrawn, it would not have been an excuse for the bankers to say, they had sold or discounted the bills, or paid them away, and carried the amount to the customer's account, and applied it in reduction of her debt to them (r). The criminal liability attaching to bankers, disposing of or misappropriating securities entrusted to their care, is treated in a subsequent chapter (/). {(I) Ex parte Bond, 1 M., D. & De G. 10. («) Ibid. ; Ex parte Brown, 3 Deac. 91, -which case also recog-ni/es the principle that bills roniitted, clothed with a trust, do not pass to the assignees on the bankruptcy of the recipients. (/} I'ost, Chapter on Ckimixal Liability of Bankeks. ( 195 ) CHAPTER XXI. THE customer's PASS BOOK AND ACCOUNT, The course of banking business in London makes the Passbook, only general mode of stating and adjusting accounts be- tween bankers and tbeir customers, residing in or near the metropolis, to be as follows : — A book, called a pass book, is delivered by the bankers to the customer, in which at the head of the first page, and there only, the bankers by the name of their firm are de- scribed as the debtor, and the customer as the creditor in the account ; on the debtor side are entered all sums paid to or received by the bankers on account of the customer, and on the credit side all sums paid to him or on his ac- count, and these entries being summed up at the bottom of each page, the amount of each, or the balance between them, is carried over to the next folio without further men- tion of the names of the parties, until the book being full, it becomes necessary to deliver a fresh one to the customer. For the purpose of having the book made up by the bankers from their own books of account, the customer returns it to them from time to time ; and, the proper entries being made by them up to the day on which it is left for that purpose, they hand it again to the customer, who thereupon may examine it, and if there appears any error or omission it is his business to send it back to be rectified ; if he does not, his silence is regarded as an admission that the entries are correct : but no other settlement, statement or delivery of accounts, or any other transaction which can be regarded as the closing of an old, or the opening of a new, account, or as varying, renewing or confirming (in respect of the persons or the parties mutually dealing) the credit given on either side, takes place in the ordinary course of business, () 2 196 THE customer's pass book and account. unless when the name or firm of one of the parties is altered, and a new account thereupon opened in the new name or firm. The course of business is the same between such bankers and their customers resident at a distance from the metro- polis, except that, to avoid the inconveniences of sending and returning the pass book, accounts are from time to time made out by the bankers, and transmitted to the customer in the country, when required by him, containing the same entries as are made in the pass book, but with the names of the parties debtor and creditor at the head, and with the balance struck at the foot of each account, and his silence is regarded as a tacit admission that the entries are correct («). H. and C, being partners in business, were indebted to their banker in 979/. In 1851, the banker, with the consent of H. (C. living at a distance), transferred his business to the Midland Banking Company, including the account in question. The partnership account of H. and C. commenced with this item of 979/. in the Midland Bank books, but whilst it was open H. paid in moneys to an amount exceeding 979/. A pass book was regularly sent to H. In 1852, the Midland Bank gave notice to the banker that they would not take to this account, there being in the deed transferring the business a proviso, that, at the expiration of twelve months as to such accounts as should not be taken to by the Midland Bank, they should, during a period not exceeding ten years, either accept or compel payment, or permit the same to remain due. An action was afterwards brought by the Midland Bank against H. and C. to recover the balance due. But the Court held the debt of 979/. to bo extinguished by the payment subsequently made by II. to the credit of the partnership account, and the assent to the appropriation to be infeiTcd from his not objecting to the pass book, and ((/) See the custom of ilcaliug, as found by tlie master in Bevaynea v. Noble, 1 Meriv. 635, 63G. THE customer's PASS BOOK A>:D ACCOUNT. 197 that after such extinguishment as between the Midland Bank and the partnership this account could not be treated as an existing debt remaining due (b) . A change of the title of a firm in a pass book, and entries therein to the credit of a new firm of the interest of securities given by the customer to the original firm, is notice of the assignment to the new firm of the securities given bj the customer to the old firm (c). The pass book between a bank and a joint stock com- pany is a good source of evidence, to show that the bank paid to the company calls due from A. ; one of the plaintiffs (the banking partnership) being treasurer of the company and A. a subscriber {d) . Credit given in a pass book binds the bankers, if on the faith of such credit the customer has altered his position, as by drawing on the fund, &c. ; for, by entering the sums to the customer's credit, they lead him to suppose that they have received them on his account ; where, however, there has been no such alteration the banker is allowed to show that the entries were made by mistake () Caton V. Caioii, L. 11., 2 II. L. 127. {(■) Mossitcr V. Miller, L. R., 3 App. Cas. 1124. {d) Harris v. Vmables, L. R., 7 Ex. 256 ; IFyniic v. Hughes, 21 W. E 628, E.x. ON CHANGE OF FIRM. 203 upon any bills, &o., made j)ayable at the banking bouse of the copartnership, does not bind the obligor, after the death of one of the partners, nor cover future advances made after such death and the taking in of another partner ; and the customer, who, at the time of the death, was indebted to the house, having afterwards paid off the balance incurred previously to the death, the obligor was wholly discharged (e ) . There is no doubt, however, that a guarantie might have been drawn in such terms as to serve as a continuing indemnity to the house, whatever might be the change of partners, if such intention appeared from the language used(/). The Courts, both of equity (^) and common law (Ii), appear to lean against increasing the liability of a guarantor to a banking firm in this respect. This prin- ciple of construction, narrowing the liability of a surety when the advances to be secured are to be made to a firm, arises quite as strongly from the nature of the transaction itself; for it is obviously an assumption to conclude that a party guarantees advances to A. and B., because he is willing to guarantee advances to A., B. and 0. . And since the decisions, which established this principle, the Legislature appears to have ratified and confirmed it, by enacting as follows (/) : — "No promise to answer for the debt, default or mis- carriage of another made to a firm, consisting of two or more persons, or to a single person trading under the name of a firm, and no promise to answer for the debt, default, or miscarriage of a firm, consisting of two or more persons, or of a single person, trading under the name of a firm, shall be binding on the person making such promise in respect of anything done or omitted to be done, after a change shall have taken place in any one or more of the (e) Strange v. Lee, 3 East, 484; S. P., TFesion v. Barton, 4 Taunt. 67. (/) See form in IJarIc v. O/lver, 2 Exch. 71, 72. (ff) Pcnibcrtun v. Oakcs, 4 Euss. 154. (h) Chapman v. Bcckinr/ton, 3 Q. B. 703. (0 19 & 20 Vict. c. 07, s. 4. 204 GUARANTIES TO SECURE ADVANCES. persons constituting the firm, or in the person trading under the name of a firm, unless the intention of the parties, that such promise shall continue to be binding notwithstanding such change, shall appear either by express stipulation, or by necessary implication, from the nature of the firm or otherwise." Since this statute, therefore, guaranties may either ex- pressly stipulate for the continuance of the undertaking, (when the intention is that it should continue,) notwith- standing changes in the firm ; or if the parties choose to take upon themselves the risk of determining that the firm is of such a nature as necessarily to imply the continuance of the guarantie, notwithstanding the change, they may do so, and need not insert an express provision to that effect ; and so they need not insert an express provision, if they choose to incur the risk of proving aliunde this to have been the intention ; but it is manifestly the safe and most convenient course in all cases to insert an express stipulation for the continuance of the instrument, notwith- standing any change in the constitution of the firm. Continuing Continuing Guarantee as to Amount a)id Time. — Whether ^araourTt^^ the liability of a surety is or is not a continuing one as to and time. amount, (that is to say, whether it is limited to a particular debt, or extending to a series of debts,) or time, or both, is simply a question of construction, and is to be gathered from the instrument containing the guarantie or the cir- cumstances of each particular case. In Coles v. Pack («'), the following words were held to constitute a continuing guarantie as regards both amount and time. " Now I do hereby, in consideration of your forbearing to take immediate steps for the recovery of the said sum, gua- rantee payment of and agree to become responsible for any sum of money for the time being due from F. to you, whether in addition to the said sum or not." (t) L. R., 5 C. P. 65. CONTINUING GUARANTEE AS TO AMOUNT AND TIME. 205 So, where a father gave his son a promissory note for 2,000/., which was indorsed by the son, and discounted by a banking company, who took from the father an agree- ment under seal, that in consideration of its discounting the note, certain deeds of the father's deposited at the same time should remain a security for all money due or to become due from the son to the company on any account whatsoever, and at the date of the agreement the son owed the company 3,000/. upon a running account, and the amount was subsequently increased to 5,000/., the agreement was considered to be a continuing guarantie, and the bank was held to be entitled to prove against the father's estate, not only for the 2,000/., the amount of the note, but for all sums due to them from the son (k) . A debtor and his surety executed a joint and several bond for 14,000/. conditioned for avoidance if they or either of them should in satisfaction of the debt of 7,000/. then due from the debtor to the obligee pay the 7,000/., with a proviso that the surety should not be liable under the bond for a sum or sums exceeding altogether in debt or damages 1,300/. The debtor having paid 1,000/., part of the debt, and then filed a petition for liquidation, the obligee proved for and received a dividend of 9s. 2d. in the pound on 6,000/. under the liquidation. After deducting from the 7,000/. the 1,000/. and the dividend, there re- mained more than 1,300/. due. The obligee having brought an action on the bond against the surety to recover 1,300/., the surety contended that he was entitled to deduct from the 1,300/. a rateable proportion of the dividend, viz., 9s. 2d. in the pound on 1,300/., and was only liable for the balance : — Held, that the intention of the bond was that the surety should guarantee the whole 7,000/., though his liability was limited to 1,300/. ; that he was, therefore, not entitled to deduct a rateable proportion of the dividend, but was liable for the whole 1,300/. And in (A) Binyess v. Eve, 41 L. J., Chanc. 515 ; L. E., 13 Eq. 450. 206 GUARANTIES TO SECURE ADVANCES. the same case it was laid down that when a surety gives a continuing guarantie, limited in amount, to secure the floating balance which may from time to time be due from the principal to the creditor, the guarantie is, as between the surety and the creditor, to be construed {prhnd fade at least) as applicable to a part only of the debt co-extensive with the amount of the guarantie. But a guarantie limited in amount for a debt already ascertained, which exceeds that limit, is not xirlma facie to be construed as a security for part of the debt only {T) . A surety bound himself jointly to a banking company in 500/., the condition of the bond being that if the obligors should from time to time pay all and every such sum or sums of money as should become due to the bank for money advanced to surety's co-obligor, and pay interest at 51. per cent, per annum for such sum or sums of money as aforesaid, to be computed as is usual with the banking company in ordinary banking accounts with them, and also the lawful commission, charges or expenses incident to, or occasioned by, the transactions or matters between the bank and the co-obligor, and shoidd indemnify and save harmless the banking company from all actions, suits and expenses, and all liability whatsoever, by reason of the transactions and matters, then the bond was to be void ; provided that the principal moneys to be ultimately re- covered on the bond were thereby limited not to exceed 250/., and that the obligors or any of them should not be liable to pay, by virtue thereof, any greater principal sum than 250/. ; but that the bond should be a continuing security to that amount, for the sums from time to time owing as aforesaid, exclusive of interest (to be computed as aforesaid), commission, cost, charges and expenses; held, that the surety was liable on this bond only for 250/. principal moneys advanced, and interest accrued (0 Ellis V. Emmamiel, 1 Ex. D. 157 ; 46 L. J., Ex. 25 ; 34 L. T. 553 ; 24 W. R. 832. See also Ex parte Midland Bankim/ Co., 38 L. T. 395 ; Morrell v. Cou-an, 7 Ch. D. 151; HeJIidd v. Meadows', L. E., 3 C. P. 595; Woody. Friesiner, L. R., 2 Ex. CG, 282. CONTINUING GUARA^^TEE AS TO AMOUNT AND TIME. 207 upon that sum; but not for any further principal sum advanced by the bank {m) . It would appear that where there is a continuing Revocation, guarantie for advances from time to time to be made to another person, the guarantie can be determined by the guarantor at any time, subject to the payment of anything then due under it(«). Thus a guarantie for the space of twelve months for the due payment of all such bills as A. might discount for D. & Co., to the extent of 600/., may be revoked and countermanded by a notice given dui^iag the twelve months, although some discount may have been made and repaid before the notice (o). This right to revoke proceeds on the principle that each advance constitutes a separate consideration, and that under such a guarantie the advances are not made in pursuance of a request made once and for aU by the party who gives the guarantie, but in pursuance of a request sup- posed to be made by him from time to time as the advances are made, and that if before any particular advance is made the person giving the guarantie informs the person making the advance that he withdraws the guarantie, the advance is not made at his request, and he, therefore, is not liable for it [p]. Where, on the other hand, the considera- tion is not fragmentary but entire, as in the case of a per- son giving a guarantee to a firm that he will be responsible for the fidelity of some third party in consideration of their receiving him into their employ, there, inasmuch as the consideration for the guarantie, is given once and for all, it cannot be revoked at will, but must continue until the services are ended ((/), — save only in the case where the . (w) Meek v. jrallis, 27 L. T. 650. («) Burgess v. Eve, L. R., 13 Eq. 450. (o) Offord V. Bavies, 31 L. J., C. P. 319 ; 12 C. B., N. S. 748 ; Bradlury V. Morgan, 31 L. J., Ex. 462. Such a guarantie would, it seems, be revoked by death; Harris v. Fawcctt, L. R., 8 Ch. 866; 42 L. J., Chanc. 502 ; Coulthart v. Chmentson, 5 Q. B. D. 44, 46 ; Lloyd's v. Harper, 16 Ch. D. 290, 314. {p) See judgment of Cotton, L. J., in Lloyd's v. Harper, supra, p. 318. [q] Nor is such a guarantie revoked by notice of the death of the guarantor ; Lloyd's v. Harper, supra ; Culvert v. Gordon, 3 Man. & Ry. 124. 208 GUARANTIES TO SECURE ADVANCES. Appropria- tion. employe has been guilty of dishonesty, when the surety, after giving notice to the employer, is entitled to withdraw from his guarantie, and to relieve himself from any further liability (/•). Again, as may be seen from the following case, a con- tinuing guarantie may be discharged by an appropriation of funds of the surety in the hands of the creditor. A. & Co., bankers, advanced 2,000/. to B., a customer, by placing it to the credit of his general current account, and took as security a series of ten promissory notes, maturing at the rate of one per week during a period of ten weeks. C, as security for B., gave a written under- taking that, if the notes were not paid, he would secure the debt by a mortgage upon property of his own. Moneys were paid into B.'s account more than sufficient to meet the notes if they had been so applied, but as the account was at the same time largely drawn upon, it was at the dates of the maturing of the notes constantly overdrawn : — • Held, that A. & Co., having received moneys which they might have applied to the satisfaction of the notes, were bound so to have applied them to the relief of the surety before apj^lying them to the liquidation of the current ac- count, and that the surety was consequently discharged («). Discharge of surety. SURETYSHIP GENERALLY. Discharge of Suretij — By Variation of Agreement. — The rule as to the effect of a variation of the original agreement between the principals in discharging the surety has in a recent case been stated to be as follows. If there is any agreement between the principals with reference to the contract guaranteed, the surety ought to be consulted, and if he has not consented to the alteration, although in cases where it is without inquiry evident that the alteration (/•) Burgess v. Eve, supra; rhUllps v. Foxall, L. R., 7 Q. B. C66, 678; Sanderson v. Aston, L. II., 8 Ex. 73. (v) Kinnaird v. Wvhstcr, 10 Cli. D. 139 ; 48 L. J., Clianc. 348 ; 39 L. T. 494 ; 27 \V. R. 212. See also Browning v. Baldwin, 40 L. T. 248. TIME OR INDULGENCE GIVEN TO PRINCIPAL. 209 is unsubstantial, or that it cannot be otherwise than bene- ficial to the surety, the surety may not be discharged, yet, if it is not self-evident that the alteration is unsub- stantial, or one which cannot be prejudicial to the surety, the court will not, in an action against the surety, go into an inquiry as to the effect of the alteration, or allow the question, whether the surety is discharged or not, to be determined by the finding of a jury as to the materiality of the alteration or on the question whether it is to the prejudice of the surety, but will hold that in such a case the surety himself must be the sole judge whether or not he will consent to remain liable notwithstanding the alte- ration, and that if he has not so consented he will be dis- charged [f] . Time or Indnlgcnce oiven to Principal. — Where the ere- Time or iu- ditor has entered into a binding contract to give the prin- ^.J^fn to^ cipal debtor further time without the consent of the surety, principal, the sm-ety is discharged, provided the creditor has not, as he may do, expressly reserved his rights against him [n). The following case will exemplify this : — "W. Jones gave the follov/ing guarantie to a bank, on behalf of Henry Bowers : "HJENEY BowEEs' Mill AccottNT. " Please to open an account with, and honour the cheques of, Mr. H, Bowers on ' mill account ' for whom I will be responsible. " Carmarthen, Jai/uari/ 4, 1825. " W. Jones." {t) Per Cotton, L. J., in llohne v. Br'ms'kill, 3 Q. B. D. 49.j, iu which case, however, Brett, L. J.., disagreed as to the effect of the non- materiality of the alteration, saying — "The surety is discharged where there has been a material alteration of some specific provision of the agreement, but not otherwise." See also Sanderson v. Acton, L. R., 8 Ex. 73; 42 L. J., Ei. 621 ; Wilson v. Lloyd, L. K., IG Eq. CO ; Folak T. JEveritt, 1 Q. B. D. 669 ; 46 L. J., Q. B. 218. {n) Davci/ v. Prendcrgrass, 5 B. & A. 187 ; Black v. Ottoman BanJc, 15 Moore, P. C. 472 ; Boulor v. Mayor, 19 C. B., N. S. 76 ; Overend, Gurney % Co. y. Oriental Financial Corporation, L. R., 7 H. L. Cas. 348 ; Swire v. Bedman, L. E., 1 Q. B. D. 536 ; Maingay y. Lewis, 5 Ir. R., C. L. 220, Ex. To reserve a creditor's right against a surety there must be a dis- tinct expression of intention to reserve it. Overend, Gurney ^- Co. v. Oriental Financial Corporation, supra; Muir v. Craicford, L. R., 2 H. L. Cas. Sc. 456 ; Ex parte Charlton, 36 L. T. 561. G. P 210 GUARANTIES TO SECURE ADVANCES. W. Jones was an attorney, and the professional adviser of the bankers, and, at the time, had a hanking account with them. The bankers, upon receiving the document, opened an account with Bowers, and made various ad- vances to him up to February, 1827, when they ceased to advance to him. It was the course of business of the banking-house occasionally to take the acceptance of their customers for the balance appearing to be due on the face of their accounts, which were termed corers ; and the same was also shown to be the practice of a neighbouring bank. Jones was proved to have sometimes been consulted by the bankers, as their professional adviser, with respect to these acceptances ; but it was not proved that he had per- sonally any knowledge of the practice to require these bills as covers for overdrawn accounts. In February, 1828, without Jones's knovdedge or con- sent, the bankers took Bowers's acceptance, at three months, for the amount of their balance against him, and this bill was carried to the credit of his account, but was dishonoured at maturity. In 1832, the bankers became bankrupt, and in an action by their assignees against Jones, commenced in 1833, it v/as adjudged that the bankers, by taking the acceptance, had given time to Bowers, the principal, and thereby had discharged Jones, the guarantor or surety (,r). Where a surety guarantees a series of payments to be made at stated periods, and time is given to the principal debtor in respect of one payment by a binding agreement, the surety is discharged from liability in respect of that payment, but not in respect of future payments (/y) . The acceptance by a bank of a fresh security without any binding engagement by them to give time to A., does not discharge the surety {z) . {x) JTowcU V, Jones, 1 C. M. & R. 97. See also Uvans v. I}remridffC, 25 L. J., Chanc. 102. {>/) Croydon Commercial Gas ^ Colce Company v. Dickinson S; FoUaril, L. R, 2 C. P. D. 4G ; 4G L. J., C. P. 157. (z) Bell V. Banlcs, 3 M. & U. 258. See 7 H. L. Cas. 348, infra; Sioire V. Redman, 1 Q. B. D. 530. NON-DISCLOSURE AND FRAUDULENT CONCEALMENT. 211 Again, if tliere are two co-sureties and a further loan is made by the creditor to the principal, and the creditor takes an additional security for that and the former loan, and gives fuiiher time to the principal and one of the sureties, the other is discharged {a). And if, after a right of action has accrued to the creditor against two or more persons, he is informed that one of them is a surety only, and after that he gives times to the principal debtor with- out the consent of the surety, the rule as to the release of the surety equally applies {b) An agreement with a third person to give further time to the principal debtor will not discharge the surety (c). In equity it was held that a surety was released in the case of a debt due under seal by a mere verbal agreement to give further time {d) ; and since the 17 & 18 Yict. c. 83, such an agreement has been made capable of being set up by way of equitable defence. Non-disclosure and Fraudulent Conecahnent. — As to how By non- far a person receiving a guarantie is bound to disclose the frauduieut^^' v/hole previous dealings between himself and his principal concealment, debtor, the law is found thus stated by Mr. Justice Fry in Davies v. London and Provincial Marine Assurance Co. (e) : "It has been argued here that the contract between the surety and the creditor is one of those contracts which I have spoken of as being iiherrinue fidci^ and it has been said that such a contract can only be upheld in the case of there being the fullest disclosure by the intending cre- ditor. I do not think that that proposition is sound in law. I think that, on the contrary, that contract is one in which there is no universal obligation to make dis- closure ; and therefore I shall not determine this case on {a) Vyner v. ITophins, 6 Jur. 889, per Brace, V.-C. {b) Per Lord Cairns, in Overend, Gimicy % Co. v. Orlcnlal Tlnanclid Cor' poralion, L. 11., 7 H. L. Gas. 348, 360. (c) Frascr v. Jordan, 8 E. & B. 303. {d) See Davei/ v. Frendergrass, 5 B. & Aid. 187, 192. [c) 8 Ch. D. 4G9, 475. p2 212 GUARANTIES TO SECURE ADVANCES. that view. But I do think that the contract of suretyship is, as expressed by Lord "Westbury in Williams v. Bayley (d), one which ' should be based upon the free and voluntary agency of the individual who enters into it.' I think that principle especially applicable here, because there is no consideration in this case, as in many cases of suretyship, for the contract so entered into ; and, therefore, I think, to use the language of Lord Eldon, in Turner v. Harvey (e), it is a contract in respect of which a very little is sufficient. Very little said, which ought not to have been said, and very little not said which ought to have been said, would be sufficient to prevent the contract being valid. It is one, furthermore, in which I think that everything like pressure used by the intending creditor will have a very serious effect on the validity of the contract ; and the case is stronger where that pressure is the result of maintaining a false conclusion in the mind of the person pressed." Tho officers of a company, believing that the retention of money by one of their agents amounted to felony, directed his arrest. Certain friends of his came to the officers of the company and proposed to deposit a sum of money by way of security for any dej&ciency. On the same day the com- pany was advised that the act of the agent did not amount to felony, and the directions for the arrest were with- drawn. Later in that day the friends of the agent had a second interview with the officers of the company, and agreed to deposit a sum of money as security for his de- fault, no mention being made of the withdrawal of the directions for the arrest. The sum of money was after- wards deposited with trustees on an agreement for the security of the company. And it was held that the change of circumstances ought to have been stated to the intending sureties, and that tho agreement was to bo rescinded, and the monies returned to the sureties (/). {d) L. R., 1 H. L. Cas. 200, 219. {e) Jac. 169. (/) 8 Cli. D. 469, 173. Sec also Xvrth Britkh Insurance Company V. Zhyd, 10 Exch. 523. RELEASE OF SURETY TO THE EXTENT OF SECURITIES. 213 Certain bankers advanced 2,600/. to A. upon the security of an indenture of mortgage to tliem of certain property of A., and also of a joint and several promissory note of the same date as the deed, in which a third party joined with A. as sm'cty. At the time of this advance A., who had long been a customer, owed them SOOi'., and it was arranged between him and the bankers, that this sum should be deducted from the 2,600/, but neither by the recital in the mortgage deed or otherwise was the surety apprised that such was the ease, and that recital moreover expressly, but falsely, stated that the entire interest in a 1,500/. policy of assm-ance, ah-eady deposited with the bankers, would, inasmuch as the 800/. had been repaid to the bankers, be available as collateral security for the 2,600/. The mortgage deed was prepared by the bankers' solicitor, and read over in his office to the surety and A. previously to its execution and to the surety's signature of the promissory note. The circumstances were held to constitute such a fraud in law as released the surety, although it was not suggested that any intentional fraud was imputable to the bankers personally {g). jBu the Creditor^ iahincj Securities. — Thus it is a rule By tliccrcdi- that a sm-ety is entitled to the benefit of any security or^faiifng to' which the creditor has received for the debt, though he make avail- . able, securities has received it after the contract of suretyship ; and there- to the benefit fore, where the creditor has so dealt afterwards with such gf^j.^^^ 'Ig g^! security, that on payment by the surety it cannot be given titled, to him in the same condition as it was when the creditor first acquired it, the surety is discharged to the extent of that security (//). The defendant was surety for the repayment of a sum Ig) stone v. Compton, 5 Binsf. N. C. 142. (/() Campbell v. BothwcU, 47 L. J., Q. B. 144; 38 L. T. 33. Sec also Liqu'ulators of Overend, Gurnctj ij- Co. v. Liquidators of Oriental Financial Corporation, L. K., 7 H. L. Oas. 348 ; Merchants Bank of London v. Maude, 18 AV. R. 312. 214 GUARANTIES TO SECURE ADVANCES. of money advanced by the plaintiff to tlie principal debtor. As a further security for the advance, the principal debtor deposited with the plaintiff a policy of life insurance. The principal debtor subsequently became bankrupt, the ad- vance remaining unpaid, and the plaintiff proved against his estate for the full amount of the advance without valuing the policy of life insurance as a security, which was in consequence claimed by the trustee in bankruptcy as part of the bankrupt's estate. It was contended by the defendant in an action against him as sm-ety, that by not valuing the policy, and so depriving him of the benefit of it, the plaintiff had discharged him from all liability as surety. Held, that the omission to value the policy was at most a mere neglect or omission on the part of the plaintiff, and as such did not discharge the defendant from all liability as surety, but only to the extent of the value of the policy (/). Richard Cox v/as a banker in copartnership with Messrs. Morrell, under the firm of Cox & Morrell. He was also engaged in collieries vv^ith one Davies, under the firm of Cox & Davies. Cox & Morrell were in advance to Cox & Davies. Richard Cox having applied to his partners for a further advance, it was agreed that they should advance a further sum upon his brother, John Cox, becoming security for the repayment of 3,000?. John agreed, as surety for Eiehard, to execute a joint and several bond to James and John Morrell for 3,000/., upon having a counter bond for the like sum from Cox & Davies to indemnify him. A joint and several bond was executed by John but not by Eichard ; the counter bond was given by Cox and Davies, and fiu'ther advances were made by the bank. Some time after this, Eichard ceased to bo a partner in the bank. (i) Ralnhoiv v. Jt"j'ji)is, b Q. B. D. 13S ; 19 L. J., Q. 13. 353 ; 28 W. R. 423. RELEASE OF SURETY TO THE EXTENT OF SECURITIES. 215 The bankers were considered to have released tlie surety by neglecting to obtain the bond from the principal debtor Richard Cos {J). The acceptor of a bill of exchange knows that by his acceptance he does an act which will make him liable to indemnify any indorser of it who may afterwards pay it. The indorser is a surety for the payment to the holder, and having paid it, is entitled to the benefit of any securities to cover it deposited with the holder by the acceptor. He is so entitled, whether at the time of his indorsement he knew, or did not know, of the deposit of those securities. The sm-ety's right in this respect in no way depends on contract, but is the result of the equity of indemnification attendant on suretyship. A., a member of a firm pledged his separate estate to a bank to secm^e to the bank the balance for the time being owing to the bank from the fi.rm. Afterwards the firm accepted bills of exchange which were indorsed by B. to, and discounted for him by, the bank. The firm became bankrupt and the bills were dishonom-ed at maturity. The bank having demanded of B. payment of the amount due on the bills, B. claimed to be a surety for the firm in respect of the bills, and to be entitled as such sm-ety to the benefit of the securities held by the bank : — Held, that B. was entitled to receive them (A-). Again, a surety is released, to the extent of the value of goods assigned by the x^rincipal debtor, by the creditor's failing to register the assignment under the Bills of Sale Act, and by his not taking possession when default was made in payment of interest, and when bankruptcy was to his knowledge impending (/). Bi/ Release of Debtor. — As by giving time to the prin- By release of {j) Bonscr v. Cox, 4 Eeav. 379 ; iS'. C, G Boav. 110. {k) Duncan, Fox % Co. v. Kcw South Wahs Banh, 6 App. Cas. 1, reversing' 11 Ch. D. 88. (?) WuUfN. Jai/, L. E., 7 Q. B. 756 ; 41 L. J., Q. B. 322. 216 ■ GUARANTIES TO SECURE ADVANCES. cipal debtor the creditor releases the surety unless he expressly reserves his rights against him, so does he re- lease him by giving the debtor an absolute release of the debt, unless there is a reservation of the rights against the surety. A surety is discharged by the principal creditor's becoming a party to a composition deed releasing the prin- cipal debtor (wj), unless there is an express reservation made against him («), because the effect of his doing so is to voluntarily discharge the principal debtor from any further liability. The principal debtor's obtaining an order of discharge in bankruptcy or liquidation, however, does not discharge the siu-ety (o) . A customer and another person as his surety signed a joint and several promissory note, payable to the bankers, to secure them, &o., and they afterwards executed a com- position deed, whereby, in consideration of four shillings in the pound, the bankers and other creditors released the customer from the payment of the debts respectively set opposite their names, the amount of the promissory note being set opposite the bankers' names ; the deed contained an express clause that it should not operate to invalidate, prejudice or affect any bonds, bills, notes or other securi- ties, joint or several, &c., as to the claim against any such surety ; the deed was held clearly not to release the surety, there being no fraud on the other creditors, since, the clause appearing on the face of the deed, all who executed it must be taken to have been aware of, and agreeable to, the reservation of the rights against the surety (p) . It must be remembered, as previously stated, that to reserve a credi- tor's right against a surety there must be a distinct expres- sion of intention to reserve it {q). {m) Green v. JFi/nn, L. E., 4 Ch. 204 ; Lcathlcij v. Spijer, L. R., 5 C. P. 595 ; KcarsJey v. Cole, 16 M. & W. 128. (/() BatcsoH V. Gosling, L. E., 7 C. P. 9; CragoeY. Jones, L. R., 8 Ex. 81. (o) McGrath v. Gray, L. R., 9 C. P. 216 ; Breslaur v. Broun, 3 Ajip. Cas. 672 ; Ex parte Jacobs, In re Jacobs, 10 Clianc. 211 ; Ellis v. Wihnol, L. R., 10 Ex. 10 : Ex parte Aqra Bank, In re Barber, L. R., 9 Eq. 775. {p) Xorth V. Wakefetd, 13 Q. B. 53G. Iq) See aiite, p. 209. BY RELEASE OF DEBTOR. 217 Cases of composition with creditors frequently occur in wliicli tlie interests of bankers, upon guaranties, are deeply concerned, and the form in which such guaranties are ex- pressed ought always to be such that the bankers should be secured of a priority of repayments of advances over the creditors under the composition deed. For this purpose it is necessary that the guarantie should be made not conditional to pay on failure of the traders to repay, but absolute. An illustration will be found in the following case, in which the bankers sued the trustees under the composition deed to recover the amount of their advances. Carr & Co., being insolvent, compounded with their creditors by agreeing to pay them a composition of seven shillings and sixpence in the pound, in three instalments, and execute a conveyance of their real and personal estate to certain trustees, in trust to permit them, Carr & Co., to carry on the business, subject to the control of the trustees, and to pay thereout to the creditors the three instalments ; and, in case of full payment, to reconvey and reassign the estate to Carr & Co. ; but upon default of such payment then in trust to sell, and, after deducting out of the pro- ceeds interest, costs and amount of mortgages, to divide the remainder amongst themselves and the other creditors. Carr & Co. continued, accordingly, to carry on the business, and opened an account with a banking company, from whom they obtained large advances. The bank ap- plied to, and obtained from, the trustees the following guarantie : — " Carr & Co., having assigned over all then' real and personal estate to us in trust for securing a composition of seven shillings and sixpence in the pound to their several creditors executing such deed, and it being necessary to open a banking account for the pm'pose of carrying on the said trade, in order that the stock and goods on hand may be wrought up and converted into money, for the purpose of paying such dividends ; and you having, at om' request, consented to open a banking account on the credit of the 218 GUARANTIES TO SECURE ADVANCES. names of Carr & Co., or of any person or persons for the time being carrying on that concern : we do hereby promise and engage that any sum or sums of money to become due to you or to the said banking company, in respect of such account, shall, in the first instance, be paid to you out of the net proceeds of the trust esta,te, so far as the same will extend to pay." Further advances were made by the bank to Carr & Co. subsequently to this guarantie. The trustees subsequently sold the property of Carr & Co., under the provisions of the composition deed, and the proceeds were insufficient to pay the creditors the compo- sition of seven shillings and sixpence in the pound ; the Court held, that the meaning of the guarantie was not that the trustees should be liable to the bank out of the proceeds realized from the estate of Carr & Co. only after payment of the composition of seven shillings and sixpence to the creditors, but that they were liable, in the first instance, to repay, out of the proceeds, the whole amount of the advances made by the bank to Carr & Co., as vv^ell before as after the guarantie, and the guarantie was held to extend to advances made before it was given, notwith- standing the objection was pressed upon the Court, that the recital, stating it to have become necessary to ojjeii an account, &c., pointed only to future advances {>•), A surety who guarantees the payment of an instalment under a composition resolution, is not released by the debtor's being subsequently adjudicated bankrupt at the suit of creditors who arc not bound by the resolution (s). By payment Fai/i)iC)it. — Payment by the principal debtor discharges y pnucipd . ^1^^ surety and part payment does so pro tanto, but not a payment that has to be regarded as being a fraudulent preference {t) . (?•) Wilson V. Craven, 8 M. & W. 584, 595. (.s) Ghfjg V. Gilbci/, 2 Q. B. D. 209 ; 4G L. J., Q. B. 325. [t) Sec rdtz V. Cooke, L. 11., G Q. B. 790; iralwyn v. St. Quentin, 2 Esp. 515. PROMISSORY NOTES AS GUARANTIES. 219 ProDu'ssori/ Notes as Guaranties. — A guarantio is some- Promissory times given in the form of a promissory note signed by the "uaTanties! ^^ guarantor ; but in such ease the instrument will often be found to operate as an agreement, and must consequently be stamped accordingly, in order to be made effectual. Thus, where tAvo persons, as guarantors or sm^eties for a customer of a bank, signed together with him an instru- ment in the following form : — " Wc jointli/ and sevcmUi/ promise to pay the sum of 1001. to the Lincoln and Lindsoj Banhinrj Company, or their order^ on demand, with interest.^' And on the back of the document signed this indorse- ment.: — " The within note is given for seeurinrj floating advances from the said Jjanhng company to the customer, with interest from the respective times when such advances have been or may he made, together with commission, stamps, postages, and all usual charges and disbursements, not exceeding in the whole, at any time, the sum of 100/." In an action by the bank against one of the two sureties on the note, to which there was a plea of the Statute of Limitations, and payments were shown to have been made by the customer, in reduction of the balance due on the banking account, within sis years before action, the Court held, that it was essential to the plaintiff's ease to take notice of the indorsement, in order to point the payments to the note, and to show it to be a secmuty for the floating balance, for which purpose it was an agreement, and required to be stamped (?/). If the secmity or guarantie taken was in the form of a joint and severod promissory note, payable to the bankers on demand, and signed by the customer and the guarantor for a given sum, it was at law no defence to an action against the guarantor on the note to allege that he made the note as a surety, and for the accommodation of the {/() Cholmdcy v. Darlcij, M M. & W. 344. 220 GUARANTIES TO SECURE ADVANCES. customer, witli the knowledge of the bankers, and that they, after the note became due and payment had been demanded of the customer, being holders, agreed, without the consent or leave of the guarantor, to give time to the customer, unless he can show that there was a specific agreement on the part of the bankers to take the note from the guarantor as a surety only (r). In equity, how- ever, such a defence was good ; and, consequently, in law might be set up by Avay of equitahle i^Iea {x). It is not uncommon for joint stock banks to take a joint and several promissory note, signed by the customer and other parties, the latter of whom are intended to be sure- ties for the former, in order to secure any balance that may become due to the bank on his account with them, or to secure advances made by them to him. It is very material that the persons having the manage- ment of the business or of the accounts of the bank should be satisfied that there is nothing in their deed of settle- ment to prohibit any arrangement of this nature. Many deeds of settlement contain stringent provisions to prevent the funds of the company being advanced, or risked upon merely personal security. There is no invariable rule that all payments made sub- sequently to giving a bond by a borrower and sureties to a bank are to be applied in immediate and final liquidation of the sum named in it, or of the first items in the bor- rower's debit : or that if the borrower after the giving of the bond, on a long course of transactions, be for a time in advance to the bank, the bond is thereby satisfied (y) . It may, in default of express stipulation, be inferred from the language and conduct of the parties after execution of the bond, that the intention was for the bond to stand as a (v) ManUy v. Boycott, 1 El. & Bl. 16 ; Trice v. Edmunds, 10 B. & C. 578; Strong v. Foster, 17 C. B. 201. But see Jlall v. Wilcox, 1 M. & Kob. 58. [x) Davirs v. SlamhnHlc, G Dc G-., M. & G. 679; UoUicr v. Eijrc, 9 C. & r. 45 ; Stron;i v. Foster, 25 L. J., C. P. 106. (//) Hcnnikcr v. Wiyg, 4 Q. B. 792. PROMISSORY NOTES AS GUARANTIES. 221 continuing security, in wliicli case tlie rule of application of payments would not apply (z) . A joint and several promissory note is given to a banker by a customer and his surety to secure advances made by the banker. The customer afterwards pays into the bank generally sums exceeding the amount of the advances, but also draws out to a still larger amount, and becomes bank- rupt. In such case the siu-ety is liable, for he cannot insist that the payments should be appropriated in dis- charge of the sum secured by the note {a) . A bank being in advance to a customer took a promis- Promissory ,. Ill- 1 T • '£ 111 i. notes bv mar- sory note signed by him and his wiie, who had no separate j.-^^,^ women, property. The husband died insolvent, and nine days after his death a partner in the bank went to the house of his widow, taking with him a proper stamp, and asked her if she could pay any money on account, and on her answering that she could not, obtained her signature to a new note written by himself upon the stamped paper. It being doubtful whether she knew that she was not liable upon the original note, and nothing having been said at the interview respecting her non-liability, the note so obtained was considered in equity to be invalid and un- available in the hands of the bankers for the advances made to her husband {b). But when a married woman, having a separate estate in property settled upon her, joined with her husband in a promissory note, payable on demand, to secui'e the balance against him at his bankers, and a balance continued against him until after his death, which happened about seven years afterwards, and after this event she signed a new promissory note for the un- secured balance, a Court of Common Law determined that the latter note was binding upon her, as there was a good consideration for it (c) . (z) Ilenniher v. Wigg, supra. {a) Ex parte Whitworth, 2 M,, D. & De G-. 16-i, [b) Coward v. Hughes, 1 Kay & J. 443. {c) La, Touche v. La Touchc, 3 H. & C. 57G ; 34 L. J., Exch, 85. ( 222 ) CHAPTEE XXIII. GUARANTIES FOE, GOOD CONDUCT OF CLERKS. With respect to guaranties for the good conduct of clerks of bankers, a point wkicli lias already been ad- verted to, namely, wlietlier tbe guarantie that is taken is in such a shape as to stand good in case of a change in the members of the banking house, arises more frequently in cases of guaranties for the fidelity of clerks than in those of guaranties for the repayment of advances to customers, and therefore requires to be more fully developed. In considering this subject the Courts are chiefly guided by the intention of the parties. This is mostly discover- able only from the expressions they have used in the instrument of guarantie. In other words, it is most im- portant for the secmity of bankers that the language used should clearly and undeniably demonstrate the in- tention that the guarantor, whether he undertakes for the good conduct of the clerk during a limited or an undefined period of time, should be bound to the hanJdng house, not to the persons who are the members of the establishment at the date of the guarantie ; because, in case the guaran- tor is only bound in the latter way, upon any change in the partnership, by death, by retirement or by taking in fresh partners, the new partnership might find themselves unable to enforce the obligation. The following is an illustration of what has just been said as to the effect of a change of partnership. A guarantor executed a bond, whereby he undertook to A. for the fidelity of a clerk, so long as he should continue in A.'s service as clerk. A. took a partner, and brought an GUARANTIES FOR GOOD CONDUCT OF CLERKS. • 223 action on the bond, and assigned as a breach that the clerk had received money on account of the partnership, and had not paid it over to the partners ; but A. was not permitted to recover, the Court saying that when A. took a partner there was an end of the obligation ; that the condition was confined to A. alone, and the breach assigned was not within the condition, and there was nothing to show the guarantor to have intended to be bound for the clerk's fidehty to any other person than A. (a). This decision, it is true, has been questioned by some judges (b) ; but the principles on which it is founded do not appear, either expressly or impliedly, to have been decided to be inapplicable to cases where the facts were identical, and the terms of the guarantie equivalent (c). In connexion with this class of cases may be here men- tioned one which can, however, in general only be appli- cable in instances where a banking-house is conducted by a single person, without partners. Where a bond was taken that a clerk should serve faith- fully, and account for all money, bills, notes, &c., which he should receive, &c., to the banker and his executors, ad- ministrators and assigns, it was held that such bond did not make the surety liable for money, &c,, received by the clerk in the service of the executors, &c., who continued the business and retained him in the same employment {d). This case tm^ned upon the intention, which was held to be to guarantee the service to the testator and no longer, and (a) Wriffht v. BicsscU, 3 Wils. 530 ; 2 W. Bl. 934. (i) In Barckn/ v. Zncas, 3 Dougl. 321 ; 1 T. R. 291, n. But Barcl(i>/ v. Zucas has not escaped without much question ; see the note at the end of the report in 3 Dougl. 321. However, Chapman v. Bccf:ir>gion, 3 Q. B. 722, recognizes the principle of it, and the same seems to be the ground of de- cision in Metcalfe v. Bruin, 12 East, 400, and Wilson v. Craven, 8M. &"W. 584 ; viz. that the bayik was the same all along. {<•) Dry V. Lavetj, 10 A. & E. 30. {d) Barler v. Barker, 1 T. E. 287; hut compare j;r>- Lord EUenborough, C. J., Siranffe v. Zee, 3 East, 490. Lord JVIansfield, C. J., 1 T. R. 295, distinguishes Barclay v. Zaeas, by observing that there the same trade was carried on by the original masters in the same manner, and the only dif- ference was the introduction of a new partner. 224 - GUARANTIES FOR GOOD CONDUCT OF CLERKS. must be considered with reference to the statutory enact- ment (passed since its date) mentioned above (e) . In a case where a bond was given to guarantee to a company not incorporated the faithful services of a clerk, and the bond was made to and with trustees on behalf of the body : the Court held, construing the instrument with regard to the obvious intention of the parties, that it might be sued upon by the trustees at any time during the con- tinuance in the service of the actual body of persons car- rying on the same business under the same name, notwith- standing any intermediate change of the original holders of the shares, either by death or transfer (/). So where a joint- stock banking company had been esta- blished under the 7 Gfeo. IV. c. 4G, and a guarantie was given to it, and tlien, upon a considerable accession of pro- prietors and capital, and an increase in the number of directors, the company took another name, but was not shown to differ in its constitution, but remained the same bank, though with a different name : it was held, that its public ofhcer might sue and recover upon the guarantie given to the former establishment ( g) . Another point to be considered is, that a guarantie for the faithful services of a clerk, given at a time when his employment comprises a certain routine of duties, will not extend to cover other or additional duties that may be imposed on or accepted by him ; thus if a clerk to a bank, for whose good conduct as cleric a guarantie has been given, is made manager, and it is shoicii conclusively that lie ceased to he cleric ichen he became manager, so that no breach of the bond could have happened after he became manager, that will bo an answer to an action by the bankers on the bond against the surety, founded on mis- conduct as manager (//). (e) See supra, p. 203. (/) Metcalfe v. lirui)/, 12 East, 400, Iff) Wilson V. Craven, 8 M. & W. 584. (A) Anderson v. Thornton, 3 Q. B. 271 ; and see SkUhtt v, Tktchcr, L. R., 1 C. P. 217; 2C. V. 400. GUARANTIES FOR GOOD (X)NDUCT OF CLERKS. 225 It is scarcely necessary to observe tliat tlie conduct, whicli amounts to a default on the part of tlie clerk, and which renders the surety liable upon his undertaking, must be some act or omission, some malfeasance or non- feasance, within the scope of the duties appertaining to the situation he fills. A clerk of a provincial bank (in Devonshire), who was sent by the manager, at the request of a customer, to his residence, about eleven miles from the bank, in order to receive a large sum of money, to be placed to the cus- tomer's account with the bank, and who, casually, on his way back, lost the money out of his pocket, was held to have received the money in the course of his employment as clerk; and although the jury found it not to be the custom of bankers in that part of the country, to send for their customers' money as above stated, a surety, who had guaranteed the bank that the clerk " should well and faithfully serve them as a clerk, and should not cancel, obliterate, spoil, destroy, waste, embezzle, spend or make away with any of the books, papers, writings, stamps, cash, bills of exchange, promissory notes or other property of the bank, or of any of the customers, which should be deposited in his hands, or intrusted to his custody or possession, or come to his care, custody or possession," was responsible to the extent of the moneys lost (e). The same would be the decision in case of the pajonent of a cheque, or the receipt of money, after hanking hourSy or of sending the clerk to London on a sudden emergency, to obtain funds, or the like (/.•) . The fact of a clerk's having received into his personal possession a sum of money, and having lost it, is strong evidence of negligence ; but it would have been an answer to the action above referred to, to have shown that the loss had been occasioned by robbery before the clerk (i) mivllle V. Boidfje, G C. B. 450. \k) See 6 C. B. 454. O. Q 223 GUAllANTIES FOR GOOD CONDUCT OF CLEUKS. could liave got back to tlie bank, and -witliout bis de- fault (/). The reason for taking sueb security is not only the obvious one, tbat, in case of any embezzlement by the clerk, the banker may have the means of protecting him- self against the loss thereby caused, but also that he may have the same protection, in case of any loss arising from the merely careless or thoughtless inattention to his duty of the clerk, in Vv'hich case, without such seem'ity, the loss must ultimately fall on the banker, assuming the clerk to be unable to make it good {m) . Evidence. — In cases of guaranties or securities of any kind, taken for the good behaviour of clerks, it is material to bear in mind that whatever is evidence available against the principal, is available against the surety. Thus, where bankers sued the obligor of a bond given for the fidelity of a clerk, entries of receipts of money by the clerk in the books kept by him in discharge of his duty as clerk to them were held to be, after his death, evidence against the surety of the fact of his having re- ceived the moneys therein mentioned, it being part of his guaranteed duty to keep those books (;?). Discharge of Guarantor. — As has been already stated (see p. 207), a person giving a guarantee to a firm that he will be responsible for the faithful services of a servant, cannot revoke it after once the consideration for that guarantee has been performed : that is to say, when once the service has commenced ; nor will his death act as a revocation of the guarantee, or discharge the guarantor. Thus, in May, 1863, a father, on the occasion of the admission of his son as an underwriting member of Lloyd's, addressed to the managing committee of that body a letter, by which {I) See Walker v. British Guarantee Association, 21 L. J., Q. B. 257; 18 Q. B. 277. (>«) liogcrs V. Kelly ^ 2 Camp. 123. («) Whitnash v. George^ 8 B. & C. 55G. DISCHARGE OF GUARANTOR. he held himself responsible for all his son's engagements in that capacity. Lloyd's was then a voluntary association, governed by certain bye-laws, under which a person once admitted a member could not be excluded from member- ship, except in the event of his bankruptcy or insolvency. The association consisted of underwiitiug members, non- underwriting members, and subscribers. The practice of the underwriting members was to underwrite policies of marine insurance for the benefit of various owners of property, both members of the association and outsiders ; but the policies with outsiders could only be effected through the agency of insurance brokers, who were either members of, or subscribers to, the association. The associa- tion as such incurred no liability on the policies under- written by its members. In 1871 the society was incorporated by Act of Parlia- ment, all the rights of the committee on behalf of the members being vested by the act in the corporation. In 1876 the father died, and notice of his death was shortly afterwards given to Lloyd's. In 1878 the son became bankrupt, and thereupon ceased to be a member of Lloyd's : — Held, by the Court of Appeal (affirming the decision of Fry, J.), that the guarantee was not determined by the death of the father, or by the notice of it, but that his estate was liable in respect of engagements contracted by the son after his death (o). Employer's Neglect. — If, however, in the case of a con- tinuing guarantie for the honesty of a servant, the master discovers that the servant has been guilty of acts of dis- honesty in the course of the service to which the guarantie relates ; and if, instead of dismissing the servant as he may do at once and without notice, he chooses to continue him in his employ without the knowledge and consent of the surety, express or implied, he cannot afterwards have ip Lloyd's V. Harper, IG Ch. Dir. 290. q2 228 GUARANTIES FOR GOOD CONDUCT OF 'CLERKS. recourse to tlie surety to make good any loss wliicli may arise from dislionesty of tlie servant during the subsequent Service (o). Similarly, the surety, after the servant has been guilty of dishonesty, may give notice thereof to the master and withdraw from his guarantie and relieve him^ self from any further liability (p). Non-disclosure. — What has been said in the previous chapter as to the duty of the employer to disclose any material fact likely to make the surety abstain from enter- ing into the guarantie applies equally to the form of guaranties now under discussion, and to which, therefore, the reader must be referred for information (q). Alteration. — Again, any variation in the agreement to which the surety has subscribed, that is made without his knowledge or consent, and which may prejudice him, or which may amount to a substitution of a new agreement for a former agreement, even though the original agree- ment may, notwithstanding such variation, be substan- tially performed, will discharge the surety. This may be illustrated by the following example : where a surety guaranteed the faithful and honest conduct of a clerk, who was paid by salary, and his employers, some time afterwards, changed this part of their arrange- ment with him, and paid him by means of a commission, which amounted to more than his former salary : it was held, that the surety was discharged by reason of the alteration (r). Again, A. became guarantor of the good conduct of a clerk in a bank ; and the clerk was subse- (o) Phillips V. Foxhall, L. R., 7 Q. B. G66 ; 41 L. J., Q. B. 293 ; 27 L. T. 231 ; Sanderson v. Aslon, L. R., 8 Ex. 73. (;;) Burgess v. Eve, L. R., 13 Eq. 450. {q) Seep. 211. (r) North Western liaihvaij Compaui/ V. Whlnraii, 10 Exch. 77. Wlieti the condition of the bond did not contain any stipulation, that the same sahiiy should bo continued, either express or implied, the guarantor •would not be discharged by a reduction of the salary. Frank v. Edwards, 8 Exch. 214; explained, 10 Exch. 81, 82. CIIAKGE OF FIRM. 220 quently appointed to a better situation in a brancli of the bank, and A. extended bis guarantie to tbe conduct in this new situation. The clerk afterwards undertook, on having his salary raised, to become liable to one-fourth of the losses on discounts, and then allowed a customer to overdraw, whereby the bank suffered loss. A. was held not to be liable for this loss to the bank, though it was within the terms of his original guarantie, because the fresh arrangement made icithout his knowledge was a dis- charge (s). Change of Firm. — Lastly, as has been stated, unless from the terms of the guarantie it can be seen that the inten- tion was to secure the good conduct of the clerk while serving the banking-house, whether the same persons who constituted the partnership remained in it or not, a change in the firm releases the surety (/). (,s) lionnr v. Macdonald, 3 H. L. Cas. 226. \t) See ante, p. 222. ( 230 ) CHAPTER XXIV. CRIMINAL ACTS OF SERVANTS, ETC. Larceny and Emhezzlcment by Clerhs or Servants. — By 24 & 25 Vict. c. 96, s. 67, it is enacted, tliat wliosoever, being a clerk or servant, or being employed in the capacity of clerk or servant, sball steal any chattel, money or valuable security, belonging to or in the possession or power of his master or employer, shall be guilty of felony; and, being convicted thereof, shall be liable, at the dis- cretion of the court, to be kept in penal servitude for any term not exceeding fourteen years and not less than three (now by 27 & 28 Vict. c. 47, five) years ; or he may bo imprisoned with or without hard labour or solitary confine- ment for a term not exceeding two years ; and, if a male under the age of sixteen, may be whipped if the court think fit in addition to the imprisonment. And as regards embezzlement it is enacted by sect. 68, whoever being a clerk or servant shall fraudulently embezzle any chattel, money or valuable security which shall be delivered to or receive or taken into possession by him for or in the name or on the account of his master, shall be deemed to have feloniously stolen the same, and punished accordingly {x) . The crime of embezzlement differs from larceny in that it is committed in respect of property which is not at the time in the actual or legal possession of the owner (y). On an indictment for embezzlement a prisoner may bo found guilty of larceny, and vice versa {z). By the Summary Jurisdiction Act, 1879 (42 & 43 Vict. c. 49), (x) Seo Ri'g. v. Xegus, L. R., 2 C. C. R. 3i ; iiVy. v. Foidkcs, ibid. 150. (y) Seo BlackBtone, bk, iv. p. 135. (r) Sect. 70. CRIMINAL ACTS OF SERVANTS, ETC. 231 a person between the ages of twelve and sixteen, cliarged with larceny or embezzlement (or an attempt) as a clerk or servant may with his consent be dealt with summarily, and if found guilty may be fined to the extent of ten pounds, or be imprisoned with or without hard labour to the extent of three months, &c., &c. And by the same act an adult, i. c. a person of the age of sixteen or up- wards charged with larceny or embezzlement (or an attempt) as a clerk or servant, may, provided in the opinion of the court the value of the property in respect of which the offence is alleged to have been committed does not exceed 40s., and the court thinks proper and he him- self consents to be summarily dealt with, be so dealt with ; and if found guilty be fined up to the sum of 20/., or be imprisoned with or without hard labour for any term not exceeding three months («). As regards this section, however, it is provided that if the offence is one which by reason of a previous conviction on an indictment of the person charged is punishable with penal servitude the court shall not deal summarily with the act. If a clerk commits an embezzlement on the bank, and his father, in order to cover his defalcations, transfers stock into the name of the banker, this is a composition of a felony to prevent a prosecution, and it seems that the value of the stock cannot be recovered, nor will the stock be ordered to be retransferred (5). But where a clerk in a banking company embezzled a large sum of money of his employers, and before his conviction he deposited the deeds of some real estates with the company, and directed a transfer of certain policies of assm-ance on his life to be made to the company, as a security, so far as they would extend, for the money taken, and the company afterwards successfully prosecuted him for the embezzlement to con- viction : it was held, that the money taken was a debt due from the felon to the company, and a good consideration (rt) See sect. 4. {b) Glaridfje v. Eoare, U Vcs. 59. 232 CRIMINAL ACTS OF SERVANTS, ETC. for the securities given by him to the company, and that the company was entitled to realize them {b) . Ciml Remedy. — "Where an injmy amounts to an infiinge- ment of the civil rights of an individual, and at the same time to a felonious wrong, a cause of action arises imme- diately upon the commission of the offence, but it was said could not be enforced till the injured party had fulfilled his public duty and brought the felon to justice, that is to say, if he were able to do so (c) . This rule, however, seems to be much doubted, and in a recent case it has been held that an action for a felony, if otherwise maintainable, would be maintainable wdthout showing that the felon had been prosecuted {d) . [h) Choxcne v. Baylis, 31 L. J., Chanc. 757; 31 Beav. 351. (f) See cases diacussed in Wells v. Abrahams, L. E., 7 Q. B. 557. {d) Midland Ins. Co. v. Smith, 6 Q. B. D. 561. See also Ex parte BalL He Shejjherd, 10 Ch. D. G73. ( 233 ) CHAPTER XXV. BANKERS GIVING SURETIES AS TREASURERS. We will in tMs chapter advert to the cases in which bankers may be required to find sureties upon their appointment as treasurers to public bodies. A., B. & Co., entered into a joint and several bond, for the faithful performance by A., of his duties as treasm-er of a poor law union, in receiving, &c. moneys, &c. A. and another person were bankers, and A. had, in fact, never been in the exclusive receipt of the moneys of the union, which were paid into the bank, the overseers of the parishes constituting the union having been directed by the board of guardians, in their x^^i^^^^ contribution warrants, " to pay to Messrs. Brodie & Co.," and the cheques drawn by the board requiring A. and his partner to pay, &c. The Court held it to be an established principle, that for moneys paid to two or more parties the surety for one is not liable; and therefore, that if a person is surety for another, for the due accoimting for moneys received by him, the receipt of moneys by that person and his partner is not the same as the receipt by him alone, because the surety may be willing to be accountable for one individual, but not for bim and his partner, and a payment to one partner is a payment to both. Here the board drew cheques on the banking firm, treating them as their joint treasurers, and from that it was inferred that they agreed to the moneys being paid into the bank, to their credit, just as any other customer. Hence, when the bank failed, with a balance due to the imion in its hands, the sureties were held not to be liable, and a sum equal to the above 234 BANKERS GIVING SURETIES. balance, having "been paid to the board of guardians by one of them under a mistake of facts, was held to be recover- able {a) . If the guarantie had been for the good behaviour of the partners, and that they and the survivor and survivors of them should account for, &c. all moneys paid to them, or either of them, or any person thereafter in partnership with them, &c,, the retirement of one of the partners would not have released the surety (b). "Where the guardians of a poor law union took a bond with sureties for the honest and faithful performance of his duties by a banker appointed the treasurer of the union, one of which duties was, according to the regulations of the poor law board, to pay out of any moneys of the guardians in his hands all orders drawn by them on him; and the guardians took the amount of several orders partly in money, partly in bank notes of the banker himself, and partly in a draft upon the banker's correspondents in ' London, and then the bank stopped payment, the guar- dians having the notes in their hands, either having never parted with them or holding them on their being returned after the stoppage by persons to whom they had been paid away, the Court held, that the sureties were not liable : for the guardians had conclusively elected to treat the orders as paid, and the notes were taken at their peril ; and the di-afts had been given merely for their convenience (c). A person became surety to the guardians of a poor law union by a bond, conditioned that the treasurer of their union should discharge the duties of his office " by re- ceiving all moneys tendered to be paid to the board of guardians, by paying out of the moneys in his hands of the guardians all orders di'awn on him on their behalf," and by paying over to the guardians all balances, moneys, {a) Mills V. AkJcrbunj Uinoii, 3 Exch. 500. {/>) University of Cambridge v. JSaldwin, 5 M. Sc W. 580. {c) Lichfield Union v. Greene, 26 L. J., Exch. 140; 1 H. & N. 88i. lu such case tlio guardianH are left to prove against the estate of the bank- rupt banker on the notes and draft. S. C. BANKERS GIVING SURETIES. 235 &c. duo to the union, &c. The treasurer, who was a corn factor, had extensive dealings in corn, and open accounts in trade with the overseers of several of the townships who were farmers. No money was received from these town- ships, but it was the practice of the treasurer to debit the overseers in his trade account with the amount of the poor rate ordered by the guardians to be paid, and then to debit himself with the amount as paid to him as treasurer. His accounts were audited half-yearly, and the credits in corn were allowed by the auditors as payments in money. At the last audit, the auditors found that the sum of 239/. Is. lOd. was due to the guardians, and the Exchequer Chamber held that the surety was liable, inasmuch as between the treasurer and the overseers money had in effect passed (d). As regards evidence of the liability of the guarantor in these cases, we may point out — 1. That an account, delivered by a clerk, cashier, &c., charging himself, is evidence against his surety. 2, That, in case such account is made out by the clerk, and he continues to receive paj^ments on account of the banker, and subsequently pays in moneys or takes credit for salary or disbursements, those payments are not neces- sarily to be first applied to extinguish the previous balance, when the subsequent receipts are equal in amount to the payments (e). [d] Fattison v. Bedford Union, 1 H. & N. 523. \e) Zi/sa,jht v. JFaUcr, 5 Biigh, N. S. 1. ( 236 ) CHAPTER XXVI. APPROPRIATION OF PAYMENTS. Where a customer has a running account with a bank, the balance of which is sometimes for him and at other times against him, the question often arises, how are the payments by the bankers to be applied ? Thus, in the case of a banking partnership, where one partner dies, and the customer goes on dealing with the bank as before, there being no new account nor any settle- ment made, and then the banking-house becomes bankrupt, the account at the death of the partner being about 1,700/. in the customer's favour, but being afterwards and before the bankruptcy reduced by payments made by the bankers, on his account, to about 450/. in his favour; but agaia showing a balance for him exceeding the former amount of 1,700/., at the time of the bankruptcy; — are the pay- ments made, subsequently to the partner's death, by the survivors to be applied in reduction of the balance due to the customer at that period, so as to discharge the estate of the deceased partner pro tanto^ or are they to be consi- dered as exclusively parts of the dealings between the survivors and the customer ? Now this question has been settled, once for all, by Sir William Grant, Master of the Rolls, in a decision which has been universally followed and acted upon ; and in the case of a banking account where all the sums paid in form one blended fund, the parts of which have no longer any distinct existence, the rule may be stated to be as follows : — presumably, it is the sum first paid in that is first paid out, and it is the first item on the debit side of the account that is discharged or reduced by the first item on the credit side. ArPROPRTATION OF PAYMENTS. 237 Indeed, tHs is the principle on which all accounts cur- rent, and especially cash accounts, are settled; and any other mode (as the Master of the Rolls shows) would lead to extravagantly unreasonable results (a). If the customer intended that this usual mode of dealing should he altered or departed from in any way, it is in- cumbent on him to signify his intention to that effect to the bankers, for the rule in Claijton^s case is not applicable when it can be gathered, either from the course of dealings between the parties or from the debtor when making the payment, that such rule is not intended to be applicable {a) . There is no difference between the Courts of Law and the Courts of Equity on this question of appropriation: both adopt the same i)rinciple as the ground of their de- cisions {])) . The same rule applies, moreover, as against a surety : for even in that case, the earlier items of the ac- count will be those to which the earlier payments are to be regarded as appropriated {c) . So, in the case of a trustee paying trust money into his banker's account, thereby mixing this money with his own, subsequent sums drawn out by him will be attributed to the earliest items on the credit side of his account for the time being, and the trust money will, in this v.'ay, in its turn be considered as drawn out, whether or not the result be that a balance remains of his own monies (r/). The same principle being applicable to dealings between a company and its bankers, it follows that a former shareholder, who has transferred his shares, is (a) Clayto)i's case, 1 ller. 608—610, 611 ; Citt/ Discount Co. v. M'Lcan, L. R., 9 C. P. 692 ; 43 L. J., C. P. 344 ; 30 L. T. 883 ; Ex parte Smith, 25 "W. R. 760. The customer has a right to resort for paj-ment of what is due to him out of the estate of a deceased partner to that estate, -nith- out reo-ard to the state of the account, as between the deceased and the surviAing partners. Bevayncs v. Xobic, 2 Russ. & M. 495. (b) Bodenhani v. Purchas, 2 B. & A. 45. See Simson v. Ingham, 2 B. & C. 72 ; Williams v. Griffith, 5 M. & "W. 300 ; Laiiig v. Campbell, 36 Beav. 3 ; Hooper v. Eeay, 1 Q. B. D. 178 ; 34 L. T. 574 ; Ex parte Smith, In re Hamilton, 25 W. R. 760. (c) IViUiams v. liawUnson, 3 Bing. 71 ; see also Kinnaird v. Webster, 10 Ch. D. 139 ; 48 L. J., Ch. 348. (rfl Brcu-n v. Adams, 39 L. J., Ch. 67; L. E., 4 Ch. App. 764; Fennell V. iJefTcU, 4 De G., M. & G. 372. 238 APPROPRIATION OF PAYMENTS. exonerated from contributing to the company's debt to its bankers, if before the winding-up sufficient money has been paid to the bank to cancel what was due to the bank when such shareholder ceased to be a member (e). Distinct ac- Distinct Accounts. — It is necessary, however, to keep coun s. -^ mind that where there are distinct accounts kept, and the customer is overdrawn and makes a general payment, without specifically appropriating it at the time, and there is no course of dealing, or other circumstances, showing clearly how he must have intended to appropriate the pay- ment (/), this is not a case within the rule we have been stating, which applies only in case of a running unbroken account, but one in which the banker may apply the pay- ment to which accoimt he pleases ( g) ; and he is not bound to do it instantly, but may take a reasonable time (A) . On the other hand, if the customer is indebted to the banker on several accounts and pays in money, he, the customer, has a right to say at the time to which debt the payment shall be applied [h). A municipal corporation kept an account at a banking house. Afterwards, becoming invested with the functions of a local board of health, the corporation opened a second and separate account with the bankers. The bankers stopped payment, there being then due from the corpora- tion, on account of its municipal affairs, a large sum of money, and a similar amount from the bank to the cor- poration, in respect of the local board of health account : it was held, that the corporation was entitled to set off these claims one against the other, for although the ac- counts were separate, the corporation was a debtor in the ((') Devonport and South Devon Steam Flour iEUl Co., In re Batcman''s case, 42 L. J., Ch. 577. (/) See Wilson v. Hirst, 4 B. & Ad. 7G6 ; Stoveld v. Bade, 4 Biiig. 1.54; Lysaght v. Walker, 5 Bligh, N. S. 1 : Broun v. Anderson, 2 Moore, P. C. 245. {g) Simson v. Ingham, 2 B. & C. 72, 75. Entiy in the customer's books is not evidence of the approi)riatiou by him. Manning v. Westerne, 2 Vem. C06. (/,) Ibid. APrROPRIATION OP PAYMENTS. 239 first account and a creditor in the second and in the same right (/). When a customer has opened with his bankers separate accounts specially headed with the names of the trusts to which the moneys paid into those accounts belong, the bankers are not at liberty upon the bankruptcy of the cus- tomer to apply those moneys in payment of the balance due to them upon the customer's overdrawn private ac- count (k) . Thus, a county treasurer used to pay the county moneys into Bacon's Bank, but kept his private account at the National and Provincial Bank, and carried over the police rates to this account by cheques drawn on Bacon's Bank : in 1869 he opened a separate account with the National and Provincial Bank, headed " Police Ac- count," and some of the items to his credit in this account could be traced as having come from county funds, but most of them could not : the cheques which he drew upon it were all headed " Police Account," and drawn only for county purposes : for the purposes of interest the National and Provincial Bank treated the accounts as one account, the interest on the balance in his favour being carried to the credit of his private account : at the time when the police account was opened, the manager of the bank knew that he was county treasurer and understood that he had been in the habit of paying county moneys into the bank : in April, 1870, he absconded, his private account being overdrawn, and the police account being in credit : — the court held, that the bank was not entitled to set oS. the one account against the other, but that the county magistrates were entitled to recover the balance standing to his credit on the police account (/). When a partnership has been dissolved and one or more of the partners continue the business, and a creditor of the (i) redder v. Preston {Mat/or, ^-c), 9 Jui-., N". S. 49G; 11 C. B., N, S. 535; 31 L. J., C. P. 291. (A-) Si- parte Kingdon, In re Gross, L. R., 6 Cli. 632 ; 40 L. J., Ch. 91. (/) Jbid. 240 APrROPRIATION OF PAYMENTS. firm continues the credit, and blends together his accounts with the old firm and the new, payments made by the new firm on account must be aj)plied in the first instance to the satisfaction of the old firm (m) . This rule holds good not only with respect to payment actually entered in the blended account but also with re- spect to any sum of money paid without specific appropria- tion after the blended account has been sent in. The plaintiffs supplied goods to K. & D., who were in partnership, and they gave the plaintiffs their acceptance for 132/., the amount. Before the bill was due K. & B. dissolved partnership, and gave notice to the plaintiffs with the intimation that K. would carry on the business, and would receive and pay the accounts due to and from the old firm. The plaintiffs continued to supply Iv. with goods, and he gave them his acceptance for the amount, and also paid them several sums on account, but without any specific appropriation. After some months the plaintiffs sent in their account to K., beginning on the debit side with the ac- ceptance for 132/., and, after giving him credit for the sums paid, showing a balance against K. of 92/. After this K. paid the plaintiffs two other sums, which, with the sums already paid, amounted to more than 132/. The plaintiffs having sued K. and D. on their acceptance for 132/., D. pleaded payment : — Held, that, the plaintiffs having sent in the statement to K. treating the whole as one account, the subsequent payments must be appropriated to the earlier items of the account ; and consequently that the plea was proved [m) . The same principle applies when the partnership expires : thus, Brooke, a lieutenant-colonel in the army, employed one Gilpin, as army agent and banker, to receive his pay and allowances, and also dividends on his stock, and other moneys on his account, and from time to time to make payments to him, or his order, for which purpose he was («/) Hoopei- V. Keaij, 1 Q. B. D. 178 ; 01 L. T. 574 ; 2-1 W. R. 485. APPROPRIATION OF PAYMENTS. 241 in the liabit of drawing on Gilpin, wlio, from time to time, sent in his account to the employer. Brooke continued to employ Grilpin in this way from some time before the year 1807 down to the year 1819, when Gilpin became bankrupt ; no rest was made or balance struck in the account after the 1st of July, 1816, and during the whole period of the account there was always a con- siderable balance due to Brooke. On the 24th of Sep- tember, 1807, Gilpin had entered into partnership, for a licriod of ten years, with one Enderby, but the business continued to be transacted in the namQ of Gilpin alone, and Brooke had no notice or knowledge of the partnership until after the bankruptcy of Gilpin ; and the receipts and payments prior and subsequent to the 24th of Sep- tember, 1817, when the partnership expired, formed part of one general account. Then, on Brooke bringing an action against Enderby and Gilpin, to recover the balance due to him at the expiration of the partnership, the Court held that Enderby (Gilpin having pleaded his bankruptcy) was entitled to consider any sums paid by Gilpin after the expiration of the partnership, as being paid in reduction of the balance then due to Brooke, and might take credit for them, without giving credit to Brooke for any sums re- ceived after the expiration of the partnership by Gilpin on account of Brooke {n). The acting member of a partnership has an implied au- thority to assent to the transfer of their account from one bank to another, without an express assent of the other partners. Upon such transfer, however, the actual amount due is alone transferred. Where the balance due from the firm at the time of the transfer has been overtopped by subsequent payments to their credit, as to which there has been nothing to take the case out of the ordinary principle of appropriation of payments to the earlier items, the banker has no right of action in respect of the balance («) Brooke V. Emlcrhu, 2 B. & B. 70. G. R 242 APPROPRIATION OF PAYMENTS. existing at tlie time of transfer, whidi lias tlius become extinguished, but only in respect of the balance subse- quently become due (o). Legal items. Legal Items. — If there is a running account between the customer and the bankers, and the bankers make large advances to him, part of these advances arising out of illegal and part out of legal transactions, and the customer from time to time deposits bills and makes payments, without any specific appropriation or any settlement of the account : it will be held, that the payments must be applied to the reduction of the earlier items of the ac- count, and to the legal, and not the illegal, part of the demand (j;). So bankers may apply subsequent unap- ■ propriated payments to debts barred by the Statute of Limitations {q). Specific ap- Specific Appropriafioii. — When money is paid in on a propriation of gp^Q^^Q account by the customer, and accepted by the banker, the money cannot be appropriated to any other account or debt (r) . Therefore, where a customer paid a sum of money to a country banker, with instructions to remit 500/., part of the sum, to a London banker, to meet the acceptances of the customer, and the banker on the same day sent several bills to a bill broker, and directed the London banker to meet the acceptances, and on the next day the country banker stopped payment; it was heldj that the sum of 500/. was specifically appropriated, and that the customer was entitled to recover it back in full (r). (o) Beal V. CadcUch, 2 H. & N. 32(5 ; 2G L. J., Exch. 356. {p) Ex parte Randlcson, 2 Dcac. & C. 53i ; JFric/ht v. Laing, 3 B. & 0. 165. [q) Williams v. GriffUh, 5 M. & W. 300 ; A^ihhj v. James, 11 M. & W. 542. (r) Farley v. Turner, 26 L. J., Chanc. 710. See also Hill v. Smith, 12 M. <& W. G18; Barned^s Banking Co., In re, Ex parte Masseg, 39 L. J., Ch. 035 ; 22 L. T. 853 ; Johnson v. Itobarts, L. R., 10 Ch. 585 ; 44 L. J., Ch. 678. Sec ante, p. 138. APPROrRIATION OF PAYMENTS. 213 But when a person pays money into a tank to bo applied in a specific manner, and the hanker stops pay- ment before taking any step towards applying it to the purpose, the payer cannot recover the money paid, but has merely a right of proof as a general creditor on tho banker's estate (s). A solicitor in the country received from a client a large sum of money, which was to be paid by him into the Comi of Chancery on the client's account. The solicitor obtained a bill for the sum from a country banker, and remitted it to his bankers in London, without stating the reason for which the amount had been paid to him. At the same time he was indebted to his bankers in 450/., for which they held securities, and as to which they kept an accoimt separately from his general account. The soli- citor died, and a few days afterwards the bill became due and was paid, and the bankers carried the amount to his general account. The bankers, for some time after they had received notice from the client of the circumstances under which the amount of the bill had been paid to the solicitor, continued to keep the accounts separately, but ultimately deducted the 450/. from the proceeds of the bill, and paid the balance to his executrix. The Yice- Chancellor held, that as there was no agreement binding the bankers to keep separate accounts as to the 450/. and the amount of the bill, and as they had no notice till after the amount was received of the purpose for v/hich it was intended to be applied, the client was not entitled to re- cover from them any part of the proceeds of the bill (;'). (.s) In re BarnecVs Banking Comj/amj, Masse)/ s case, 39 L. J., Chanc. 635. (0 Grigg v. Cockcij, 1 Sim. 439. 2 R ( 244 ) CHAPTEE XXYII. LIEN. The general lion of bankers is part of the law mercliant, to be judicially noticed like other parts of that law {a). Unless there he an express contract, or circumstances showing an implied contract inconsistent with the principle of lien, bankers have a general lien on all securities de- posited with them, as hanhcrs, by their customers {h). Securities for Special Purposes. — A banker's lien does not attach on securities placed in his hands for a special purpose, e. g., where exchequer bills are deposited, in order that he may receive the interest on them and get them exchanged for fresh bills ; for such special purpose is in- consistent with the notion of a general lien. It is on this ground, that if a customer goes to his banker requesting him to get a bank post 'bill for the purpose of transmitting into the country the sum of 1,000/., which sum he hands over to him in bank notes, the banker, unless he expressly states that he receives the notes only subject to his lien, has no right to retain or apply them to any other purpose than that for which he received them {c). Where a customer deposited with his bankers a deed of conveyance, comprising two distinct j)roperties, giving to («) BranclaoY. Harnett, infra; lioclc v. Gorrisscii, 30 L. J., Chaiic. 39; 2 De G., F. & J. 434; Jones v. rcppcrcorne, Johns. 430 ; 28 L. J., Chanc. 153. {b) Brandaow. Barnett, 12 C. & F. 787; London Chartered Bank of Aus- tralia V. White, I^. R., 4 Apj^. Ca. 413 ; 3Iisa v. Carrie, 1 App. Ca. 544 ; 45 L. J., Ex. 414 ; Lcesc v. ^fartin, L. R., 17 Eq. 23G ; 43 L. J., Chauc. 193 ; Kinnaird v. IVebster, L. 11., 10 Ch. D. 139 ; 48 L. J., Chanc. 348 ; Ex parte Manchester and Count tj Bank, L. E,., 3 Ch. D. 481 ; 45 L. J., Bank. 149 ; Bx parte Adam, L. E., 2 Ch. A^^p. G3 ; In re Williams, 3 Ir. Eop., Eq. 346. (e) Brandao v. Barnett, supra. For "liens" (so-called) arising by speoial agreement or equitable mortgages by dci^osit, sec further, post. SECURITIES FOR SPECIAL PURPOSES. 245 them at the same time a memorandum pledging one of the properties as a security for a specific sum advanced, and also for his general balance, it was decided that, as the deposit of the deed of conveyance was for a special piu'- pose of giving a security upon one property only, tho bankers could not claim a general lien, by virtue of the custom of bankers, on the other property (d). If a customer deposits securities with his bankers, to indemnify them to the extent of 1,000/., then advanced by them, and afterwards becomes indebted to them in an additional sum of 500/., on his running account, it would seem that they have no lien on these securities beyond the 1,000/. and interest {e). A customer kept three accounts with his banker, called the general account, the loan account, and the discoimt account. The loan account was from time to time fed by the deposit of securities, which were ordinarily expressly deposited to secure the general balance. The customer wrote a letter to the banker, advising him that he had charged his account with 10,500/., and stating that as by this time his credit with the banker would no longer afford a margin to that extent, he hastened to hand him by way of collateral security certain bills of exchange, which he specified; the Court held, that this did not exclude the banker's right to a general lien on the bills in respect of the balance due on the general account ; for, as between banker and customer, whatever number of accounts are kept in the books, the whole is really but one account, and it is not open to the customer, in the absence of some special contract, to say that secmities which he deposits are only applicable to one accoimt (./'). So even, if there are several accounts kept at several branches, such accounts can be treated as one, and if on the general balance the (d) Wylde v. Radford, 33 L. J., Chanc. 51. \e) Vandcrzee v. Willis, 3 Bro. C. C. 21 ; Zinck v. Wdher, 2 W. Bl. 1154 ; see Ashton v. Dalton, 2 Collyer, 565. See p. 183. (/) In re European Sank, L. E., 8 Ch. 41 ; 27 L. T., N. S. 732. 246 LIEN. customer is sliown to be indebted tbereon, the banker's lien will apply (/), Plate. — Bankers have no lien for the balance of their account against a customer, on his plate deposited in his chest with them for safe custody {g). Trust or Property of Third Persons. — Nor can bankers carry into effect any lien which they may prima facie have upon securities deposited with them, which are, in fact, trust deeds. Thus, if a customer deposits title deeds, as a security for advances, and the property comprised in the deeds is subject to a trust, in breach of tvhich the deposit is made, then, although the bankers have no notice of the trust, it must prevail against their lien (h), unless there is negligence of such a character, on the part of the cestui que trust, as to deprive him of his right to the trust fund (i). One of the trustees of a fund held certain shares in a banking company, in his own right, and dealt with and purchased shares therein to a considerable extent. A portion of the trust fund v/as invested in shares in his name. There was no distinguishing mark by which the individual shares could be traced, the whole being in the nature of capital, expressed by terms of quantity. The trustee then agreed to assign a certain number of the shares standing in his name to the banking company, as security for repayment of advances which had been made to him by them; but no formal transfer was ever made. He then became bankrupt, not having in his ownership at the time a sufficient number of shares to satisfy the trust and (/) Garnctt v. IfcKcwan, L. R., 8 Ex. 10, See also Prince v. Oriental Banking Company, 3 App. Cas. 325. {g) Sec Kc parte Eyre, 1 Ph. 235; 12 C. & F. G94, 797; ;;n- Lord Campbell, Brandao v. Harnett, 12 C. & F. 809; and O'Connor v. Major i' banks, 4 M. & a. 435 ; Zecsc v. Martin, L. R., 17 Eq. 224. (h) Ifanningford v. Tolcman, 1 Collyer, G70. (;■) S/ark/iOKse v. T/w Countess of Jersey, 30 L. J., Chanc. 421. Sec as to what notice -will afiect lieu, IJcrry v. Gibbons, L. R., 8 Cli. 747 ; Maxfield V. Burton, L. R., 17 l-'q. 15 ; Cavandcrv. Bullcel, L. R., 9 Cli. 79 ; Farhall V, Farhall, L. R., 7 Eq. 28G ; sco also ]>. 174. TRUST OR PROPERTY OF THIRD PERSONS. 247 also to enable him to execute the agreed assignment to the banking company. Here the banking company was held to have no lien on any of the shares which A. had held in trust ; for though the shares so held, being originally purcliased with trust money, possibly might have been dealt with by sale and repurchase, the trustee must still be considered as holding for the purposes of the trust the same number of shares,. out of a larger number which stood in his name at the time of the bankruptcy : and of the tv/o equities, that of the ccstuis que trust, and that of the banking company — no actual assignment of the shares having been made, pur- suant to the agreement — the former must prevail {j). Bankers have no lien upon railway stock deposited or pledged with them by a customer, after they receive notice that the stock is the property of another person [k) . The trustees of a trust fund had an account with a banking company, as such trustees. One of the ccstuis que trust had a private account with them, which was much overdrawn ; upon their agreeing not to press for the reduction of the balance against him, he offered to give them a lien on the moneys coming to him in respect of his share of the trust fund: and to this they agreed. Accordingly, he addressed a letter to one of the trustees, authorizing and requesting him to pay to the credit of his (the cestui que trtisfs) account with the bank such sums as might be awarded to him out of the trust fund. It was held that this letter gave the bankers a valid lien upon the proceeds of the fund, and, being intended by both parties, at the time it was given and received, to be irrevocable, must be considered in equity to be so to all intents and purposes (/) . (i) mtrray v. FmJcett, 12 C. & F. 764, (k) lockcY. Frescoff, 32 Beav. 2C1. (l) Fx parte Steward, 3 M., D. & De G. 265. Sec Paiuicll v. TIarki/, 2 CoUyer, 241 ; Somerset v. Cox, 10 Jur., N. S. 351. 248 LIEN. Bills of Exchange, 8^c. — If a customer lodges undue bills of excliange in the hands of his hanker and draws upon them for any money he wants in advance, the hanker charging no interest on these advances, but selecting out of the bills such as were nearest in amount to the sum advanced, and discounting them, and debiting the cus- tomer with the amount of such discount in his account, but without any special agreement to that effect, then there is nothing, in these circumstances, to invalidate the banker's right of lien for his balance, on all other bills placed in his hands by the customer besides those that he discounts {m). It seems to be universally true, that a customer cannot get back paper securities in 'his banker's hands, without paying the balance against him, unless there is some special contract between the banker and the customer inconsistent with the general lien {n). S. discounted with a bank bills of exchange drawn against goods consigned to India, handing over the bills of lading as security. The bank carried a part of the discount value of the bills to a suspense account till advice of the payment of the bills, to form a margin or an addi- tional security against a fall in the price of the goods, and gave accountable receipts for such margins. S. deposited these receipts with A,, who gave notice to the bank. The bills having been dishonoured, the bank was held entitled to a lien on the marginal receipts for such sums as were actually due and payable to the bank by S. at the times when the marginal receipts respectively became payable, in respect of liabilities contracted before notice of the deposit was received, but not to a lien for sums not actually due (o). (w) Davis V. Bowshcr, 5 T, E.. 488. See as to lien on undue bills, ante, p. 146. («) Per Lord Campbell, in Branclao v. Bariictt, 12 C. & F. 787; and Wood, V.-C, in Jones v. I'epjKrcornc, 5 Jur., N. S. 140 ; 28 L. J., Chanc. 153. {") Jcjfrues V. The Afjra and Masterman''s Banl;, 3.j L. J., Chanc. G8G. PARTNERSHIPS. 249 A banker, who has discoimted bills for a customer, has no implied lien on that customer's cash balance duiiug the currency of the bills (7;). The rule is so strong as regards the lien on securities, ■which come into the banker's hands icitJiout being appro- pnated to any special pioposc, or entrusted to them for safe custody or the like, that it attaches on bills and notes payable to beaver, or other negotiable instruments which pass by delivery, although the customer depositing them was not the real owner, and had no authority to saddle the property in them with a lien, provided the bankers, at the time of the deposit, have no notice of any equitable trust or title attaching to these securities {q). Securities left by Mistahe. — Nor has a banker any lien on securities left by mistake or casually at the bank, upon the occasion of an application to him to advance money on them, which he had refused to do (r) . Partners/lips. — Bankers have no lien on the deposit of a partner, on his separate account, for a balance due to the bank from the firm («). A firm had an account with a bank and one of the firm had a separate account with the same bank. Upon the bank discounting a promissory note of such partner, he deposited with the bank certain shares as a security for the same, or for any sums of money in which he might then be or might thereafter become indebted to them. The shares afterwards became the property of the firm, which became bankrupt largely in- debted to the bank; the bank was held not entitled to hold the shares as a security for the joint debt, but for the separate debt only of the partner depositing the shares (/). At the commencement of the bankruptcy of the firm of (p) Botves V. Foreign and Colonial Gas Company, 22 "W. R. 740. [q) Barnett v. Brandao, 6 ]M. & Gr. 630. See also Misa v. Cnrrie, 1 App. Cas. 544; 45 L. J., Ex. 414; linmball v. Metropolitan Bank, L. E... 2 Q. B. D. 194 ; 46 L. J., Q. B. 346. (»•) Lucas V. Borrcin, 7 Taimt. 279. (4) Watts V. Christie, 11 Beav. 546. (t) Ex parte M'Kenna, 30 L. J., Bank. 20. See also Ex parte Manchester and County Bank, L. R., 3 Cli. D. 481. 250 LIEN. A. and W. there were standing registered in the name of A. shares in a bank, whose articles of association provided that all the shares of every shareholder should be subject to a lien in favour of the bank for any debt due to the bank for him alone, or jointly with any other person. The shares in question, which were originally the private property of A., became partnership assets when he entered into partnership with W., but the bank had no notice that anyone but A. was interested in the shares. The bank sought to prove against the joint estate of the firm for a large debt contracted after the shares became partnership assets : — Held, that the lien of the bank on the shares was a secmity on the joint estate, and that the bank could prove for the amount of their debt without deducting the value of their shares. Realizing Lien. — Little has been decided to illustrate how the law provides that the banker is to realize, and make productive, his lien on securities. In case of any negotiable secmity which comes to his hands on account of a customer, to whom the banker is in advance, he has, as has been said, a lien or power of de- tention ; and in order to make such power productive, he may put the negotiable instrument in suit (?/), and recover upon it so much as will cover the balance due to him from the customer (.r). With respect to other securities it is submitted that, in the case of a mere lien (as distinguished from an equitable mortgage), a banker has no right of sale (y). But, instead of advancing their remedy, bankers will destroy their right of lien, if after a lien has been established they take a security, which is payable at a didant day, for the debt (s). (}i) BoUandv. Bygrave, R. & M. 271 ; Bosanqnet v. Budman, 1 Stark. 1. \x) Scott T. Franklin, IT) East, '128. The lien is ouly, at most, co- extensive with the balance duo ; per Eyre, C. J., Bolton v. Bidler, 1 B. & P. 546. (y) See Donald v. SucJclin//, L. E.., 1 Q. B. 5S.5. (;) CowcU \. Simpson, 16 Vcs. 278; Jfcwison v. Guthrie, 3 Scott, 311; 2 Bing. N. C. 755. ( 251 ) CHAPTER XXVIII. PARTNERSHIPS AT COMMON LAW. Many questions arise in banking transactions "wliicli are governed by the rules applicable to partnerships at com- mon law. For this purpose it will be well to consider shortly what is the law relating to such partnerships. Cases respecting copartnerships in banking, under the 7 Geo. IV. c. 46, as they stand upon different and special grounds, will be treated apart ; and the same will be done with respect to joint-stock banking companies and char- tered and limited banking companies. LiahUity of Firm for Parfjwr^s Contracts. — Every part- ner, acting on behalf of the firm, can bind his co-partners by contracts entered into by him, though without the authority of such co-partners, provided the contract comes within the scope of the ordinary business of the firm, and that notice of such want of authority was not brought to the knowledge of the party with whom the contract was made. When the contract is one which the partner is authorized to make by the others, it need hardly be said they will be bound thereby. An acting partner has implied authority to assent to the transfer of their account from one banker to another, without the express assent of the rest of the firm, but it is doubtful whether the acting partner has such authority to borrow a sum from the transferee of the account, in order to pay off the bank from which the transfer was made, or those who constituted it {a). But one partner has no authority, in the absence of evidence of custom, to bind («) Bcal V. Caddick, 26 L. J., Exch. 35C. PARTNERSHIPS AT COMMON LAW. his co-partner by opening a banking account in his own separate name, instead of the name of the partnership, although the account may be for partnership purposes, and consequently the bankers will not be entitled to recover against both partners the overdrawn account (c). So, again, supposing the partnership is a trading part- nership, a partner can bind his co-partners by accepting, drawing or indorsing bills of exchange, though he be expressly forbidden by the firm to enter into such con- tracts {d). But where the firm is not a trading one, as in the case of a firm of solicitors, there is no implied authority for one of the partners to bind the others by drawing, accepting or indorsing such instruments (c). A partner has no implied authority to bind his co-part- ners by a submission to arbitration (/), nor, as a ride, by executing a deed (g) , nor by giving a guarantie (A) . Partners cannot effectually pledge partnership property, so as to make it available for their own private debts (/). LiabUiti/ of Co-partners for Partner'' s Wrong. — A firm is liable for injuries or loss resulting from the wrongful act or negligence of one of their number, provided he was acting within the ordinary course of the business of the firm. In the same way, a firm is responsible for the mis- application by a partner of money or property received by him, if in so receiving it he was acting within the ordi- nary apparent authority of his firm ; or, again, if money or property has been actually received in the custody of the firm, they are responsible should one of the partners misapply it. (c) Alliance Bank v. KearsUij, 40 L. J., C. P. 219 ; L. E., G C. P. 433 : 24 L. T. 552. {d) Kirk V. Blurton, 9 M. & W. 284 ; Forbes v. Marshall, 11 Ex. 16G ; and see ante, p. 30. (e) Garland \. Jacomb, L. R., 8 Ex. 216. (/) Adams v. Bankart, 1 Cr., M. & 11. C81 ; Thomas v. Alhcrlon, 10 Ch. D. 185 ; 48 L. J., Clianc. 370. (.--/) Jhrri/ V. Jackson, 4 T. & li. 51G. (h) ])ancan v. Lowndes, 3 Camp. 481. [i) Ex parte Snoivball, la re JJotiylas, L. R., 7 Ch. 534 ; 2G L. T. 894. LIABILITY OF CO-PARTNERS FOR PARTNER'S WRONG. 253 A lady having an account with a hanking house, con- sisting of several partners, was ad\ised by one of them to dispose of certain Dutch bonds of which she was possessed, and to place the proceeds on better security ; the partner also suggesting that the money should be lent to his son. In this plan the lady acquiesced, in consequence of the great confidence she had in the firm, and gave the partner a cheque upon the bank for the money, payable to a third person named, or bearer, and received a promissory note for repayment with a guarantie from the partner, who afterwards absconded. The security subsequently proved worthless. On the lady filing a bill in equity against the remaining partners, it was held that they were not liable for the loss, because the transaction was not within the scope of a banker's business, and was not recommended or sanctioned by the other partners (./). The owner of certain exchequer bills deposited them with a firm of bankers, and subsequently one of the part- ners sold them without the knowledge of their owmer or of the other partners. The proceeds were innocently applied by the bank to its own use : — Held, that the bank was Hable(A-). One of the partners in a bank caused stock, belonging to a customer of the bank, to be sold out, by means of a power of attorney, which he forged. The proceeds of the stock were paid to the account of the banking firm, at the house of the bank's agents, and were appropriated by the partner, who was afterwards found guilty of other forgeries and hanged. His partners were, in fact, ignorant of the fraud, but might have known it by the exertion of common diligence. The customer was held entitled to maintain an action against the partners for the amount (/) . (y) Bisho}) V. Countess of Jersey, 2 Drew. 143 ; 23 L. J., Chanc. 483. (k) Clayfon''s case, 1 Mer. 575. {I) Marsh V. Keating, 2 CI. & F. 250. In tliis case the judgment went more or less on the ground that the partners might have known of the fraud, but, had it been otherwise, they would still have been liable, inasmuch as the selling, through their broker, stock belonging to their PARTNERSHIPS AT COMMON LAW. So, it has been laid down, that if one partner in a bank- ing house colludes with a member of a trading firm in a transaction connected with the business of the bank, the banking firm is liable to the trading firm for any damages which the latter may have suffered by reason of such a transaction. Longman & Co., booksellers, banked with Pole & Co. On a certain day, Hurst, a partner in Long- man's house, sent cash to the bank in order to take up three bills of exchange accepted by him in the name of the firm and coming due next day. The bills were taken up, but by Hurst's order were not entered in the books of Longman & Co. About the same period, it appeared in evidence, Dov/nes, a partner in the bank, told one of the clerks that a bill of Longman's would come in on such a day, which was to be paid and given over to him (Downes), and that he was to debit Hurst with it in the note hoolc, in which private transactions were entered, so that it might hot go into the ledger. Downes soon afterwards gave a similar direction respecting another bill of the same kind ; and these bills were entered into the note book accord- ingly, and the cash payments were entered in the same book to Hurst's credit, and consequently no trace of these transactions appeared, either in the pass book of the bankers or in the cheque book of Longman & Co. Hurst afterwards retired from the partnership, receiving the full amount of his capital, and became bankrupt. Longman & Co. were subsequently obliged to pay bills accepted by him, in the name of the firm, to a very large amoimt. An action was considered to be clearly maintainable by Long- man & Co. against Pole & Co., in respect of the damages arising to the former out of the collusion of one of the latter firm with Hurst (1). customers and receiving and remitting the proceeds was within the scope of the firm's business. See also £lair v. Bromley, 2 Ph. 354 ; St. A/ibi/n v. iSmart, L. R., 3 Ch. G4G ; Tliimcr v. Gregory, L. R., 18 Eq. C21 ; Thomas V. Atherton, 10 Ch. D. 185; 48 L. J., Ch. 370; Eced v. Baihy, 3 App. Cas. 94; 47 L. J., Ch. IGl ; Lacey v. mil, 4 Ch. D, 537; Tliimcr v. Gregory, 31 L. T. 7. (Z) Longman v. Folo, Danson & L. 12G ; M. & M. 223. JOINT AND SEVEHAL LIABILITY OF PARTNER. 255 Defence in Actions by Partners. — So, -where there is a good defence against one partner that defence is equally available against the others; thus, where one of several partners in a hanking house drew a bill in his own name upon a third party, who accepted it, upon condition that the drawer should provide for it when due, the firm was adjudged to be bound by this act of the partner, and they were not allowed to sue the acceptor ; for the partner, not having performed the condition on which the acceptor accepted, could not have done so, and they could not be in a better position than he was [m) . Where a customer gave a promissory note to his bankers on account of a supposed balance due to them (there being, however, a mistake as to this), and the bankers indorsed the note to another firm, consisting of some of the partners of the banking house, he was held at liberty to set off the debt due to him from his bankers, in an action brought against him on the note by the firm who held it, the knowledge of one of the partners in such firm being deemed equivalent to notice to all, and, therefore, that they were affected by the state of the accounts between him and his bankers («). Joint and several LiahiUty of Partners. — A partnership contract, being inform joint, was held in law to create only a joint obligation, which consequently attached exclusively ■ upon the sm'vivors (o). But it is now held in equity, that partnership debts are joint and several {p) ; and in a suit by a creditor of a firm against] the representatives of a deceased partner and the surviving partner, the creditor is entitled to satisfaction out of the assets of the deceased part- ner, whether the surviving partner is or is not insolvent (^j). {m) Brandon r. Scott, 7 E. & B. 234 ; Astkt/ v. Johnson, 5 H. & N. 137 ; JLiehmond v. Heapy, 1 Stark. 202. («) Fuller V. Eoe, Peake, 197. (o) Sleech's case, 1 Mer. 564 ; Story on Partnership, 361 ; Jiichards V. Heather, 1 B. & A. 29. [p) Wilkinson v. Henderson, 1 M. & K. 581 ; Bishop v. Church, 2 Vcs. sen. 371 ; Burn v. Burn, 3 Ves. 573 ; Beresford v. Broivning, 1 Ch. D. 30 ; 45 L. J., Ch. 36 ; Kendall v. Hamilton, 3 C. P. D. 403 ; 4 App. Cas. 504. 256 PARTNERSHIPS AT COMMON LAW. Bcath of Fartner. — So in equity partners are looked upon not as being joint owners of the partnership pro- perty, but as owners or tenants in common ; and, conse- quently, on the death of one of them his share does not survive to the others, but forms part of his personal Goodwill. estate (y). In the same way on the death of one of the partners, there is no survivorship of the goodwill of the business, but it is looked upon merely as an asset ; and, if it is saleable, must be sold (r) . Where a partnership, at the time of the death of one of the partners, is unsaleable, and the surviving partner carries on and improves the business, and subsequently sells it, in administering the estate of the deceased partner the surviving partner is only chargeable in respect of the value of the business at the date of the other partner's death (s). In the case of bankers one year's average net profits has been con- sidered a fair assessment of the goodwill of the business [t) . Partnerships in other Firms. — The rule as to partner- ships in other firms is thus stated by Mr. Justice Lindley, in his work on Partnership, p. 341, " If there are two firms with one name, a person who is member of both firms is liable to be sued on all bills bearing that name, and binding on either firm. But if a member of only one of the two firms is sued on the bills his liability will de- pend first on the authority of the person giving the bill to use the name of the firm of which the defendant is a member ; and, secondly, on whether the name of that firm has in fact been used. If both these questions are answered in the affirmative he will be liable, but not otherwise." Thus, A., B. and C. traded under the firm of A. and C. {q) Barber, Ex parte, L. E., 5 Ch. CS7; Daviesv. Games, 12 Oh. D. 813 ; Ih-oughtnn v. Broxqldon, 44 L. J., Ch. 520; In re Simpson, L. R., 9 Ch. 572; 31' Clean v. Kennard, L. R., 9 Ch. 33G ; 43 L. J., Ch. 323. (r) Bradbury v. Dickens, 27 Beav. 446 ; Wedderbiirn v. Wedderhurn, 22 Bcav. 104. (.?) Brunqhton v. Broughion, supra. Sec further Simpson v. Chapman, 4 Dc G., Mac. & G. 154 ; Smith v. Everitt, 27 Beav. 44G. (0 MvUvrsh V. Kean, 28 Beav. 453. CHANGE OF FIRM AND SUBSTITUTION OF LIABILITY. 257 in the cotton business, and A. and B. traded as partners alone under the same name in the business of grocers, in which latter business they became indebted to D., and gave him their acceptance, which they were unable to take up when due. In order to provide for it, they indorsed to D. in the common firm of A. and B. a bill of exchange, which they had received in the cotton business in which C. v/as interested, but such indorsement was unknown to 0. : — Held, that such indorsement in the firm common to both partnerships of a bill received by A. and B. in the cotton business bound C. (u). Change of Finn and Substitution of Liahility. — In the event of a change of firm, the old firm still remain liable for debts contracted before the change, imless their creditor agrees to discharge the old and to look to the new firm for payment, or at least does some act equivalent to such an agreement (,r). Such an agreement does not require a consideration {y). The mere fact of a creditor's receiving interest from the new firm, for a debt due from the old one, is not neces- sarily an adoption by him of the new firm as his sole debtors. Thus, if the change is occasioned by death, and the creditor of the old firm receives interest for his debt from the new firm, it is quite clear this fact by itself will not discharge the estate of the deceased partner (:;). If the change is occasioned by the retii'ement of a partner, the same holds good {a). {u) Su-aii V. Steele, 7 East, 210. See also Hall v. TTest, cited in Lindley, 343. Bafcery. Charlton, Peake, 111, maynowbe considered no longer law. {x) See remarks by Buller, J., in Tatlock v. Harris, 3 T. E. 180 ; £il- horough v. Holmes, 6 Ch. Div. 255, ante, p. 127. (y) Thompson v. Pcrcival, 5 B. & Ad. 925 ; overruling Lodge v. Bicas, 3 B. & A. 611. See Bank of Scotland v. Christie, 8 C. & F. 214 ; see also Lyth v. Ault, 7 Ex. 669. (c) Daniel v. Cross, 3 Ves. 277 ; Bleiv v. Wyatt, 5 Car. & P. 397; Gough V. JJavies, supra. {a) Gough v. Davies, 4 Price, 200. See also Kincan v. Kiruan, 2 Cr. &: M. 617 ; Crawford v. Cocks, 6 Ex. 287. G. S 268 rAllTNERSHIPS AT COMMON LAW. The mere fact of the creditor's treating the contimiing partners as his debtors does not, of itself, show that he therefore means to surrender his rights against the retiring partners {b). The fact of the creditor's receiving a new security from the continuing partner affords strong evidence of his consent to a substitution of liability {<■). So, if he agrees to look to the new firm, and for a long period makes no demand on the old firm {d). If, upon a cliange of the members, the balances of the customers of the old partnership be transferred from the books of the old firm to those of the new firm, without any special agreement as to the manner in which payments made by the customers were to be applied, but under a general understanding amongst themselves that the new house was to be responsible for the debts due from the old : the new house cannot appropriate payments made by customers, since the change, in their own favour, but will be bound to apply them in liquidation of the balances duo from the old firm (e) . A., a partner in a banking house, and also in business separately as a trader, died, and in a suit by his sej)arate creditors against his executors the bankers claimed to prove the balance due to them from A. ; and they were held to be entitled to do so, although, as the partnership included A. they could not have sued him at law in his separate capacity; and the reason is, because, when an account is decreed the equitable creditors have a right to be satisfied, and no distribution of assets can take place until the accounts of all the creditors of every description have been gone into (./'). Incoming Farincrs. — An incoming partner who has not {b) Heath v. Tercival, 1 P. Wms. 682. (c) Evans v. Druinmo/id, 4 Esp. 89. (d) Hart \. Alexander, 2M.. &W. 481; Bilhorourihv. Holmen, 5 Ch. D. 255. (f) Toulmin v. Copland, 3 Y. & C. G25, thus applyiup: the princii^le of Clayton's case, 1 Mcr. COS — GIO, Gil, to cash accounts between partners tlumsolvea; S.C, 7 C. & F. .'575. (/) I'ai/ntcr v. Homt'm, 8 Mer. 302. INCOMING PARTNERS. agreed with the person suing him to be liable, is not liable for debts contracted by the old firm before his entering into it. Such an agreement may, however, be implied from circumstances. Ashby and Eowland carried on business as partners* having an account with a bank in their own names. They then took one Shaw into partnership, without, however, giving- notice to the bank, or altering the title of their account, and without making any rest in the account. The transactions at the banking house were with Rowland personally. The bankers never had notice that Shaw had been or was a partner until the dissolution of the partner- ship, when notice, signed by Ashby and Shav>^, was sent them, that Rowland having withdrawn from the firm, no transaction to which he was a party could be recognized by them. Before Shaw became partner, Rowland had indorsed a bill of exchange in the partnership name of Ashby and Rowland to the bankers, who discounted it and placed the proceeds to the credit of the account. After Shaw became partner, and before the dissolution, Rowland indorsed two other bills in a similar manner, which were discounted as before. The balance of the account, at tho time of the dissolution, was 60/. 5s. 3d., against the part- nership. The proceeds of all the three bills were intended to bo devoted by Rowland to other than partnership pur- poses, but of this the bankers had no knowledge, and nothiug appeared that could have raised their suspicions of it. The question was, how far Shaw was liable to the bankers on these bills, and it was decided that he was not liable on the bill, which was indorsed and discounted before he came into the firm, but he was liable on tho two other bills ; for it was said that each partner might have limited the authority of his co-partners to bind him, by giving notice to the bankers ; he was also held liable upon so much of the cash balance, as became due, after the day on which he became a partner {(/) . [ff) Vcre V. JsJiii/, 10 B. & C. 288. Sec also Re prrr/e Pcde, 6 Ves. G02. s2 259 PARTNERSHIPS AT COMMON LAW. A firm agreed tliat one of the partners should retire, the assets being transferred to the continuing partners, who should take upon themselves the liabilities, and that the bankers of the finn (whose account was overdi'awn) , should release the retiring partner. The bankers signed a memorandum acceding to this arrangement. They could not afterwards make the retiring partner a bankrupt, on the ground of this debt ; for the partner having, by the agreement to which the bankers were paities, been induced to give up his share in the partnership property, and to denude himself of the means of payment of the debt, it was contrary to equity that they should be allowed to proceed as if they had never caused him so to act; and they were restrained by injunction from so proceed- ing (A). Partnership Account uith Banlicr. — As has been said a partner has no implied authority to open an account in his own name on behalf of the partnership (?) ; but he may, if an acting partner, consent to the partnership account being transferred from one bank to another (A-). Where a partnership keeps an account with a banker, and a new partner comes into the firm, he cannot transfer a part of the assets of the old firm to his separate account, without the authority of the firm, so as to discharge the banker (/) . The fact of one of two partners having opened an ac- count with a bank, in his own name, is not conclusive to show the account to be opened in his own behalf merely. The banker may prove that the customer was acting as agent of the partnership and that the account was a part- nership account. On the other hand, the mere circum- stance of the money deposited being partnership money, (/() Attwoodv. Banks, 2 Beav. 192. (0 Alliance Bank v. Kcardcij, L. 11., 6 0. P. 433, ante, p. 252. (k) Beale v. Caddock, 26 L. J., Exch. 35G. (0 Ex parte Hanson, 18 Vc9. 231. PARTNERSHIP ACCOUNT WITH BANKER. 261 is not sufficient to prove the account to be a partnership account {»i). The fact of one of many co-adventurers in a mining con- cern, who has assumed the management of the adventure, opening an account with a bank in the name of the ad- venturers does not show that he is expressly authorized by them to do so ; and, as there is in general no implied authority, in the case of mining adventui-es by which any one of the party may pledge the credit of the rest for money borrowed, even though for the purposes of the mine, if the account is overdra^vn, the bankers have no remedy for the balance by action against the co-adven- turers {)}) . (w) Coole V. Seelei/, 2 Exch. 7-16. («) Hic/i-ett V. Bennett, 4 C. B. 686. ( 2G2 ) CHAPTER XXIX. SAVINGS BANKS. A savings' bank is defined to bo an institution, in the nature of a bank, formed or established for the pui^poso of receiving deposits of money for the benefit of the persons depositing to accumuLate the produce of so much thereof as shall not be required by the depositors their executors or administrators at compound interest, and to return the whole or any part of such deposit, and the produce thereof, to the depositors their executors or administrators ■ — deducting out of such produce so much as shall be re- quired for the necessary expenses attending the manage- ment of such institution — bu.t deriving no benefit what- ever from any such deposit or the produce thereof (r/). A savings' bank company is not necessarily a banking company {b) . In 1863, the previous acts relating to savings' banks in England and Ireland were repealed, and ncAV provisions were made for their management and establishm.ont, which are consolidated into one act {c) . Since the 28th of July, 1863, savings' banks cannot be formed under the provisions of the now statute, unless thoy have received the previous sanction and approval of the Commissioners for tlie Reduction of tho National Debt, or the Comptroller- G-eneral or Assistant-Comptroller acting (a) 9 Geo. 4, c. 92, s. 2 ; 26 & 27 Vict. c. 87, s. 2. (/>) Coe, Hx parte, 10 W. R. 138 ; 31 L. J., Bank. 8. (r) 2G & 27 Vict. c. 87. This act repe;ils the 9 Geo. 4, c. 92 ; 3 Will. 4, c. 14, ss. 21, 22, 25, 28, 29—35 ; 5 & G AVill. 4, c. 57 ; 7 & 8 Vict. c. 83 ; 11 & 12 Vict. c. 133 ; 17 & IS Vict. c. 50, s. 2 ; 22 & 23 Vict. c. 53 ; aTid 23 & 21 Vict. c. 137. Sec also 40 Vict. cc. 13, 14 ; 37 & 38 Vict. c. 73. The 59 Geo. 3, c. 62, as to Scotland, remains in force until the Scotch Savinf^s' Banks adopt the Act of 18G3. By 2G Vict. c. 25, and 32 & 33 Vict. c. 59, tho National ]3ebt Commissioners may invest the savings of banks under 9 Geo. 4, c. 92, DEPOSITS. 263 under the Commissiouers {d). The rules and regulations for the management of savings' hanks must he entered in hooks kept for the purpose, and open for the inspection of depositors, or the managers and trustees will not he en- titled to avail themselves of the pri\aleges or powers con- ferred hy the enactment {e). Banks established under the provisions either of the repealed statutes, or of the Act of 1883, are to he certified hy the title of '^ Savings' Bank certified under the Act of 1863," and the members of any other hank, association or company, or any other person, using or adopting such title as their designation for carrying on business, will he guilty of a misdemeanor, and on conviction will be punishable accordingly (/). Deposits. — No person can become a depositor for the fii'st time, without disclosing his name, profession, business, occupation, calling and residence {g). Every person at the time of his fh'st deposit must, and afterwards as often as required by the trustees or managers, make and sign a declaration of not being entitled to any deposit in or benefit from any other savings' bank : and this under pain of forfeiting the deposit or benefit, if in the opinion of the barrister (Ji) the deposit was made with a fraudulent intention : such declaration is to be filed and kept by the trustees ; a printed notice of this regulation being affixed in the bank ; and a copy of the declaration, with notice of the penalty, annexed to or printed at the beginning of the deposit book (/). No one can deposit more than 30/. in any one year, ex- clusive of compound interest {j). {(?) 26 & 27 Vict. c. 87, s. 2. {c) Id. s. 3. (/) Id. 3. 6. Iff) Id. s. 36. (A) Sec now 30 & 40 Vict. c. 52, for powers and duties of tho cci-tifying' barrister. (t) 26 & 27 Vict. c. 87, s. 38. (./) Id. 8. 39. Depositors may transfer theii" deposits to any othci.' gaviugs' banks, s. 40, 264 savings' banks. Moreover, deposits cannot be received from any depo- sitor, so as to make the sum to which he shall he entitled exceed 150/. in the whole, exclusive of interest (k). Although a depositor's money may go on increasing, at compound interest, until it reaches 200/. in the whole, yet, thenceforth, no interest will be payable on such deposit, so long as it remains at that amount {Jc). Attempts at evasion of the statute, in this respect, by taking advantage of the clauses enabling persons to deposit money in trust for others have been treated as follows : — A person after depositing in his own name in a savings' bank to the full extent allowed, made further deposits to another account in the name of himself and his sister, but nominally as a trustee for her, in this form : — " Henry Field, in trust for Ann Field," making a declaration ac- cordingly. It appeared, on examination, that the statute, •whilst allowing one person to deposit money in trust for another person, in their joint names, still left him at liberty to withdraw it without any communication with that person. A Court of Equity, considering that the second account had been opened only with a view of evading the statute, and not with the intention of creating a trust in favour of the sister, refused to declare her to be entitled to the sum deposited to the second account (/). By the Married Women's Property Act, 1870, it is enacted, " that notwithstanding any provision to the con- trary in the act of the tenth year of George the Fourth, chapter twenty- four, enabling the Commissioners for the Reduction of the National Debt to grant life annuities and annuities for terms of years, or in the acts relating to savings' banks and post office savings' banks, any deposit hereafter made and any annuity granted by the said Com- (k) 2G & 27 Vict. c. 87, a. 39. Depositors dying haviug 50^., or over that sum, how payable to representatives, ss. 41, 42, 43. See Marsdoi, In re, 1 S. & T. 542. (/) Field V. Lonsdale, 13 Bcav. 78. DEPOSIT BOOK. 265 missioners under any of the said acts in the name of a married woman, or in the name of a woman who may marry after such deposit or grant, shall be deemed to he the separate property of such woman, and the same shall he accounted for and paid to her as if she were an un- married woman ; provided that if any such deposit is made by, or such annuity granted to, a man-ied woman by means of moneys of her husband -i^ithout his consent, the Court may, upon an application under section nine of this act, order such deposit or annuity or any part thereof to be paid to the husband " (m). Deposits may be received from the trustees or treasurers of any friendly society legally em^olled or certified in the manner required by the acts in force relating to friendly societies, without restriction as to amoimt (u), and from the trustees or treasurers of any charitable or provident institution or society, or charitable donation or bequest, for the maintenance, education or benefit of the poor, or of any penny savings' bank ^^-ithiu the United Kingdom, to the amount of 1001. per annum, and of 300/. in the whole, exclusive of interest (o) ; but funds of benefit building societies are not allowed to be invested in savings' banks (|j). Annuities. — ^Depositors in savings' banks are enabled to purchase annuities of not less than one nor more than thirty pounds each {q). Deposit Booh. — By the rules of a savings' bank, entries of deposits were to be made in a book kept by the bank for the purpose, and also in a duplicate account book to be kept by the depositor, which duplicate was to be a voucher for the pai-ty producing it, and a receipt for the bank, when it was handed over to them. A. deposited in the {m) 33 & 34 Vict. c. 93, s. 2. (») 26 & 27 Vict. c. 87, s. 33. (c) Id. s. 32. \p) 6 & 7 WiU. 4, 0. 32, s. 6. {q) 16 & 17 Vict. 0. 45. SAVINGS BANKS. name of B. a sum with tlie bank, and afterwards, wltliout liis authority, got hack the money, and delivered up to the bank the duplicate account book : — It was held that B. nevertheless still continued a depositor, and the bank , was liable for having allowed B.'s money to be drawn out without his licence (r). Provision must be made in the rules of all savings' banks for every depositor, once a year at least, causing his deposit book to be produced at the bank for the purpose of being examined (s). JRemcdics of Depositors. — By the same act it was enacted, that any dispute arising between the trustees and managers and an individual depositor, or his executor, administrator, next of kin or creditor or assignee, or a person claiming to be entitled to any deposit, was to be referred in writing to the barrister appointed under the Savings' Banks Acts, who had power to proceed ex parte on a notice in writing to the trustees or managers being left or sent through the Post Office to the office of the bank ; and whatever award, order or determination he might have made, would have been binding and conclusive on all parties, and final to all intents and purposes, without any appeal (?"). The sub- mission and award are exempt from stamp duty {k). Now, however, the dispute must be referred to the registrar under the Friendly Societies Act, 1875, s. 22 (r). An action is not maintainable by depositors aga-inst the trustees or managers to recover their deposits ; they must have recoui'se to the mode of reference pointed out by the statute (.r) . (r) Hex V. Cheadle Saving.'i' Banl; 1 A. & E. 323. (») 26 & 27 Vict. c. 87, s. 6. (t) Id. s. 48. He may inspect books and administer oaths, Id. s. 19 ; see Lynch v. Fitzgerald, 15 Law Times, 372. («) Id. s. 50. (r) 38 & 39 Vict. c. CO, s. 22, rind see 39 & 40 Vict. c. 52, s. 2, subs. 1. {x) See, under the fonncr acts, Crisp v. Bioihurif, 8 Bing. 394 ; It. v. Witham Sfiriugs^ Bank, 1 A. & E. 320 ; B. v. Mildenhall iSariiigs^ Bank, 6 A. & E. 952 ; R. v. Korivich ^aviugs' Bai/k, 9 A. & E. 729, and seg ptatutes cited in previous note, WEEKLY AXD ANNUAL ACCOUNTS. 267 . Investments. — The trustees must pay Into tho Bank of England or the Bank of Ireland, as the case may require, aU sums to be invested in the names of the Commissioners for the Reduction of the National Debt, that is to say, all the deposits they receive, except such sums as from time to time may necessarily remain in the hands of the trea- surers to answer the exigencies of the savings' bank ; and they are not to invest in any other manner or upon any other security (?/) ; and all moneys so paid into the Bank of England or Ireland must be invested by the commis- sioners from time to time in the purchase of Bank Annuities or Exchequer Bills or parliamentary secmities of whatso- ever kind, created or issued under the authority of any Act or Acts of Parliament for tho interest on v/hich provision is made by Parliament, or any stock or debenture or other securities expressly guaranteed by authority of Parliament, and the interest, as it becomes due thereon, is in like manner to be invested in these Government Annuities, Exchequer Bills or securities {z). Weekly and Annual Aeeounts. — The trustees and mana- gers are to transmit weekly returns to the Commissioners for the Eeduction of the National Debt, showing tho amounts of tho week's transactions and the amount of the cash balances in the hands of the treasurer or other person on account of the bank {a). The trustees and managers are annually to prepare a general statement of the funds of the savings' bank invested in the Bank of England or the Bank of Ireland, showing the balance or principal sum due to all the depositors collectively, the expenses incurred, and stating in whose hands the balance shall be {b). If the trustees neglect to make out and transmit this state- ment to the commissioners, the commissioners may close (y) 2G & 27 Vict. c. 87, s. 15. By 43 & 44 Vict. c. 36, investments are now allowed in Government Stock. [z) 26 & 27 Vict. c. 87, s. 19. («) Id. s. 7. {b) Id. s. 00. As to computation and rate of interest, Zd, ss. 21, 22, 23, 268. savings' banks. the account of the trustees {h). Every depositor is entitled to a printed copy of the annual statement on payment of a penny {c). Office )'s. — Every treasurer, actuary or cashier, being intrusted with the receipt or custody of money subscribed or deposited for the purpose of the bank, or any interest or dividend from time to time accruing therefrom, and every officer receiving any salary or allowance for his services from the funds of the savings' bank, must give security by bond, with one or more sureties, to the Comp- troller-General of the National Debt Office for the time without fee or reward {d), and the bond when executed is to be deposited with the Commissioners for the Eeduction of the National Debt {d). With the view of securing savings' bank depositors against loss by the acts or misconduct of the officers em- ployed, the legislature has given a prior or precedent claim over their estate or goods in the event of their bank- ruptcy or death. The provision is, that if any person appointed to any office in a savings' bank, and being intrusted with the keeping of the accounts, or having in his hands or posses- sion, by virtue of his office or employment, any moneys or effects belonging to the bank, or any deeds or securities relating to the same, dies or becomes bankrupt or insol- vent, or has any execution or attachment or other process issued against his lands, goods, chattels or effects, or makes any assignment for the benefit of his creditors, — then his executors, administrators or assignees, or other persons having legal right, according to the case, or the sheriff or other officer executing such process, must, within forty days after demand, made by two of the trustees, deliver (/>) 26 & 27 Vict. c. 87, s. 55. As to computation and rate of interest, Ibid. ss. 21, 22, 23. (c) lb. 8. 59. {d) lb. a. 8. OFFICERS. 269 and pay over all moneys and other things belonging to the bank to such person as the trustees may appoint, and pay out of his estate, assets or effects, all money remaining due which such officer received by virtue of his office or em- plo;yTnent, before any other of his debts are paid or satis- fied, or before the money directed to be levied by the process is paid over to the pai-ty issuing it, and all his assets, lands, goods, chattels, estates and effects shall be bound to the pa;y'ment and discharge thereof accord- ingly (e). A draper was appointed actuary and cashier of a savings' bank, a rule of which was, that one or more members of the committee should attend at the cashier's shop to receive the deposits ; this rule, however, was not attended to, and the cashier was permitted to receive the deposits. He became bankrupt, and the deposits were held not to be " moneys in his hands by virtue of his office," so as to be claimable in full by the bank. The duty of the office of actuary did not include the receipt of money, which duty, by the rule, was imposed on one or more members of the committee ; nor did the duty of cashier include the receipt of money for the same reason, for the duty of a cashier is to pay money ; consequently the moneys were not in his hands, at the time of his bank- ruptcy, by virtue of his office (/). In the case of the bankruptcy of any person in office in a savings' bank, the savings' bank can only be paid in full his debt to them, when they have conformed in all respects to the statute, and there has been no negligence or laches on the part of the manager or trustees of the institution. Where a person on his appointment as treasurer of a savings' bank entered into the usual bond, but did not actually receive any money, the deposits being paid by the {e) 26 & 27 Vict. c. 87, s. 14. (/) Ex parte Fleet, 4 De G. & S. 52 ; The Lartfml Savingn'' Banlc, see 1 Fonb. Bank. R. 137. 270 savings' banks. managers directly into a bank, of whicli he was a partner, to the credit of the trustees of the savings' bank, who were allowed interest on it, but he signed the monthly return to the National Debt Office, thereby acknowledging the ba- lance to be in his hands as treasurer, on the bankruptcy of the bank, the savings' bank recovered in full (g) . An officer, being robbed of the moneys of the bank before the time for paying them over has arrived, would not be personally liable for the amount (//). If an actuary, cashier, secretary or officer receives any sum or sums of money fi*om or on account of a depositor or on account of the bank, and does not forthmth, or in the case of local receivers within the time specified in the rules, duly accoimt for and pay over the same to the trustees or managers or to such persons as may be directed by the rules, he will on conviction be guilty of a misde- meanor (/). All officers upon demand are bound to account for and deliver up all monej^s, effects, funds or securities, books, papers or property, belonging to the bank in their hands, by order of not less than two trustees and three managers, or at any general meeting of the trustees or managers : on default, the trustees may exhibit a petition to the Quarter Sessions, who may proceed in a smnmary way, and make such order upon hearing all parties concerned, as they may think just, and such order will be final {J). Trustees. — All moneys, goods, chattels and effects what- ever, and all rights or claims, belonging to a savings' bank are vested in the trustees for the time being, without a fresh assignment or conveyance being necessary on the death or removal of any one or more of them (/.) ; and in all criminal or ci^il proceedings shall be stated to be the if/) Ux parte Hidden, 3 M., T>. & De G. SO. (/() Walker v. Guarantee Association, 18 Q. B. 277. (0 26' & 27 Vict. c. 87, s. 9. U) Id. B. 13. (/.) Id. a. 10. TRUSTEES. property of the person or persous appointed trustee or trus- tees for the time being- in his or their proper name mthout further description (/). No trustee or manager is personally liable, except for his o-N\'n acts and deeds : he is not personally liable for anything done by him in \drtue of his office, except in cases where he is guilty of ^^ilful neglect or default {»i). A trustee or a manager of a savings' bank in Ireland, having declared in -^Titing under his hand deposited with the Commissioners for the Eeduction of the National Debt, that he is willing to be answerable for a specific amount only, such amount being in no case less than 100/., will not be liable to make good any deficiency arising in the fimd-s beyond the amount specified (//). This provision is not applicable to managers or trustees of sa^sings' banks in England. Nevertheless, every tmsteee and manager is personally responsible and liable for all moneys actually received by him on account of or for the use of the bank, and not paid over or disposed of according to the rules (m). But a trustee or a manager who is robbed of moneys before the time for paying them over, according to the rules, has elapsed, would not be personally liable to replace or restore the amount (o). A trustee of a savings' bank may be indicted under the 24 & 25 Yict. c. 96, s. 80, as a fraudulent trustee for the misappropriation of moneys deposited with him {]>). For other points of minor importance the reader is re- ferred to the statutes respecting savings' banks (q). Military, Naval and Post Office Banks. — The legislature has provided by special measui'es for the establishment (/) 26 & 27 Vict. c. 87, s. 10. (;«) Id. s. 11. («) Id. s. 12. {o) Walker v. Guarantee Association, IS Q. B. 277. [p] Fuy. V. Fletcher, 31 L. J., M. C. 206. {q) Exemptions from stamp and other duties iu favour of savings' banks, 26 & 27 Vict. c. 87, s. 50 ; 3 •& 4 Will. 4, c. 14, s. 19 ; from in- come tax, 5 & 6 Vict. c. 3o, s. 88. 271 272 savings' banks. of military savings' banks, wliich aro exempted from the operation of the enactments respecting savings' banks in general (r) : of savings' banks for seamen (s), of savings' banks for the Royal Navy and Marines {t), and of Post OfSco savings' banks having the direct secmity of the State for repayment of the deposits («). {>•) 22 & 23 Vict. c. 20. (s) 17 Sc 18 Vict. c. 101, s. 180 ; 19 & 20 Vict. c. 41 ; 25 & 20 Vict. c. 63. (0 29 & 30 Vict. c. 43 ; 32 & 33 Vict. c. 59. {/i) 2i Vict. c. 14 ; 26 Vict. c. 14 ; 29 & 30 Vict. c. 5 ; 82 & 23 Vict. c. 69. ( ^73 ) CHAPTER XXX. THE RELATIONS OF PUBLIC BODIES, COMPANIES, AND OF PERSONS FILLING REPRESENTATIVE CHARACTERS TO BANKERS. Trustees and Commissioners of Public Bodies. — Trustees and commissioners of public bodies, provided they act in accordance mth tbeii- statutory powers, are, as a rule, exempt from personal liability {a). They may, however, make themselves personally liable by pledging their own individual credit, and not that of the funds at their disposal ; or, if they have acted beyond their authority, as, for instance, by borrowing money not in conformity with their borrowing powers, on an implied warranty that they possessed the authority they held themselves out as pos- sessing {!)). Companies. — In dealing with joint stock companies it is material for bankers, before they make advances, to ascer- tain whether the directors^ who represent the company, have power to borrow money ; if they have not, such advances will not, in law, be recoverable from the company as a debt (c). In equity, however, a company may be com- pelled to refund money improperly borrowed by its direc- tors, if such monies have been applied to paying debts previously contracted by the company [d). "Whether the directors of a company can bind the company by borrow- ing money depends upon the nature of its business, and upon its charter, act of parliament, deed of settlement or (a) See 10 & 11 Vict. c. 16, s. CO. (b) See Parrot v. Eyre, 3 M. & Sc. 857 ; 10 Bing. 283 ; Eaton V. Bellj 5 B. & Aid. 41 ; Higgins v. Livingstone, 4 Dowl. 355. (c) Ex parte Chippendale, 4 De G., Mac. & G. 19 ; Bimnester v. Norris, 6 Exch. 796 ; National Permanent Beneft Building Societij, supra. {d) National Permanent Benefit Society, L. R, 5 Ch. 309; Cork and YoughaU JRailway Company, L. R., 4 Ch. 7-lS. 274 RELATIONS OF TUBLIC BODIES, ETC. TO BANKERS. regulation (^). It is important to remember tliat the directors of a company forbidden, or not possessing tbe power, to borrow may nevertheless bind the company by overdrawing its banMng account; and, provided such overdraft is made in the ordinary course of business, the bankers may recover from the company (./'). An overdraft is distinguishable from a loan. Where directors borrow in excess of the limited power of borrowing conferred upon them by the articles of association, the act is ultra vires the articles only, and may nevertheless be ratified by the com- pany, and so become binding upon it. Alifer, if the com- panifs power to borrow is exceeded {g). Liability of Liahility of D?Vw/or.s.— Directors who boiTOW money directors. ^^^^^.^ ^,^y^^ ^^^^^ l^g rendered Kable in damages for breach of an implied warranty that they possessed the authority to borrow they represented themselves as possessing (A) ; but where these powers are readily ascertainable, and the other contracting party chooses to deal with them without inquiry, it would seem, in the absence of fraud, that the directors could not be held responsible, nor are they liable for a bond fide mistake as to the legal extent of the autho- rity ii). Three directors of a railway company opened, on behalf of the company, an account with a banlc, and sent a letter signed by the three as directors, requesting the bank to honour cheques signed by two of the directors and counter- signed by the secretary. The accoimt ha\ing been largely overdrawn by means of such cheques, the bank sued the company, recovered judgment, and issued an elegit. The proceeds being insufficient to satisfy the debt, the bank {e) Lindley on Partnership, p. 269. As to trading companies, see JTamil' ton Windsor Iron JForks, In re, ntnian ^- Edwardu, Ex parte, 12 Ch. D. 707. (/) Watcrlow v. Sharp, L. E.., 8 Eq. 501; In re Cefn Cilcen Mining ■Compam/, L. R., 7 Eq. 90; Beattic v. Lord Ebunj, L. R., 7 Ch. 777; L. R., 1 H. L. 102 ; 41 L. J., Chanc. 804. {(j) Irvine v. Union Bank of Australia, L. R., 2 App. Ca. 3G6, 380. See also on this subject, Rotjal British Bank v, Tnrquand, 5 E. & B. 248 ; 6 E: & B. 327. (/<) Itivhardson v. Williamson, L. R., 6 Q. B. 296. (') 8oe Lindley, p. 367. TRUSTEES, EXECUTORS AND OTHERS. 275 filed a bill iu eqiiity to make the directors personally liable. It was determined that the letter did not make the directors personally responsible for the debt, for that, assuming the letter to contain a representation that the directors had power to overdraw the account, and such representation to be erroneous, this was not a misrepre- sentation of fact which the persons making it were boimd to make good, but only a mistaken representation of the law ; and, moreover, that even if it had been such a false representation as the directors were bound to make good, the bank would have had no claim against them, since it had been able to enforce the same remedies against the company as if the representation had been true (i). Two of the directors of a joint stock company, by a letter to the company's bankers, notified that their manager had authority to di-aw cheques on acceount of the company. Such two directors did not form a majority of the directors of the company, as required by their act of incorporation, so as to bind the company. Although the company's accoimt was at the time overdrawn, and that fact was known to the two directors, the bankers honoured the manager's cheques on the authority so given to them. In an action by the bank against the two directors for advances made on account of the company upon the faith of their letter : — Held, that there was an implied warranty on their part, and that they were personally liable to the bank to the extent of the smns overdrawn by the manager subsequently to the date of their letter {j) . Trustees, Executors and others. — For the guidance of Trustees, trustees, executors and other persons filling representative others, characters, in dealing with bankers, and vice versa, it will be useful to state some principles, with brief illustrations. (0 Beattiev. Lord Ebimj, L. E., 7 Ch. 777; L. R., 7 H. L. 102; 41 L. J., Chanc. 804. (y) Cherry v. Colonial Banh of Australasia, L. E.., 3 P. C. 24; 6 Moore, P. C. C, N. S. 235. See also Weeks v. Bropcrt, L. R., 8 C. P. 427 ; JiicJiardso?i v. WiUiamson, L. R., 6 Q. B. 276. t2 276 KELATIOXS OF PUBLIC BODIES, ETC. TO BANKERS. A trustee or executor wlio lias deposited trust money in a bank pending investment, and not for an undue and unnecessary period, will not te liable on failure of the bank. But if a trustee or executor lias unnecessarily left trust monies in the bands of a banker wbicb be ougbt to have invested, and bas paid funds into a bank for tlie purpose of investment, and neglected for some time to make inquiries as to sucb investment, be will be liable in the event of the bank's failing, and this notwithstanding the usual clause of indemnity against tbe acts and defaults of others [k). The following cases will illustrate these rules. The executors and trustees under a will, having con- tracted to purchase land, sold out stock just before the time at which the purchase was to be completed, and de- posited the proceeds, intending merely a temporary deposit, in the banking house mth which the testator for many years had kept an account, and the principal clerk in which had been his confidential adviser in pecuniary affairs. The bank failed -svith the deposit in its possession : — Held, that the executors were not responsible (/). A., at his death, had about 2,000/. in the hands of his bankers, and his executors paid some monies which they had received on account of the estate, to their account at the same bankers, and drew out such sums as they re- quired from time to time. About nine months after his death the bankers became bankrupt, having, at that time, a balance of about 2,000/. belonging to the estate in their hands, and of which the smn of 1,000/. was ultimately lost by their bankruptcy. The Master, on a reference, found that there were not any purposes of their trust which ren- dered it necessary for the executors to retain the balance with the bankers, but the Court was of opinion that the executors were not answerable for the loss (w). (A) Ftinvick V. Clarke, 31 L. J., Chanc. 728 ; Challen v. Shippam, 4 Hare, 655; JicJidcn v. Wesley, 29 Boav. 213; Matthews v. £rise, G Beav. 23'J. {I) France v. Woods, Taral. R. 172. (m) Johnson v. Newton, 11 Hare, ICO. TRUSTEES, EXECUTORS AND OTHERS. 277 Executors of a testator, who died in 1862, had, in March, 1865, a balance of nearly 3,000/. at their bankers, who had been his bankers for twenty years. The estate realized more than 30,000/., and considerable sums were from time to time required to be paid into and out of the account, and the balance was larger than it would other- wise have been in expectation of a mortgage having to be paid off. A loss having resulted from the failure of the bank, the executors were held not justified in keeping a balance of more than 1,000/., and the loss upon the excess above that sum had to be borne by them (w). An administrator who had deposited trust monies in a private bank on a separate account current, using ordi- nary prudence, was held not to be liable for the loss of the monies tlirough the failure of the bank, although the monies had been suffered to remain so deposited for three and a-half years after the death of the intestate, and for nearly a year and a-half after the administrator had carried into chambers, in the suit, his accounts showing a large balance against himself (o). A sole executor and trustee of personal estate of a tes- tator, in trust for his widow for her life, and after her death, to pay or otherwise divide it in equal shares amongst his children, paid 300/., part of the assets, into an old-established bank at Chichester, who had for many years been his own bankers, with a direction in writing to invest the money in Consols in his name for the pm'poses of the trust. Instead of doing so, the bankers, without his knowledge, opened a new account with him, in which they gave him credit for 300/., the executor and another person, his partner, having a joint account with the bank in which no notice of the 300/. appeared. The executor, relying that the investment had been duly made, never called for the transfer note, or made any other inquiry, and remained in ignorance that the investment had not («) Asthury v. Bcaslcy, 17 W. R. 038. (o) Finch v. Marcon, 40 L. J., Chauc. 537. 278 RELATIONS OF PUBLIC BODIES, ETC. TO BANKERS. been made until tlie bankers became bankrupt, a period of nearly five months. The executor proved for the 300/. imder the flat^ and insisted that he was not bound to account for more than the dividend received, alleging that the employment of bankers was the necessary and only course available to a person resident in the country, to invest money in the government funds ; but he was decreed to pay the whole 300/. with interest at 4 per cent. {p). By a decree made in an administration suit, a contract for the sale of property belonging to an estate was to be carried out by a trustee, but there were no directions given as to the payment or receipt of the purchase-money. The trustee, with the acquiescence of the solicitor of the tes- tator, and others interested under his will, deposited the purchase-money in a private bank, at interest. The bank afterwards failed : it was held, that the trustee was not liable for the money so lost ; and he would not have been liable even if the money had been deposited so as not to be repayable on demand {q). So if a trustee, or other person standing in a fiduciary position, mixes trust money with his own so that it cannot be separated with perfect accm'acy from the latter, the cestui que trust has a right to resort to the whole of the trustee's property for what is due to him (r). On the same principle an attorney paying in his client's money to his bankers to his own accomit, mixing it with his own, is liable on the faihu'e of the bank to pay the whole to the client (s) . So when a trustee pays trust money into his banker's accoimt, thereby mixing his money with his OAvn, subsequent sums drawn out by him will bo attributed to the earliest items on the credit side of liis account for the time being, and the trust money will in this way in its turn be con- (;j) C'haUcn v. Shippam, 4 Hare, 5.55. ('/) li'ilkcs V. Groomc, 3 Drew. 584. {)■) Sec CooJc V. Addison, L. R., 7 Eq. 471. (v) Robbmn v. Ward, R. & M. 274 ; 2 C. & P. 59. PAYMENT BY BANKERS. 279 sidered as di-awn out, wlietlier or not tlie result "be tliat a balance remains of Kis O'svn monies {I). H. having a balance of 3,961/. lO.s;, 3(/. at liis bank paid in 5,000/. trust money. Between the time of doing so and his death he paid in various simis together amoimting to 12,847/. 4.S. 4f/; No part of the sum was devoted to the purposes of the trust, and he was stiU liable for the 5,000/. at the date of his death :— Held, that the balance remaining at his bank foi-med pai-t of his general estate, and could not be appropriated by the beneficial owner of the 5,000/. {t). But when a customer has opened with his bankers sepa- rate accounts specially headed with the name of the trusts to which the monies paid into those accoimts belong, the bankers are not at liberty, upon the bankruptcy of the cus- tomer, to apply those monies in pajanent of the balance due to them upon the customer's overdra^vn private account (?^?). So if an aecoimt is opened as an executorship aecoimt, the bank is affected with notice of all such equities as may be attaching thereto (r). Payment hy Bankers. — One of several trustees cannot, Payment by Tinless expressly authorized to do so, give a good receipt tmstees o? by himself, and his .co-trustees must join {y). executors. So payment by bankers to one of several trustees, of the proceeds of stock, sold out under a joint power of attorney from the trustees, does not discharge the bankers as against the other trustees, unless the trustee is authorized by the others (;:). Formerly at law the signature of a trustee was con- clusive evidence that he had received the money ; but in equity he was and of com-se still is permitted to show that {t) Broicn v. Adams, L. R., 4 Ch. 764 ; 39 L. J., Chanc. G7. See also Ve)inelly.Bcffdl,4.-D.,M.ScG^.^n. ^ . ^ , „, iw) Exiyarie Kingston, L. R., 6 Ch. 632 ; 40 L. J., Bank. 91. [x) Bailey V. Finch, L. E., 7 Q. B. 34 ; 41 L. J., Q. B. 83 ; 20 W. E. 294. _ \y) Walker v. Symonds, 3 Sw. 63 ; Lee v. Sankey, L. R., lo Eq. 204. (s) Stone V. Marsh, R. & M. 3G4. 280 RELATIONS OF PUBLIC BODIES, ETC. TO BANKERS. he merely joined in the receipt for the sake of conformity, and that he never in fact received the money (b). A trustee, therefore, may safely permit his co-trustee to receive or collect trust monies (c). In the case of executors, inasmuch as one executor can alone give a good discharge, it was formerly thought this privilege did not attach, but the rule seems now to he as follows : "If the receipt be given for the purpose of mere form, the signing will not charge the person not receiving ; but if it be given under circumstances purporting that the money, though not actually received by both executors was loido' the control of both, such a receipt shall charge ; and the true question in these cases seems to be whether the money was under the control of both executors" {d). A trustee is, more- over, liable if he permit his co-trustee to retain trust funds for a longer period than necessary (e). Where a married woman and A. were appointed exe- cutrix and executor of a "^dll, but the husband dissented from his wife's administering, and probate was refused to her, and the bank owed a balance to the testator and had securities of his in their hands, and paid the balance and delivered the securities to the wife ^\ithout knowledge of the husband's dissent, or the refusal of probate, the bank was held to have a good defence to an action by A. to recover the same (/). So payments by an executor cle son tort to a bank in satisfaction of debts owing to the bank by the deceased, in respect of an overdrawn account, the executor cle son tort really acting at the time as executor, so that the bank might reasonably suppose him to be rightful representative, are good, and the bank may retain them against the repre- sentative of the deceased (g). {b) Brice v. Stolces, 2 "W. & T. L. Ca. 865 ; Fdlous v. MitcIicU, 1 P. & W. 81 ; and see now Jud. Act, 1873, s. 25, subs. 11. (f) Toivnlcij V. Sherbourne, 2 W. & T. L. Ca. 858. {d) Per Lord Redesdale, in Joy v. Campbell, 1 Sch. & L. 341. [c) Brice v. Stokes, supra. (/) Femberton v. Chapman, 26 L. J., Q. B. 117; 7 EI. & Bl. 210. (V) Thompson v. Kardinj, 2 El. & Bl. C30. PAYMENT BY BANKERS. 281 If a banker, employed to receive and to pay over the assets of a testator, pays them over, so that they may be applied for the purposes of the will, he is not responsible for the executor's misapplication, but if, in dealing with the executor, he pays the assets for the private purposes of the executor, he is particeps criminis in a breach of trust, and he is equally a party to the breach of trust, whether he applies the money to the debt or to the trade of the executor (h) . If the bankers of trustees WTongfully sell out stock of the trustees, and apply it to their own purposes, the measure of their liability is the sum paid in replacing the stock (i). If one of the banking firm sells the stock unkno^vTi to the partners, but under circumstances such that they might, by the exercise of proper diligence and attention have discovered it, equity will impute knowledge, and hold them all liable (J), even though the selling of stock did not come Avithin the scope of the fii-m's business. Where it does so, knowledge is not necessary as previously stated (k). If one executor places the testator's money in the hands of the other, who happens to be a banker, so that the act is not an improvident act, the executor depositing is not chargeable in case of a loss, inasmuch as if he had been sole executor, and had under the same circimistances de- posited at a bankers, he would not have been liable (/). If three executors have an account in their names with a banker, and one draws a cheque, it seems the bankers may refuse to cash it, if they have received notice from one of the others, not to part ^^ith the money (;«) . As has been already suggested an executor placing money which he ought to have invested in his banker's (A) See pe7' Sir J. Leach, in Keane v. Robarfs, 4 Mad. 332, 358. See Davis V. Spurling, 1 Russ. & M. 64. (i) Sadler v. Lee, 6 Beav. 324. [j) Ex parte Heaton, Buck, 386 ; Sadler v. Zee, 6 Beav. 324. {k) Ante, p. 252. (l) Chambers v. Minchin, 7 Ves. 198 ; 2 Wms. Exors. 1552. {m) Gaunt v. Taylor, 2 Hare, 413. 282 RELATIONS OF PUBLIC BODIES, ETC. TO BANKERS. hands, mixed with his own account, is liable for the amoimt on the failure of the hanker (w). The mere fact that an executor has opened an account with a banker as executor, does not entitle the banker to rank as a creditor upon the testator's estate in respect of an overdrawn balance of the account (o). Receiver. Receiver. — A receiver under an order in Chancery is not hable for sums deposited ydih a banker in good credit, provided there is nothing to attach fraud, and no laches, (as if he has left the money an miwarrantable time in the banker's hands,) on the failui'e of the banker. In such a case a receiver will be liable, if he leaves money in the hands of his bankers, and receives interest upon the simas so deposited, and the bankers fail {p). {») Fletcher v. IFalker, 3 Mad. 73. (o) Farhallx. Farhall, L. E,., 7 Cli. 123 ; 41 L. J., Chanc. 146. {p) Drevcr v. Matideslei/, 8 Jiir. 547. ( 283 ) CHAPTER XXXI. LIBEL ON BANKERS. Bankers, in partnersliip, could always join in maintaining an action for a libel against tliem in respect of tlieir busi- ness and touching their credit, without disclosing the ratios or shares in which each of them was interested in the con- cern {a) ; but imtil recently only joint damages could have been given in such an action, and any separate damage for injury caused to any individual partner was not recoverable by him. But now, by Ord. XVII. r. 6 of the Judicatm-o Acts, claims by plaintiffs jointly may be joined with claims by them or any of them separately against the same defendant. Consequently in a case like that under con- sideration, where one partner has suffered some especial injury, he may now recover damages in respect thereof as well as joint damages with the firm {b). The firm itself, however, cannot recover damages for any private iujmy caused to one of its partners, nor, on the other hand, where one partner has been Hbelled qua his private capacity, can he recover damages caused to the fmn. To say of a banker that he has suspended pajTiient is actionable : for it is saying that he cannot pay his debts ; and a temporary inability to pay debts is insolvency ; and such action is maintainable, without alleging or showing special damage {c) ; and it has been held, that where such an imputation has been made against one partner, the credit of the firm is also reflected upon, and that the partner, the firm, or both, may sue for damages (d) . («) Ward V. Smith, G Bing. 749 ; 4 C. & P. 302 ; Ze Fami v. Maleolmson, 1 H. L. Cas. 637; Forstcr v. Zctivson, 3 Bing. 452 ; 11 Moore, 360 ; Robiu' son V. Marchant, 7 Q. B. 918 ; Eaythorn v. Lawson, 3 C. & P. 196. ih) See Booth v. Briscoe, 2 Q. B. D. 496 ; 2.5 W. R. 838. Ic) Forstcr v. Zatcson, supra. (d) Harrison v. Bcvington, 8 C. & P. 708. ( 284 ) CHAPTER XXXII. CRIMINAL LIABILITY OF BANKERS. A CLEAR opinion was expressed by two judges in a case already referred to (a), that a banker who negotiated bills intrusted to his care, knowing himself to be on the eve of bankruptcy, would (notwithstanding that it was the usage of the county of Lancaster amongst bankers) run great hazard of incurring the penalties enacted in 52 Geo. III. c. 63, a statute passed to prevent the embezzlement of securities for money deposited for safe custody or for any special purpose with bankers. That statute is now repealed ; but similar provisions were first substituted by the 7 & 8 Geo. lY. c. 29, ss. 49, 50, and by the 20 & 21 Vict. c. 54, which were subsequently consolidated in 1861 in one statute. The consolidating enactment, 24 & 25 Vict. c. 96, s. 75, is as follows : — As io Frattds hj Agents, Banlcers, or Factors. — Whoso- ever, having been intrusted, either solely or jointly with any other person, as a hanher, merchant, broker, attorney or other agent, with any money or security for the pay- ment of money, with any direction in writing, to apply, pay or deliver such money or security, or any part thereof respectively, or the proceeds or any part of the proceeds of such secmity for any purpose, or to any person specified in such direction, shall, in violation of good faith and con- trary to the terms of such direction, in anywise convert to his own use or benefit, or the use or benefit of any person other than the person by whom he shall have been so (rt) Thompson v. Giles, 2 B. & C. 427, 434, ante, p. 141. MISAPPROPRIATING SECURITIES. 285 intrusted, such, money, security, or proceeds, or any part thereof respectively ; and whosoever, having been intrusted either solely or jointly with any other person, as a banker, merchant, broker, attorney or other agent, with any chattel or valuable security {h), or any power of attorney for the sale or transfer of any share or interest in any public stock or fund, whether of the united kingdom or any part thereof, or of any foreign state, or in any stock or fund of any body corporate, company or society, for safe custody, or for any special purpose, without any authority to sell, negotiate, transfer or pledge, shall, in violation of good faith, and contrary to the object or purpose for which such chattel, security or power of attorney shall have been in- trusted to hun, sell, negotiate, transfer, pledge, or in any manner convert to his own use or benefit, or the use or benefit of any person other than the person by whom he shall have been so intrusted, such chattel or security, or the proceeds of the same, or any part thereof, or the share or interest in the stock or fund to which such power of attorney shall relate, or any part thereof, shall be guilty of a misdemeanor, and, being convicted thereof, shall be liable to be kept in penal servitude for any term not ex- ceeding seven years, and not less than five years (by 27 & 28 Yict. c. 47, s. 2), or to be imprisoned for any term not exceeding two years, with or without hard labour, and with or without solitary confinement. But nothing in this section contained, relating to agents, shall affect any trustee in or under any instrument whatso- ever, or any mortgagee of any property, real or personal, (b) By sect. 1, the term "valuable security" is defined to include any order, Exchequer acquittance, or other secm-ity whatsoever, entitling or evidencing the title of any person or body corporate to any share or interest in any public stock or fund, -whether of the United Kingdom, or of Great Britain, or of Ireland, or of any foreign state ; or in any fund of any body corporate, company or society, whether within the United Kingdom or in any foreign state or country ; or to any deposit in any bank, and also any debenture, deed, bond, bill, note, warrant, order or other security whatsoever, for money or for payment of money, whether of the United Kingdom, or of Great Britain, or of Ireland, or of any foreign state ; and any document of title to lands or goods. CRIMINAL LIABILITY OF BANKERS. in respect of any act clone by such trustee or mortgagee, in relation to tlie propei-ty comprised in or affected by any sucb trust or moi-tgage ; nor shall restrain any hanker, merchant, broker, attorney or other agent from receiving any money which shaU be or become actually due and pay- able upon or by virtue of any valuable secui'ity, according to the tenor and effect thereof, in such manner as he might have done if this act had not been passed ; nor from selling, transferring, or otherwise disposing of any securities or effects in his possession, upon which he shall have any lien, claim or demand, entitling him by law so to do, unless such sale, transfer, or other disposal shall extend to a greater number or part of such secm^ities or effects than shall be requisite for satisfying such lien, claun or demand. By sect. 76, whosoever, being a hnuker, merchant, broker, attorney or agent, and being intrusted, either solely or Jointly with any other person, with the property {c) of any other person for safe custody, shall, with intent to defraud, sell, negotiate, transfer, pledge, or in any manner convert or appropriate the same or any part thereof to or for his own use or beneiit, or the use or benefit of any person other than the person by whom he was so intrusted, shall be guilty of a misdemeanor. But by sect. 85, nothing in these sections shall enable or entitle any person to refuse to make a full and complete discovery by answer to any bill in equity, or to answer any question or interrogatory in any civil proceeding in any Court, or upon the hearing of any matter in bankruptcy or insolvency, and no person shall be liable to be con\ieted by any evidence whatever in respect of any act done by him, if he shall at any time previously to his being charged (c) By sect. 1, the term " property" includes every description of real and personal property, money, debts, lepacies, and all deeds and mstm- ments relating,' to or evidencing the title or right to any property, or giving a right to recover or receive any money or goods, and not only such property as shall have been originally in the person or under the control of any party, but also any property into or for which the same may have been converted or exchanged, and any acquired by such con- version or exchange, -whether immediately or otherwise. DISCLOSURE OF CIRCUMSTANCES. 287 witli such offence have first disclosed such act on oath, in consequence of any compidsory process of any Coiu't of Law or Equity, in any action, suit or proceeding, which shall have been bond fide instituted by any party aggrieved, or if he shall have first disclosed the same in any compul- sory exammation or deposition before any Com-t upon the hearing of any matter in bankruptcy or insolvency. And by sect. 86, nothing in these sections contained, nor any proceeding, conviction or judgment, to be had or taken thereon against any person imder any of the said sections, shall prevent, lessen or impeach any remedy at law or in equity, which any party aggrieved by any offence against any of the said sections might have had if the act had not been passed ; but no conviction of any such offender shall be received in e\idence in any action at law or suit in equity against him ; nor affect or prejudice any agree- ment entered into or secm-ity given by any trustee, having for its object the restoration or repayment of any trust property misappropriated. In a case of great importance and notoriety, in which certain bankers, Strahan, Paul and Bates, had fraudulently disposed of a number of Danish bonds, which had been deposited mth them for safe custody, and for the pm-pose of receiving the dividends upon them for the use of their customer, who had deposited them, it was attempted to take advantage of the proviso contained in the 52nd sect, of the 7 & 8 Geo. IV. c. 29 (now repealed by the 24 & 25 Vict. c. 95, and sunilar to sect. 85 of the 24 & 25 Vict. c. 96, above referred to), by the bankers becoming bankrupts, and, after they had been arrested and im- prisoned on the criminal charge, making a voluntary declaration in the Court of Bankruptcy as to the misappro- priation of the securities : but the attempt failed. They were indicted at the Central Criminal Court {d), (d) The trial took place October 2G, 27, 1855, coram Alderson, B., Martin, B., and Willes, J. Sessions Paper, 18o4 — 1855, p. 695 ; 7 Cox, C. C. 85. 288 CRIMINAL LIABILITY OF BANKERS. for that, being "bankers and agents to John Griffith, clerk, and being intrusted by him with certain bonds for safe custody without any authority to pledge or make away with them, in violation of good faith, did sell and convert the same to their o^vni use and benefit. Having pleaded not guilty, an application was made on their behalf for permission to plead double by adding a plea, alleging the fact of their having made the disclosm-e above mentioned, with a view of avaihng themselves of the 52nd section of 7 & 8 Geo. IV. c. 29 ; but the application being considered as resting on no authority, and made only to the discretion of the Court, was refused ; and, as evi- dence was afterwards admitted for the purpose of bringing before the Court the steps which had been taken by the prisoners in this matter, it may perhaps be regarded as settled that, in future, any banker in like cii'cumstances may avail himself of a defence similar to this to the cri- minal charge, under the plea of not guilty, if at all ; and that it is not necessary to plead it specially. It was proved that the bankers had sold certain Danish bonds, and transferred others belonging to Dr. Griffith, a customer, who had deposited them with the prisoners, as his bankers and agents, for safe custody, and in order that they might obtain for him the dividends as they fell due, and that he had never given them any authority to pawn or seU the same or any part of them, and that he had never overdi-awn his account mth them. For the defence, it was proved, that on the 17th of June, 1855, one Montague John Tatham filed a petition for ad- judication in bankruptcy against the bankers ; that they were adjudged bankrupts on the same day, and afterwards surrendered ; that they made a statement concerning the disposal of the securities in question, without examination, and not in pursuance of any order of the sitting commis- sioner; that they made this declaration for the general purpose of assisting the creditors, and for the special pur- pose of making a disclosure under the 7 & 8 Geo. lY. c. 29, DISCLOSURE OF CIRCUMSTANCES. 289 and that they were then questioned by the solicitor for the fiat as to the truth of the statement, and each answered (affirming its truth) " Yes." The commissioner had, pre- viously to this, refused an application by counsel on behalf of the bankrupts to be permitted to examine them with reference to the statement as to the disposal of the securi- ties, saying, " If any creditor applies for the banki-upts to be examined, he can do so ; but, upon the banki^upts' own application, I refuse it." The bankers were convicted, and sentenced to fourteen years' transportation. In a recent case {e), having a considerable bearing upon the points above determined, it appeared that an agent, having been intrusted with a bill of lading, without the authority of his principals and in violation of good faith deposited the bill of lading mth his bankers, for his o^\ti benefit, as a security for advances. He was charged with this offence before a magistrate. The depositions taken in support of the charge contained ample evidence to sustain it. Having afterwards become bankrujit, he was taken by his creditors and examined respecting the charge before a commissioner in bankruptcy, and he then made a state- ment in every respect in accordance with the evidence contained in the depositions. He was afterwards indicted on the same charge. On the trial his examination in bankruptcy was tendered by his counsel as a defence, as showing that he had disclosed the act before the commis- sioner in bankruptcy previously to being indicted for the offence, and that, therefore, he was not now liable to be prosecuted or convicted; the Court of Criminal Appeal imanimously held that this evidence of a disclosure was admissible under the plea of not guilty, but the majority of the Judges were, however, of opinion, that as the agent only stated before the commissioner matter which had been previously known, and previously proved before the magis- (f) Reg. V. Sl-cen, 28 L. J., M. C. 91 ; Bell, C. C. 97. n U 290 CRIMINAL LIABILITY OF BANKERS. trate, he had not made any disclosure within the meaning of the statute, and that, consequently, he was not entitled to its protection. The minority of the Judges, however, holding that, as the statement of the agent was obtained in the course of a compulsory judicial examination, instituted bond fide by the creditors for theii' own interest, it was a disclosm'e before the commissioner, not-withstanding the pre\T[ous inquiry and publicity of the matter. The liability affecting dii-ectors for making false reports of the solvency of their banks, and the prosecution and pimishment of delinquent directors, officers, and managers of insolvent banking companies on winding-up, will form the subject of a separate consideration. ( 291 ) CHAPTER XXXIII. DISCOUNTS. Much of tlie business of bankers consisting in the dis- counting of bills of exchange, it is necessary to state some points of the law afPecting this matter. The rule has been stated, that if a person holding a bill of exchange delivers it to a banker to be discounted, or if, by the course of dealing between the customer and the banker, bills received by the latter, on accoimt of the former, are considered by both parties as cash, minus the discount, so that the customer is at liberty to di'aw on the banker, as against those bills, beyond the amount of actual cash that may be standing to his account in the books, then, in the event of the bankruptcy of the banker, the assignees of the bankrupt are entitled to the bills. For where the banker discounts a bill for a customer, giving him credit for the amount of the bill, and debiting him vdth. the discount, there is a complete purchase of the bill by the banker, in whom the whole property and interest in it vest, as much as in any chattels he possesses {a). Therefore, discomiting in this way makes the banker the purchaser of the hill. If, moreover, a person discoimts bills with bankers, and receives as part of the discount other bills not indorsed by the bankers, and these latter bills tm-n out to be bad, the bankers are not liable ; for, having taken them mthout indorsement, the holder takes the risk on himself, inas- much as the bankers, by not indorsing them, have re- fused to pledge their credit to their validity, and the {a) Carstalrs v. Bates, 3 Camp. 301. See Ex parte WakeJieM, 1 Eose, 242 ; Thompnon v. Giles, 2 B. & C. 422, aud ante, p. 138. U 2 292 DISCOUNTS. transferee must be taken to liave received them on their own credit only (/j). So a banker discounting a bill, whether for a customer or for a stranger, there being no indorsement by the cus- tomer or stranger, and the bill not being given in payment of an antecedent debt, is a mere pm'ohaser, and, on the bankruptcy of the acceptor, has no recoiu'se against the pai-ty from whom he took it (r). A manager of a banking company had permission to carry on his separate trade ; as a trader, he dealt with the company on the terms usual between banker and customer, and being possessed of certain bills in his character of trader, di^a^vn and accepted by firms of good reputed credit, he deposited them without indorsing them, and obtained an advance upon them, his account at the time being already slightly overdi-awn ; therefore, this transaction was a loan, not a discount, and upon the bankruptcy of the drawers and acceptors, the manager was held bound to make good the loss to the bank {d). Bankers discoimting a customer's bills at a time when his accovmt is largely overdra^vn, and carrying the amount to the credit of his account, are holders for value, though no money actually pass (e). Presumption in favour of bankers. Presumption in favour of Banhcrs. — Such a degree of credit is given to bankers by the Courts, that ^;;7»Ki facie they will be taken to have discoimted mth good faith. Thus, where a clerk was sent by his master, a customer of a bank, to ask for discomit for a bill, but mth orders to tell them, when he asked for it, the particulars of an (A) Fyddl V. Clarl\ 1 Esp. 447 ; Emhj v. Lijc, \o East, 7 ; Bank of Eng- land V. Newman, 1 Ld. Ilaym. 442. (c) Bank of Engliml v. Newman, 1 Ld. Raym. 442 ; 12 Mod. 241. {(l) ll'atkin V. VampheU, 1 Jur., N". S. 131. [e) In re Carew, 31 Beav. 39. For cases supportin;^ the rule tliat a fluctuatini^- balance may be a valuable conwideratiou for a bill, see Bease V. Uirst, 10 U. & C. 122 ; Bichards v. .Maccy, 14 M. & W. 484. The onus of provint;^ such a consideration is upon the payee. In re Boys, L. K., 10 Eq. 407 ; 3a L. J., Chanc. C55. SET-OFF AND MUTUAI, CREDIT IN BANKRUPTCY, ETC. 293 arrangement between the holder and the master, the Court would not presume that the clerk told the bankers (who discounted the bill) these circimistances, but, on the con- trary, presimied that they bond fide discounted the bill without notice of those circumstances, in the absence of proof to the contrary (/). But when A. fi-audulently obtained possession of the acceptances of B., and got them discounted, and can-ied to his account by a banking com- pany to which he was largely indebted at the time, and of which he was a director and local manager, it was held that the bank had notice, and coidd not be considered bona fide owTiers because of their connexion with A. {g). Set-off and Mutual Credit in case of Banh'uptcij under Set-ofE and 32 S^' 33 Vid. c. 71, s. 39.— Palmer, having bori'owed money ™^' ^^ ^'^^ from his bankers in Calcutta, deposited East India Com- pany's paper mth the bank to a greater amount than the debt, as a collateral secm-ity, and authorized the bank, in defaidt of repa^nnent of the loan by a given day, to sell the paper for reimbursement of the bank, rendering him any sm'i)lus. Before default in repajTiient of the loan he became insolvent : at the time of the insolvencj^, the bank were also holders of two promissory notes of Palmer & Co., which they had discomited for them before the transaction of the loan and the agreement as to the deposit of the Company's paper. The time for the repayment of the loan ha\ang expired, the bank sold the Company's paper, the proceeds of which, after satisf;>ang the principal and interest due on the loan, produced a considerable surplus. In an action by the assignees of Palmer & Co., against the bank to recover the surplus, it was held, that the bank could not set off the amount of the two promissory notes ; and that the clause of mutual credit in the Bank- rupt Act did not apply. For though the bank gave credit to Pabner for the notes they had discoimted for him, (/) MiddJeton v. Barncd, 18 L. J., Exch. 433. - {ij) In re Carcic, 31 Beav. 39. 294 DISCOUNTS. there was uo corresponding credit given by liim to tliem; it was uncertain whether there would be any money coming to him or not, and the credit Avas all on one side (/?). Bankers discounted for a customer bills of exchange to a large amount, placing the amount to the credit, and the amount of the discount, to the debit of themselves. The customer became banki"upt, having at the time a balance at the bank in his favour of 179/. 19.s. lid. The bills were indorsed by the bankrupts in blank, and some of them were paid by the acceptors before the bankruptcy ; the others, far exceeding in amount the above sum, did not become due till some time after the bankruptcy. Before they became due, the assignees commenced an action for money lent, to recover the balance, and subse- quently, but still before the bills became due, the bankers proved against the bankrupt's estate for the whole amount of the bills, deducting the balance of 179/. 19s. lid. There was held, in this case, not to be any purchase of the bills, but merely a loan of money upon them {i) . It is material to distinguish this case from the former: in that there was no mutual credit ; the Company's paper was deposited for a pai-ticular purpose, and no credit was given for the sm'plus. Also, the duty of the assignees there was to redeem the paper immediately, and if they had done so, no debt whatever would have been due in respect of the loan. Here was a mutual credit, and the bankers being entitled to set off, the assignees could not prevent their having the benefit of it, by bringing the action too soon (/). But though one of the debts constituting the mutual credit need not bo due, it is necessary that tlic mutual credit should have existed before the bankruptcy. So a (/() Young v. Bank of Bengal, 1 Moore, P. C. 150 ; but sec Xaorojl v. Chartered Bank of India, L. R., 3 C. P. 444 ; Londim, Bombay and Medi- terranean Bank v. Xarraivag, L. R., 15 Eq. 93 ; Astleij v. Giirneg, L. R., 4 C. P. 714. (() Alsar/er v. C'urrie, 12 M. & W. 751, 757, 758. See Stare;/ v. Barns, 7 East, 435. SPECIFIC APPROPRIATION OF PROCEEDS ON DISCOUNT. 295 bill drawn by a debtor and accepted by a creditor after the former had assigned his property to trustees under the .Bankruptcy Act, 18G1, but before registration thereof, cannot be set off against prior acceptances of the debtor, because the date of the deed and not the time of registration is to be looked to, and at the former time there was no mutual credit (/i). Specific Appropriation of Proceeds on Discount. — Bills were remitted to be discounted, the proceeds being directed to be applied in a particular way : the remittee did not get the bills discounted, but received the money on them when due. Before that time the remitters had stopped payment, having first desired to have the bills retm-ned to them : and they became bankrupt before the bills were paid to the remittee. The latter had to refund to the assignees the whole of the money (/). And so bills remitted for sale, the proceeds to be applied to a particular piu'pose, remain the property of the remitters until the purpose is satis- fied {m). So, where a customer pays a sum of money into a bank, for the pm-pose of providing for particular bills, he being at the time indebted on advances to the bank to a larger amount, and they, instead of following his instructions, place the money to the credit of his account, and, conse- quently, the bills are refused acceptance, and whilst they remain unpaid in the hands of the holders the customer becomes bankrupt, his assignees may recover the whole of the sum from the bank («). A branch of the National Provincial Bank of England discounted for a customer a bill di-awn by him, and ac- cepted by A. This bill, which v/as for 3G5/., was dated (/.) Ex parte Ei/dcr, L. R., 6 Ch. Ap. 413; 40 L. J., Bank. G3 ; Sdbi/ V. Graves, L. E,., 3 C. P. 59i. (/) Buchanan v. Fimllay, 9 B. & C. 738. See p. 138. {»)) mUbjloU Scalx. Dent, 8 Moore, P. C. 319. \n) mily. 8inith, 12 M. & W. G18; Farley v. Tariur, 26 L. J., Chauc, 710. Seep. 138. 296 J)ISCOL'NTS. 17tli January, and was at tkree months, and would conse- quently become due 20th April. On the 19th the cus- tomer brought another bill to the bank, for the same smn as the former, dated 18th April, for the pm-pose of retiring the former. The manager of the bank consented to retii-e the former bill, but the coiu'se pursued was not strictly a retiring of the bill ; for the com-se taken was, to send up to London the fresh bill, giving directions to their London agents to order pajnnent of the original bill, "^hich had been pre\dously sent up to them by the manager. A. was credited in his account \^'ith the amount of the bill, 365/., less the discoimt. After some time, and various fmiher transactions be- tween A. and the bank had taken place, the bill of the 18th April proved to be forged and was dishonoured. Under these circmnstances it was contended, in an action by the bank on the first bill against the acceptor, that what had been done by the bank in regard to the first bill was equivalent to a papnent of it, as they had given the drawer credit for the smn for wliich it was di-awn, less the discoimt ; but to this the Com't did not assent (o) . "Where a customer places in the hands of his bankers two bills for 1,000/., indorsed by him, for the amoimt of which it is agreed he shall cbaw, the bankers having refused to discoimt them, and the customer only di-aws for 65/., and the bankers employ a broker to discount the bills, and become bankrupt shortly after the bills are de- posited, the customer is entitled to the proceeds of the bills (;;). Re-discount- Ee-(liscountinfj. — A customer drew a bill, which was ^^' accepted, payable at his bankers' ; he discoimted it with the bankers, indorsing it to them; they re-discounted and indorsed it to a third person. On the matmity of the bill it was presented by the (o) BcU\. Buckhu, 25 L. J., Exch. 163; 11 Exch. 031. (p) Ex parte Hdtcarch; 2 M., D. & De G. 025. ACCOMMODATIOX BILLS. 297 holder at the bank, along wdth other bills payable there, all indorsed by the bankers ; all these were paid Ts-ithout any indication whether the bankers paid as indorsers or as agents for the acceptors ; the account of the acceptor of this bill was overdraA\Ti at this time, and he stopped pay- ment the same day. Next day notice of dishonom- was given by the bankers to the customer, and he was debited ^\ith the amoimt of it. It was left to the jury to say whether the bankers paid as indorsers on their own accoimt, or as agents of the acceptor. The jury found that they paid in the former character, which was tantamount to finding that the bill was dishonom-ed, and they had a verdict, and the Court held the bankers to have had a right to pay as indorsers, reserving to themselves time to inquire whether they would honour the bill or not, and that there was no obligation on them to inform the holder in what capacity they paid {q). Accommodation Bills. — "WTiere bankers discount for a customer, the drawer, a bill accepted for his accommoda- tion, which is dishonoured, and after that event, have notice that it was an accommodation bill, and are requested by the customer not to apply to the acceptor, to which they assent, and afterwards the customer's account with them shows a balance in his favour to a larger amount than the bill, the bankers are bomid to discharge the bill out of the balance, and cannot keep it as a security for the fluctu- ating balance which might ultimately become due to them, and, therefore, if they sue the acceptor, they ^\•ill be non- suited {}'). It makes no difference that after the balance has been in his favour, as above stated, the customer becomes greatly indebted to the bank, and fails before action (r). {q) Pollard \. Ogden, 2 EL & BL 459; see Attcnhorough v. Mackenzie, 25 L. J., Exch. 244. {>■) Marsh v. Hoidditch, Chitty on Bills, 283, n., 10th ed. ; compare Hammerslci/ v. Knowlys, 2 Esp. 665. As to what amounts to an accom- modation bill, see In re London, Bombay, %e. Bank, L. R., 9 Ch. 686 ; 48 L. J., Bank. 683. 298 DISCOUNTS. Death of Drawee. — Bankers, having discoimted for a customer (wlio did not indorse) a bill di'a-\vn by B. on A., another customer, and accepted by him, payable at the bankers' house, on the morning of the day on which it be- came due, ^vrote it off in A.'s account to his debit, having at that time in their hands 1,421/. to his credit. The bill was for 467/. A. was at this time dead, but this was imknown to the bankers at the time they debited A. The bankers were held to be entitled, when the bill be- came due, to reimbm-se themselves out of the acceptor's fimds in their hands, having no notice of the death (s). Conditional Conditional Indorsement. — The payee of a foreign bill indorsement. ^^ exchange (one Eoberison) annexed a condition to his indorsement before acceptance, thus, " Pay the mthin sum to Messrs. Clerk and Boss, or order, upon my name appearing in the Gazette as ensign in any regiment of the line, between the 1st and 64th, if within two months from this date, E. Eobertson." The bill was dra-svn upon and accepted by Messrs. Ken- sington & Co., bankers, in London, but not till after it was indorsed by the payee, as above, and after it was indorsed by Clerk and Eoss. There were several mesne indorse- ments, until it came by indorsement to the Bank of Eng- land, who discounted it. When the bill arrived at matu- rity, including the daj's of grace, the Bank of England presented it to Messrs. Kensington, by whom it was paid. Eobei-tson's name never having appeared ui the Gazette as ensign in any regiment of the line, the condition of tlie indorsement was not performed; and, upon Eobertson piling the acceptors for the amount of the l)ill, the Com-t considered him to be entitled to recover, because Messrs. Kensington had accepted after the condition had been superadded to the bill, and that condition had been super- added to the bill at the outset, and before it got into cir- (s) Rogcrson v. Ladbrokc, 1 Biug. 93. RESTRICTIVE INDORSEMENTS. 299 dilation, and tlie condition not ha\'ing "been performed, and the acceptance ha^dng been made ■with knowledge of the restriction, the property, in such case, reverted to the payee, who had a right to come upon the acceptors at maturity, just as if he had not indorsed at all (t). Hence it follows, that such a bill cannot be safely dis- counted without ascertaining that the condition on which the payee indorses has been satisfied (ti) . It has, however, been questioned whether it is allowable by the custom of merchants to indorse a bill of exchange ydih a condition which restrains the indorsee fi'om indorsing over in a certain event (x). Restrictive Indorsements. — The payee or indorsee of a bill of exchange having the absolute o^^^lership in, and the j^ower of disposal over, it, has like^^ise the power of limiting its payment to whom he pleases, and of designating the pm-pose for which such pajanent shall be applied, and so to restrain its negotiability (y). Some considerable difficulty frequently arises in deciding what does and what does not amount to a restrictive indorsement. An in- dorsement to " A.," without mentioning " or order," will not amount to a restrictive indorsement, nor prevent the bill from being negotiated ; for, the Courts leaning strongly in favom' of the negotiability of a bill, nothing shoi-t of express words or necessary implication will have that eflect (s). The words "Pay to A. B. only," or "A. B. and no one else," on the other hand, would clearly amomit to a restrictive indorsement, so as neither to authorize in- dorsement over or pa^Tuent to any other person {a). Where the person uses words to show that the restrictive [t) liobertson v. Kensington, 4 Taunt. 30 ; Savage v. Aldrcn, 2 Stark. 232. («) Ibid. {x) Soarcs v. Gb/n, 8 Q. B. 2-i ; 14 L. J., Q. B. 313. (y) Story on Bills, p. 229; Chitty on Bills, 174; Byles, 159; i:diev. East India Companij, 2 Biut. 1227; 1 Bl. R, 295. (-) Achcson V. Foioitain, 1 Sir. Ecp. 557 ; Edie v. East India Compang, supra; Story, 230; Chitty, 174; Byles, 151, 161. («) Story, 231; Chitty, 174; Ediey. East India Company, supra. 300 -^ DISCOUNTS. indorsement was made to the restricted indorsee as the agent or trustee of the indorser, or of some third party named by him, as " Pay to A. B. or order for my use," "Pay to A. B. for my account," " Pay to A. B. for the use of C. D. :" such indorsement, though it would restrain the negotiahiHty of the bill, so far as to prevent the indorsee fi'om indorsing or transferring it so as to convey any beneficial interest in the bill, would not, it would seem, necessarily restrict him from indorsing it so as to convey a right of action upon it ; but every subsequent holder would receive the money subject to the original designated appropriation thereof, and, if he voluntarily assisted or aided in any other appropriation, it would be a \\Tongful conversion, for which he woidd be responsible (/>) . A banker, therefore, discounting such a bill, does it at his peril, and is bound to see to the application of the money paid by him {h). So, where a bill of exchange was indorsed by the payee generally to A., and by him to B., in these words, " Pay to B. or his order for my use," and B. applied to his bankers to discount the bill, and the}^, without making any inquiry did so, and ajiplied the proceeds to the use of B., it was held that the indorsement was restrictive, and that the property in the bill remained in A., and that lie was eiititled to recover the amount of the bill from the bankers (f) . The words, " the within must be credited to B., value on accoimt," have been held to constitute a restrictive indorse- ment (d) ; but not to the words " value in account mth Oriental Bank" (^). Acceptances Acceptances per Procuration. — An acceptance '^per proc." pcrprocttra- -g r^^^ express notice to a person taking the bill, that tlie authority of the agent is limited, and, consequently, a (i) See Jfiirrnw v. Stuart, 8 Moore, P. C. 273. This case is contrary to the doctrine laid down in Bj-lcs and Baylcy as to this kind of restric- tive indorsement. (c) Hicjourneij v. Lloyd, 8 B. & C. G22. (d) Archer v. Bank of Enqlnnd, Doug. 638. \e) Bucldnj V. Jackson, L". R., 3 E.x. 135. AGENTS. 801 banker who discounts the bill cannot maintain an action against the principal, if the agent has exceeded his authority (/). But an acceptance in these words, " for Eiehardson & Son, Thomas Popple," is not equivalent, in mercantile law, to the form ^^ per jjroc. Richardson & Son, Thomas Popple." The fonner expression does not, like the latter, import a special and a limited authority to do a specific act, nor does it put the drawer of a bill, accepted in that form, upon discovery or inquiry, whether the agent has exceeded his authority or not (g). Indorsement per Procuration. — So an indorsement of a Indorsement bill of exchange, ^' per proc.,'' is an express intimation that ^^^/'^^^'^' the person indorsing professes to act imder an authority from some principal, and imposes upon an indorsee, or a banker discounting the bill upon the faith of such indorse- ment, the obligation of ascertaining that the person so indorsing is acting "sxTithin the limits and terms of his authority ; and, consequently, if the indorsement is wholly unauthorized by the principal, the banker "will not be en- titled to recover against him (/c). Agents. — A person who indorses a bill as agent ; though if he has no authority to do so, cannot be rendered Hable on the bill, even although the plaintiff show that he acted maid fide (i). He may, however, be made liable on (/) Staff!/ V. MlioU, 12 C, B., N. S. 373 ; 31 L. J., C. P. 2G0 ; Alexander V. Mackenzie, 6 C. B. 766. {g) 0' Evilly v. Richardson, 17 Ir. C. L. R. 74. (//) Alexander v. Mackenzie, 6 C. B. 766 ; 18 L. J., C. P. 94. In mer- cantile transactions there are two forms of indorsement of negotiable instruments by an agent: one simply "p.," "pro," "for," which expresses an authority generally; the other, "per pro," or "p. p.," which expresses an authority created by procuration or power of attornej-; and, where a bill of lading was indorsed by an agent in the first of these forms, it was held that the indorsement was not so irregular on the face of it as to render a banker who was instructed to accept the drafts of a third person on being handed a clean bill of lading of a cargo consigned to the latter liable for neglect of duty. Ulster Bank v. Synnott, 5 Ir. R., Eq. 595. [i) Wilson V. Barthrop, 2 M. k W. 863; Polhill v. Walter, 3 B. k Ad. 114. 302 DISCOUNTS. an implied warranty that he had the authority he repre- sented himself as having (/o). An agent applied to a banking company on several occasions to discount bills drawn by his principal, and at the commencement of the transactions with them informed them who the drawer and acceptors were of a bill which he applied to them to dis- count, and they agreed to discoimt it without requiring the agent's indorsement. Several subsequent discounts took place under similar circumstances ; but upon some of the bills offered, they required and obtained the agent's in- dorsement. The acceptances turned out to have been forged by the principal, of which fact the agent was wholly imaware. The agent became bankrupt, and it was held, there being nothing to show that the agent had not handed over the proceeds of the bills to the principal, or that the proceeds could be recalled, that the banking house could not prove upon the bills which the agent had not in- dorsed (/). A person receiving a bill to get discounted has no authority to deal with it otherwise than for discount, and a deposit of it along "svith other bills, with a bill broker, as a security for advances, is beyond the scope of the autho- rity, and passes no property (/«). BanJirrs^ Commission. — With regard to commission, it seems obvious, and has been expressly laid down, that a banker is as well entitled to his commission for his trouble in transacting money negotiations, as a factor, for his trouble in effecting sales ; commission is a la-wf ul charge, provided it is reasonable and usual (»), this last fact being (yt) CoUen v. Wright, 7 E. & B. 301; ToIhiU v. Walter, supra. (/) Ex parte Bird, 4 De G. & S. 273. A person wlio docs not indorse a bill may, nevertheless, be compelled to repay tlie money he has obtained on it, siioidd it turn out a forj^ery, as on a consideration tliat has failed. Jones V. Ryde, h Taunt. 488 ; I'olhill v. Walter, 3 B. & Ad. 114. (»«) Herschfeld V. Jlroini, 3 F. & F. 219. (w) Curtis V. Livcset/, cited 4 M. & S. 197; Ex parte Gwyn, 2 Deac. & C. 12 ; Wimh v. Fe>ni, 2 T. R. 02, n. bankers' commission. 303 a qnestion for the jury(o). Commission may also be charged for the trouble of obtaining the acceptance and payment of bills {p). Charging commission for collecting bills does not impose upon the bankers a liability to give notice of dishonoiu* in case the bills are not paid on presentment ( q) . (o) Masterman v. Coterie, 3 Camp. 488 ; Carstairs v. Stein, 4 M. & S. 192 ; Hammett v. Yen, 1 B. & B. 144. (jo) Bayncs v. Frii, 15 Ves. 120. (y) In the case of As/i worth v. 3Iiller, tried before Mr. Justice Mellor and a special jiuy at Manchester, 22nd March, 1865, it appeared that it was an action brought to recover from the defendant, as the public officer of the Manchester and Liverpool District Bank, the value of a bill of ex- change for 272/. 9s. M., which had been handed to them by the plaintiff for collection, and of the dishonour of which they had not given him due notice, whereby he was unable to recover against his indorsers. It appeared that the plaintiff was a cottou-waste dealer and spinner at Rochdale, and the banking company had a branch bank there with a manager. In September, 1864, the plaintiff took the bill from Fielden & Co., of Rochdale, in discharge of an account for 166^., handing them the difference. The plaintiff kept no account with the bank, but had been in the habit for years of handing them cheques for collection, for which the bank charged commission and handed him the proceeds. The bill became due on the 24th of November, 1864, and on the 18th of November the plaintiff left it with the cashier of the bank, who said he would do the business for him. On the 30th of November, the plaintiff called again at the bank, and was then informed that the bill was dis- honoiu'ed, got the bill back, and paid the bank charges — 22*. M. Upon the plaintiff, on the same day, applying to Fielden & Co., they disclaimed all liability on account of the delay, and so did the previous indorsers upon being applied to. The defence on the part of the bank was that they never gave notice of dishonour to casual customers, who were told to call on the day the bill would be returned, and that such was the custom and usage of bankers ; and, moreover, that in the present instance the plaintiff had actually been told to call on the 26th of November, and that it was his neglect that he did not call on that day. The plaintiff denied that he had been told to call either on that occasion or on any other. The jury returned a verdict for the defendant, as they were of opinion that the bank had established their case on the ground of general usage among bankers. Mr. Morse, in his Treatise on Banks and Bank- ing, makes the following pertinent observations on the subject of bankers charging conurdssion for the collection of mercantile paper: — "Some- times," he says, at page 323, " banks charge a commission for collection where the business is required to be done in distant jilaces. Sometimes they do it without charge, trusting to the indirect profits and advantages which may be expected to accrue by reason of the chance of the money being left uncalled for during a few days following its actual receipt and their consequent use of it for that time, or from the hope of attracting customers and increasing their business by offering such facihties without extra charges. These motives of self-interest, which must always be supposed to influence the bank, when it consents to collect without direct compensation, are regarded as a sufficient and valuable inducement for the undertaking to collect, and prevent the bank from availing itself of the plea that its conti-act was without consideration." With respect 304 DISCOUNTS. to the obligation of collection undei-taken by bankers, Mr. Morse, in a previous part of his work, page 322, says :—" Collection upon notes, drafts, bills of exchange, and, in short, upon every species of business paper, is a duty very commonly undertaken by banks on behalf of cus- tomers. After the collection is made the bank becomes a simple contract debtor for the amount, less the commission, if any has been charged. If the party for whom the collection was made is a regular depositor, the sum will be properly placed to his credit upon his general deposit account, unless a peculiar usage or special instructions demand some different course of dealmg. If the party has no deposit account the bank simply owes him the amount on demand." ( 305 ) CHAPTER XXXIV. BANK OF ENGLAXD. Corporation.— By tlie National Debt Act, 1870, (33 & 34 Yict. c. 71,) s. 72, the Bank of England, which was origi- nally created a corporation by the cro^vn by -vdrtue of a statute in the year 1694 («), is to continue a corporation until all stock is duly redeemed by parliament. Directors. — By 35 & 36 Yict. e. 34, s. 1, section 52 of the 8 & 9 "Will. III. c. 20 (which section relates to elections of directors of the Bank of England), shall have effect as if seven-eighths had been therein mentioned instead of two- thiixls. By sect. 2, any new or altered bye-law from time to time made by a General Court of the Corporation of the Bank of England for the execution of the act, not being repugnant to the law of England, shall be effectual mthout further confirmation or approval. Deposits and Discounts, — The Bank of England is largely engaged as a bank of deposit and of discoimt ; and in these respects nearly, if not altogether, the same rules apply to its regulations and its relations to customers as have been stated in respect of banking estabHshments generally. The Bank of England in its trading capacity is in the same position as an ordinary bank. Therefore, where a customer was in the practice of making his acceptances payable at the Bank of England, and, in a particular instance, an acceptance of his was presented at («) 5 & 6 Will. 3, c. 20, s. 19. Revised Edition of Statutes, 1871. G. X 306 BANK OF ENGLAND. a quarter after nine, and left till eleven o'clock, a.m., and then refused pajonent for want of assets, and being after- wards, at six, P.M., presented again hy a notary, was again refused payment by a person stationed by tbe bank, al- tbougli the bank, before six o'clock, bad received sufficient assets to cover tbe bill, it was considered that the bank was not liable at the suit of the acceptor for negligence in dishonoming his bill, because the second presentment took place after banking hom's {b). The Bank of England does not, as a general rule, receive deposits repayable with interest (c) . Branch Ban'ks. — The 7 Greo. IV. c. 46, s. 15, empowers the Bank of England to appoint agents to carry on their business at branch establishments in any place in England. A notice of an act of bankruptcy given to the bank in London, in time for communication to be made to the branch banks, "U'ill be sufficient to bind the bank in re- spect of transactions with the bankrupt at any of these branches id). But each branch is to be treated as a dis- tinct establishment for the pm-pose of giving notice of dis- honour' of a bill of exchange (e). By the same statute, notes or bank post bills issued at any branch are payable in coin there, as well as in London, but when issued in London, they are not payable at the branch banks [d) . Bank of Issue. — The privileges of the bank, as a bank of issue, wiU be treated of separately (/). (i) TFJiUalrr v. Bank of England, 1 C. M. & H. 741. \c) In September, 18G4, however, the bank allowed interest at the rate of 5 per cent, on a large sum of money whiih the Metropolitan Board of Works was boimd by Act of Parliament to keep at the bank, as an extra- ordinary exception to its custom. {(l) Willis V. Banlc nf England, 4 A. & E. 21. ((') Brown v. London and Korth-ircstcrn Railway Company, 4 B. & S. 337. See Trince v. Oriental Bank Corporation, L. R., 3 App. Ca. 325; Woodland v. Feare, 9 E. & B. 32.') ; Garnctt v. McKvwan, L. 11., 8 Ex. 10. ( / ) See post. Chapter XXiVII., Banks of Issue, and Chapter XXXVIII., Bank Notes. STOCK IN THE PUBLIC FUNDS. 307 Proving in Bankruptcy. — The Bank of England being a body politic and incorporate (r/), may prove in bank- ruptcy by an agent, pro\T.ded the agent, in his declaration of proof, states that he is authorized under seal to make such proof ill). For this pm-pose, the agent is usually . authorized by a power of attorney under the seal of the bank (/). Agent of the Government. — The Bank of England is the banker or agent of the Government for the management of the National Debt, and the Bank of Ireland acts in a similar capacity in regard to the public debt of Ireland. The unredeemed portion of these debts is represented by stock and terminable annuities, transferable at the Bank of England and at the Bank of Ireland, ^vith interest payable half-yearly. Stock in the Puhlic Funds. — The existing public stocks are the Consohdated Thi-ee Poimds per Centimi Annuities, the Eeduced Thi-ee Poimds per Centum Annuities, New Five Poimds per Centum Annuities, New Three Poimds per Centmn Annuities, New Three Pounds Ten Shillings per Centum Annuities, and Two Poimds Ten Shillings per Centum Annuities, which form part of the permanent, fimded, consolidated, or National Debt of the United Kingdom of England, and are transferable at the Banks of England and of Ireland. The natm-e of stock and money in the Pubhc Funds is this : stock is a chose in action ; it has no locality, except for the purposes of probate and administration ; it does not fall under the head of goods and chattels, so as to pass by a grant of bona et catalla felonum (/,•) ; it has been said neither to be a chattel, nor to {g) 5 & 6 WiU. & M. c. 20, s. 20. (/(.) The Bankruptcy Act, 1869, s. 80 (par. 7), and Bank Gen. Reg. G9. («■) Ex parte Bank of England, 1 Swanst. 19 ; Xaghr v. Mortimore, 10 Jur., N. S. 1001, 1003. (/.•) Hex- V. Capper, 5 Prico, 217. x2 308 BANK OF ENGLAKl). have any resemblance to a personal chattel (/) ; it cannot he sued for as money {m) , it does not pass imder the term " money," in a will (n) ; hut it does pass under the term " secm-ities for money," unless the expression is controlled hy the context. However, stock in the funds has been said to pass or not under the word " moneys," or the word " goods," or the word " chattels," according to the whole context of the ^dll, and either " goods," or " chattels," used simply, and without qualification, will pass it in a will (o) ; and where the testator did not bank with the Bank of England, a bequest of " all my money in the Bank of England," passed stock in the funds (p). Stock Certificates.— The National Debt Act, 1870, enables the holders of pubUc stocks in England and Ireland to convert their stock into cei*tificates to bearer, having coupons attached for the payment of the dividends ; and the 26 & 27 Yict. c. 73, is a similar enactment in favour of holders of India stock. India Stock. — The capital stock of the old East India Company was not government stock {<]), nor is the 5 per cent, stock created under the 22 & 23 Vict. c. 39, and subsequent acts, for the loans contracted in this country for the use of the Indian government (r). Both these {I) Wildman v. Wildman, 9 Vcs. 119. (»?) Nightingale v. Devismc, 2 W. Bl. 684. («) £x parte Simpson, 1 De Gex, 9 ; Goadon v. Botterill, 1 M. k K. 56 ; Willis V. Flasket, 4 Beav. 208 ; Douglas v. Congreve, 1 Keen, 410; Hotham V. Sutton, 15 Ves. 319. (o) Kendall v. Kendall, 4 Russ. 3G0. Sco Willis v. Plaslctt, 4 Beav. 208 ; I'hillips V. Kastwood, 1 LI. & Go. 291. (p) Gallini v. Noble, 3 Mcr. G91. ('/) Brown v. Brown, 4 Kay & J. 704. By 3G Vict. c. 17, provi.sion is made for the redemption or commutation of this stock, aud 3C Vict. c. 32, provides the funds for the purpose. (/•) The stock is transferable at the Bank of Enjjrlaud, and the dividends payable there by virtue of the 23 & 24 Vict. c. 102, and 24 Vict. c. 3, s. 9, and at the Bank of Ireland by virtue of tlie 25 Vict. c. 7. By 34 & 35 Vict. c. 29, dividend wan-ants may be sent by post. By 27 & 28 Vict. c. 50, a.ssignments and transfers of India stock iu tlie Bank of Ireland are valid, althoufch not accepted in writing;. CONTRACTS FOR THE SALE OF STOCK. stocks are charges ouly ou the territorial revenues of India. But trustees may invest trust moneys in these stocks without being guilty of a breach of trust, imless expressly prohibited by the terms of their trust (s). By 23 Vict. e. 5, s. 2, transfers of the tenitorial debt of India, or of the Indian government loans registered in the books of the Indian office in London, or in the Bank of England, are exempt from stamp duty. Indian government notes, or the certificates or stock issued in lieu thereof, registered in the books of the bank: or of the India office in London for the paATuent of in- terest, are to be deemed personal estate of a person dying in England, for the pui-pose of probate duty (/). Contracts for the Sale of Stock. — A contract for the sale of stock differs from a contract for the sale of a specific chattel, inasmuch as stock does not belong to the head of chattels; and, therefore, a contract for the sale of stock would be satisfied by the delivery of any stock of the description bargained for ; consequently, what is usually called a contract for sale in such a case, does not mean an actual sale, but only a contract to deliver, and such con- tract is not a contract for the sale of "goods, wares or merchandise," within the 17th section of the Statute of Frauds, so as to requii-e a memorandimi in writing ((0- The contract requires to be stamped in order to be valid ipc) . (s) 22 & 23 Vict. c. 35, s. 32 ; In re Colne Valleij Act, 29 L. J., Chanc. 33 ; In re Langford, 31 L. J., Chanc. 334. By 36 Vict. c. 32, s. 16, the capital stock created under that act for the redemption or commutation of the capital stock of the East India Company is to be deemed India stock within the 22 & 23 Vict. c. 35, s. 32, unless or until Parliament shall otherwise provide. {t) 23 Vict. c. 5, s. 1. (m) Heseltine v. Siggers, 1 Exch. 856. [x] By the Stamp Act, 1870, Sched., tit. " Contract Note," any note, memorandum or writing, commonly called a " contract note," or by what- ever name the same may be designated, for or relating to the sale or purchase of any stock or marketable secimty of the value of bl. or upwards, is subject to a penny stamp duty. By sect. 69 (1), the duty on a contract note may be denoted by an 309 310 ' BANK OF ENGLANJ), Transfer of Tmmfer of Stocl: — By the National Debt Act, 1870, stock. g^ 22, in the offices of the respective accountants-general of the Banks of England and Irehand hooks shall be kept wherein all transfers of stock shall be entered. Every entry shall be conceived in proper words for the purpose of transfer, and signed by the party making the transfer, or, if he is absent, by his attorney thereunto lawfully authorized by writing under his hand and seal, and attested by two or more credible witnesses. The person to whom a transfer is so made may, if he thinks fit, under- write his acceptance. And no other mode of transferring stock shall be good in law, except where otherwise pro- vided by act of parliament. By sect. 24, the Banks of England and Ireland before allowing any transfer of stock may, if the circumstances of the case appear to them to make it expedient, require evidence of the title of any person claiming a right to make the transfer. That evidence shall be the declaration of competent persons made under the Statutory Declarations Act, 1835, 5 & 6 Will. IV. c, 62, or of such other natm^e as the banks requii'c. The bank, however, is not boimd to accept as sufficient evidence of the death of a stocldiolder on a joint accoimt in its books such proof as would satisfy the Com-t of Chancery {>/). The stock vests, by the transfer, without acceptance {z). "Where a statute declared the stock created under it to be transferable as the act directed, and not otherwise, and enacted, that the entries of transfer shaU be signed by the adhesive stamp, -vvliich is to bo cancelled by the iiorsou by whom the noto is first executed. lij sect. G9 (2), every person who makes or executes any contract note chart,'eable with duty, and not being duly stamped, shall forfeit the sum of 201. By sect. G9 (3), no broker, agent or other person shall have any legal claim to any charge for brokerage, commission, or agency, with reference to the sale or purchase of any stock or marketable security of the value of 5/. or upwards mentioned or rofeiTcd to in any contract note, unless such note is didy stamped. (y) I'rosscr v. Dcdi/c of IJi/fflaiid, 41 L. J., Chauc. 327. (z) Hex V. Oadc, 2 Leach, C. C. 732. TRANSFER BY EXECUTORS OR ADMINISTRATORS. 311 parties making such transfers, and that any person to whom such transfer shall be made shall underwrite his acceptance thereof, and that no other method of transferring such stock shall be valid ; and a person alleging himself to be a holder of stock brought an action against the Bank of England for not paying dividends, it was held that he could not dispute the title of the transferee, on the ground that such transferee had not mider-svritten his acceptance, the claimant of the dividends having himself executed the transfer in the prescribed mode, and pocketed the price of the stock (a). If the Bank of England makes an unreasonable delay in passing a power of attorney for the transfer of stock, they are liable in damages for any loss sustained in consequence ; they are to have time to take all reasonable means for clearing up any doubt as to the authenticity of the power of attorney, which they may reasonably entertain {b). This being the case, it follows, — and it follows a fortiori, — that they are responsible in an action if they refuse to transfer, and a mandamus does not therefore go to compel them to transfer (c). Transfer by Executors or Administrators. — By the National Debt Act, 1870 {d), s. 23, the interest of a stock- holder, dying, in stock shall be transferable by his executors or administrators, notwithstanding any specific bequest. The Bank of England or of Ireland shall not be required to allow any executors or administrators to transfer any stock mitil the probate of the will of, or the letters of administration to, the deceased has or have been left wdth the bank for registration, and may require all the executors who have proved the will to join in the transfer. Although there is no specific bequest, the bank is bound to permit (ff) Foster V. Bank of England, 8 Q. B. 689. \b) Sutton V. Bank of England, 1 C. & P. 193 ; R. & M. 52. \c) Hex V. Bank of England, 2 Dougl. 524; Com. Dig. Action on the Case, A. 4. {d) 33 & 34 Vict. c. 71. survivors. 312 BANK OF ENGLAND. the executor to transfer unless it can be shown that he has assented to the legacy (c). By joint pro- By Joint Proprietors and hy Survivors. — A joint tenant prietors and £ g^^^,], canuot legally transfer his share ; for virtually, at least in the case of two joint tenants, that would amount to the power of transferring the whole {d) . Stock standing in the names of two xoersons jointly, on the death of one becomes, at law, the absolute x^roperty of the sm-vivor, and therefore the administrator of the de- ceased cannot maintain against the survivor an action to recover the deceased's share, although, if there is a trust' in favom- of a third person, the survivor may be responsible in a Com-t of Eqiiity for the disposition of the property according to the trust (^) . When stock has been pm-chased in the joint names of two persons, out of money standing to theii- joint account in the bank, it is not necessarily to be considered as hold in joint tenancy, but the origin of the money and the acts and intentions of the parties may be looked to, and a con- clusion in favour of a tenancy in common cka^vn from these circumstances (/). Two sisters, being tenants in common of estates, had money arising from the rents standing to their joint account in the bank. Part of the money was from time to time invested in the purchase of stock in their joint names, and part on mortgage, the moiigaged premises being conveyed to them as tenants in common. Each sister, by her ^^ill, affected to dispose of her share of the stock: it was held, that they were entitled to the stock as tenants in common and not as joint tenants (•) Sloman v. Bunk of England, 11 Sim. 175; Midland Railway Company V. Taylor, 8 Jur., N. S. 419, H. L. MORTGAGE OF STOCK. 315 knowledge or consent of the corporation (even tliougli affixed by their agent), and a transfer is made in conse- quence, the bank is liable unless the corporation has been guilty of negligence, or has subsequently ratified the act. In fact, it is the duty of the bank to prevent the entry of a transfer in their books until satisfied that the person who claims to be allowed to make it is duly authorized so to do. Were the law otherwise, the whole property of every stockholder would be at the mercy of the bank clerks. It is felony to forge any power of attorney for the transfer of any stock at the Bank of England or of Ire- land (s), or to forge any name, handwriting or signature, purporting to be the name, handwriting or signature of a witness attesting the execution of such power of at- torney (t) . Transfer into Fictitious Names. — If a bankrupt, for the Fictitious pm-pose of defrauding his creditors, purchases stock, of °'''™^^' which he obtains the transfer into a fictitious name, a Court of Equity will afford relief to the creditors, by ordering the Bank of England to erase the fictitious name, and insert that of the bankrupt as the transferee {ii). Forging Transfers. — It is felony to forge the transfer of any share or interest of or in any stock transferable at the Bank of England or at the Bank of Ireland {x). Personating Stockholders. — The personating of an owner of stock in the funds, or of the dividends, and thereby en- deavouring to transfer the stock or receive the dividends, is felony (y). Mortgage of Stock. — A mortgagee who has advanced Mortgcage of on the secmity of stock for a fixed period is bound, in the (.s) 24 & 25 Vict. 0. 98, s. 2. [t] Ibid. s. 4. («) Green v. Bank of England, 3 Y. & C. 722 ; 32 & 33 Vict. c. 71, s. 22. \x) 24 & 25 Vict. c. 98, s. 2. \u) Ibid. s. 3. 316 BANK OF ENGLAND. absence of express stipulation to the contrary, to retui'n the identical stock pledged at the expii-ation of the loan, and for this purpose stock is as capable of identification as any other security. If he sells the stock in pledge during the currency of the loan, he is accountable to the mortgagor for any profit made by the sale (s). Bank Boohfi. — Making false entries or altering any words or figui-es in the books of the Bank of England or of Ireland, in which the accounts of the owners of stock are kept, with intent to defraud, is felony [a). Inspection of Boohs. — The books of the Bank of Eng- land cannot be inspected by persons who have no interest in them, or who seek an inspection for pm-poses of a private nature, unconnected with the objects for which the books are kept. A fund-holder has a right to inspect and copy entries relating to the stock and its transfers in which he is inte- rested; but he has only the right as to the particular entries relating to the particular parcel of stock, and no other {b) ; and the bank is accordingly liable to furnish a list of such of their books as contain entries of stock in which the party applying is interested, and the Courts of Equity enforce this obligation (c). The bank books are, in general, not removable, on the ground of public inconvenience (c/), and they are proveable, by examined copies made under the provisions of the Act of 1879 (c). The bank books are the best evidence of the transfer of stock, but still it is not always necessary that they should (2) Langtu)! v. Walte, 37 L. J., Chanc. 345; 4 L. R., Ch. 402. {a) 24 & 25 Vict. c. 98, s. 5. [b) Foster V. Bank of England, 8 Q. B. 689. {() Ueslop V. ]iank of Emjland, 6 Sim. 192. {(I) Murtlmcr v. M'CaJlnn, G M. & W. 5S, G7, fiO ; Rex v. Gordon, Dougl. 572, II. ; J>"ris v. Hank of Knglatid, 2 Biup. 404. (/)'yce Bankers' Books Evidence Act, 1879 (42 A: 43 Vict. c. 11), printed in Appendi.x. The effect of sect. 3 of tlie Atrt is to make copies of entries in the Looks of a banker evidence ap^ainst any one. Jlurdnuj v. Jl'Utianis, 14 Ch. D. 197. TRUSTS. be produced to afford this proof; the signature of the alleged transferee may be proved by a person who knew the party's handwiiting, and had inspected the signature of acceptance in the books (./'). Trusts. — The Bank of England does not take notice of trusts ; they are not to look beyond the legal title ; there- fore they cannot prevent an executor selling out or trans- ferring stock into his own name {g), and are not charge- able, if he transfers the stock to persons not entitled under the will {/i). There is a case decided in relation to this point a good many years ago, in which the facts were these : — A transfer was made of stock at the bank in the name of a wife by her husband, which stock, it Avas suspected, she held by virtue of a trust to her separate use. A memo- randum was made by the bank on the transfer, indicating that a flaw w^as suspected in the title. This, it was held, must not be allowed ; it was further held, that no secret trust, as against the party having an open legal title, will affect the bank. Lord Mansfield added, " I won't say a word against the holder of the stock having his action against the bank, for disparaging his title " (/). The fact is, if the bank looked beyond the legal title, for instance if they took notice of the trusts of a will, they must be held to take notice throughout, and therefore they would have to stand the consequences of resulting trusts, and such trusts as would be raised by a Court of Equity (k) ; in fact, if so, they would be charged with all the trusts in the kingdom (/). In reality, there is nothing in the statutes relating to the (/) Mortimer v. Bl'Callau, 6 M. & W. 08. [f/) Bank of Enylaml v. I'arsons, 5 Ves. 665. [h] Ilartya v. Bank of England, 3 Ves. 55. ((') Ladij Mayo'' s case, Lofft, 65. {k) Bank of England \. Parsons, 5 Ves. 669. (0 3 Ves. 58. 317 318 BANK OF ENGLAND. establisliment or regulation of the bank, which makes them ■ trustees of the public funds for any person ; if they volun- tarily enter in their books a trustee's account, they may, under certain circumstances, become liable for the perform- ance of the trusts ; they stand much in the same relation to stock, that a depositary of goods does to the goods ; if they have distinct notice that the person in whose name the stocks stand is not the real owner, or holds subject to a claim, and they, nevertheless, allow the transfer to be made, there they may be, but then only, responsible for the transfer {m) . It is common, in order to avoid the frequent recurrence of the necessity of appointing fresh trustees — at least it is not uncommon when the stock is considerable — to appoint, in the first instance, four trustees ; for then, on the decease of one, or even of a second, of the trustees, there still re- mains the check which one mind may be supposed to hav^ over a tendency to dishonesty in the other. In general, it is a rule with the Bank of England, not to allow a fund to be transferred into the names of more than four joint owners. Distringas iipou. — A claimant to an interest in stock transferable at the Bank of England, standing in the name or names of any person or persons, or body politic or cor- porate, in the bank books, who was desirous of restraining the transfer of such stock, or the payment of the dividends thereof, formerly issued a di.striiir/as, prepared by his soli- citor, and sealed by the clerk of records and writs, in the form prescribed by the 5 Vict. c. 5, s. 5 (»). The writ was then served on the Bank of England, together with a notice not to permit the transfer, or not to pay the divi- dends, as the case might be. (m) Hiimbcntonc v. Chase, 2 Y. & C. 209. (w) Fonri of Affidavit, Order XXVIT., Gon. Ordors, IT. T. 18G0; 29 L. J., Chauc. 20. Sco Jn re Marquis of Jlirfford, 1 Hare, 58-1 ; iratts v. jrail-i, 40 L. J., Chanc. 388. DISTRINGAS UPON. 319 Now, however, by the Rules of the Supreme Court, 1880, it is provided that no distringas shall thenceforth he issued under the ahove act, and in place thereof it is enacted (o) : — By Rule 23, that any person claiming to be interested in any stock Filing and standing in tho books of a companj^ may, on making an affidavit ^^Y*^^.^* in or to the effect of tbo form B. 28 in tko schedule thereto, and on notice as to filing the same in the central office with a notice in or to the effect stock. of the form B. 23 in the same schedule annexed thereto, and on ^ , • ^^^ * I- r. 4. procuring an office copy of the affidavit and a duplicate of the filed notice authenticated by the seal of the central office, serve the office copy and duplicate notice on the comi^any. By Rule 2-1, there shall be appended to the affidavit a note stating Affidavit to the person on whose behalf it is filed, and to what address notices ^^^*° address (if anj') for that person are to be sent. All such notices shall be Qj.^ XL VI deemed to have been duly sent if sent through the post by a pre- r. 5. paid letter directed to that person at the address so stated or at any such substituted address as thereinafter mentioned, whether the person to whom the notice is sent is living or not. By Eule 25, the address so stated may, from time to time, be Alteration of altered by the person by or on whose behalf the affidavit is filed, '?-'^Y*^f^- but all notices sent by post before the alteration to the address j.. 6." originally given or for the time being substituted therefor shall not bo affected by any subsequent alteration. Any such alteration of address may be made by service of a memorandum thereof on the company in the manner required for service of a notice under this order. By Eule 26, the service of the office copy of the affidavit and of Service of the duplicate of the filed notice shall for the period of five years amdavit and ,-, , ,. ••.,,■. / n ii i- • -, filed notice to from tho day oi service, but not longer (unless tho notice is renewed i^^ve same as thereafter mentioned), have tho same force and effect as if these effect as wTit rules had not been made and a writ of distringas in respect of the o -d '^XTVT^' stock had been duly issued under the act 5 Vict. c.5,s.5. r_7. By Eule 27, the original notice may be kept on foot from time to Renewal of time by a notice of renewal signed by the person by whom or on notice. whose behalf the original notice was given, and served on tho ^^'^- ^^^^I- company, provided the notice of renewal, if only ono is given, is served before the expiration of five years from the day on which the original notice was served, or, if more than ono is given, then (o) Ord. XLVI. In these rules the expression "Company" includes the Governor and Company of the Bank of England and any other public company, whether incorporated or not, to which 5 Vict. c. 5, s. 5, applies; and the expression ' ' stock ' ' includes shares, securities, and money. 320 BANK OF ENGLAND. Withdrawal or discharge of notice. Ord. XLVI. r. 9. Effect of request for transfer of stock or I^ayment of di\ddend. Ord. XLVI. r. 10. Amendment of description of stock. Ord. XLVI r. 11. before the expiration of five years from the day on which the last previous notice of renewal was served. Each such notice of renewal shall have the effect of continuing and keeping on foot the original notice for the period of five years from the day on which the first notice of renewal or the last previous notice of renewal (as the case may be) was served. By Eulo 28, a notice filed under this order may at any time be withdrawn by the person by whom or on whose behalf it was given on a written request signed by him, or its operation may be made to cease by an order to be obtained by motion on notice or by peti- tion duly served by any other person claiming to be interested in the stock sought to be affected by the notice. By Eulo 29, if, whilst a notice filed under this order continues in force, the company on whom it is served receive from the person in whose name the stock specified in the notice is standing, or from some person acting on his behalf or representing him, a request to permit the stock to be transferred or to pay the dividends thereon, the company shall not by force or in consequence of the service or of any renewal of the notice, be authorized, without the order of the court, to refuse to permit the transfer to be made or to withhold the payment of the dividends for more than eight days after the date of the request. By Eule 30, if the person who files a notice under this order desires to correct the description of the stock referred to in the filed notice he may file an amended notice and serve on the company a duplicate thereof sealed with the seal of the central office, and in that case the service of the notice shall be deemed to have been made on the day on which the amended duplicate is so served. Dividends.— Bj the National Debt Act, 1870, s. 25, the Banks of England and Ireland may close their books for the transfer of stock on any day in the month next prece- ding that in which the dividends on tliat stock are payable, but so that the books be not at any time so closed for more than fifteen days. The persons who on the day of such closing are inscribed as stockliolders shall, as between them and their transferees of stock, be entitled to the then cur- rent half-year's dividend thereon. By sect. 17, tlie Bank of England and Ireland before allowing the receipt of any dividend on any stock may, if the circimistance of ihc case a])pcar to tliem to make it TRANSMISSION OF WARRANTS BY POST. expedient, requii-e evidence of the title of any person claiming a right to receive the dividend. That evidence shall be the declaration of competent persons mider the ♦Statutory Declarations Act, 1835 (u), or of such other natm-e as the banhs reqiiii-e. By sect. 19, the banks are also authorized to pay the dividends under the power of attorney of one joint owner, where the other is either an infant or a person of unsound mind. Action to recover. — In an action, however, against the bank for the nonpajnnent of dividends, the plaintiff must allege and prove that the money to discharge the divi- dends has been received by the bank from the govern- ment, for the bank has no more than the care of the stock ; and it must be shown that they have funds, before they can be proved to have committed a breach of duty in not papng them over to the plaintiff (o) . Forging Poicers of Attorney to receive. — Forging a power of attorney for the receipt of any dividend is a felony (;;). Transmission of Warrants bi/Post. — By the National Debt Act, 1870 (q), s. 20, the Banks of England and Ireland may, from time to time, with the sanction of the Treasmy, make arrangements for the payment of dividends on stock by sending the wan-ants through the post, and every waiTant so sent by post shall be deemed a cheque on the Bank of England or of Ireland (r). By sect. 21, where a stock- holder desii'es to have liis dividend warrants sent to him by post, he must make a request for that purpose to the Bank of England or of Ireland, in wiiting signed by him, («) 5 & 6 WiU. 4, c. 62, ss. 2—5. (o) Bank of England y. Davis, 5 B. & C. 185. Ip) 24 & 25 Vict. c. 98, s. 4. [q) 33 & 34 Vict. c. 71. (/■) So by 36 & 37 Vict. c. 44, where goTermnent annuities for life or years are payable by the Commissioners for the Reduction of the National Debt, the warrants may be sent by post at the request of the annuitants. G. Y 321 322 BANK OF ENGLAND. in a form approved by the bank and the Treasury, and must give to the bank an address which must be in the United Kingdom, or the Channel Islands or the Isle of Man, to which the letters containing the warrants are from time to time to be sent. The posting by the bank of a letter containing the dividend warrant, addressed to the stockholder at his request, will be equivalent as respects the liability of the bank to the delivery of the w^rant to the stockholder himself. Making out False Dividend Warrants. — It is felony for any clerk, officer or servant of the Bank of England or of Ireland, to make out or deliver any dividend warrant for a greater or less amount than the person on whose behalf the warrant is made out is entitled to, with intent to defraud (r). Unclaimed Unclaimed Dividends. — By the National Debt Act, div-idends. 2870 (.s), s. 51, all stock, no dividend whereon is claimed for ten years before the last day on which a dividend thereon becomes payable (except where payment of divi- dend has been restrained by a Court of Equity), shall be transferred in the books of the Bank of England or of Ireland (as the case may be) to the National Debt Com- missioners. By sect. 55, the governor, or deputy governor of the Bank of England or Ireland, may direct the ac- countant-general or deputy accountant-general or secretary or deputy or assistant secretary of the bank to re-transfer any stock transferred to any person showing his right thereto to the satisfaction of the governor or deputy governor, and to pay tlio dividends due thereon, as if the same had not been transferred or paid to the National Debt Commissioners. But in case the governor or deputy governor is not satisfied of the right of any person claiming (?•) 24 & 2.) Vict. c. 98, 8. 6. (a) 33 & 34 Vict. 0. 71. This act repeals the 56 Geo. 3, c. CO, the former statute on this subject. BANK STOCK. to be entitled to an}^ sucli stock or dividends, tlie claimant may, by petition in a summary way, state and Terify liis claim to the Com't of Chancery. Under this statute it is not necessary for the claimant to show himself to be beneficially interested in the stock ; to prove a legal claim to it is sufficient {f) . But then it is not a matter of course, where there is anj'ihing to indicate the party not to be beneficially entitled, to order a re- transfer upon the claimant making out a legal title, such as a transfer would have been made to him upon, if the ten years had not elapsed ; thus, if stock stands in the names of two persons, one of whom smwives the other up- wards of ten years, but has not, duiing that time, claimed any di\'idends, the Court refuses, upon petition of the sur^dvor's widow and personal representative, to order the stock to be re-transferred into her name, or into the names of the two deceased persons, but directs a reference to inquii'e who is entitled to the stock, with liberty to state • special circumstances («). On a re-transfer of stock, the unpaid dividends are simply payable without any accumulations arising from re-invest- ment of dividends (.r). Ba)ik Stock.— Beiove the 22 & 23 Yict. o. 35, s. 32, an investment by trustees of trust moneys in Bank of England stock, though it was practically as safe as the government funds, was not regarded by the Courts of Equity as a proper investment of trust moneys, and, upon knowledge of the fact that such an investment had been made, they would have ordered the stock to be sold out, and the pro- ceeds invested in consols. If any loss was occasioned to the trust estate by fluctuation in the prices of the bank stock, or of the government stock, between the dates when (0 In re Bigg, 1 T. & C. 245. [u) Ex parte Ram, 3 M. & 0. 25 ; In re Bishton, 27 L. J., Chanc. 168 ; ITiDitY. Pcaeock, 6 Hare, 361. (.r) In re Ashmead, L. E,., 8 Ch. 113 ; 42 L. J., Chanc. 314. See also on this subject I» re Arldand, 26 L. T. 418. y2 323 324 HANK OF ENGLAND, the investment was made, and tlie re-investing in consols, the trustee had to make good the difference (y). But now a trustee, or an executor, or an administrator, unless he is expressly forbidden by the instrument creating his trust, may invest any trust fund in the stock of the Bank of England or of Ireland, and the trustee so doing will not be liable on that account as for a breach of trust, if the in- vestment is in other respects reasonable and proper (s). Upon a loss sustained by a depreciation in the price of consols, a trustee upon a proper investment will not be liable for the difference {a) . Bonuses. Bonuses. — An extraordinary division of a sum of money among the proprietors of bank stock, beyond the ordinary dividend, by way of bonus, is considered as an accretion to the capital ; therefore, a tenant for life of the bank stock, in respect of wliich the division is made, is not entitled to .the bonus, but only to the dividends upon it considered as capital, as they accrued during his life {h) ; it makes no difference that the division was in money, and not in stock ; that did not cause it to be considered as a profit arising and payable in the time of the tenant for life, and to which, therefore, he was entitled, inasmuch as all the profits, ordinary and extraordinary, arose in the j^ame way (h). Stock stood in the names of trustees under a mamage settlement, to pay the dividends Avith any bonuses tliat might from time to time be allowed, and when the same should be payable, to a husband and his wdfe and the survivor for life : it was held, that the husband was abso- lutely entitled to a bonus declared during his life estate (c). He did not take the bonus, but allowed it to be added to (v) llaneon v. Ailoi, 2 Dick. 498 ; Clough v. Bond, 3 M. & C. 490. (;) 22 & 23 Vict. c. 35, 8. 32, aud 23 & 24 Vict. c. 38, s. 12. \a) I'vut V. Crcnie, 2 Dick. 499, n. \b) lirandcr v Bmmlcr, 4 Ves. 802; 14 Vcs. 70, 78; 13 Trico, 774; Paria v. Taris, 10 Vcs. 185; Cliv)tun v. Gir.s/iiiiii, 10 Vcs. 290; //'(« v. tStecre, 13 Ves. 3G3. See lie Ilopl'hi^' Trust, 22 W. R. 087. (r) In >r Mitf'iiii, I Jur., N. S. 1077. STAMPS ON BILLS AND NOTES. 325 the capital and received the dividends on the whole. On his death, the wife as survivor was entitled to receive the bonus {(i). Bequests. — When a person is possessed of money in consols and other government securities, and also of hank stock, and bequeaths " all his fortune standing in the funds," the bank stock does not pass. The reason is, that the words "the funds" have received an interpretation to mean " the public funds," as appears from the Stamp Acts, which have always made a distinction between bank stock and the government funds (e) . On the other hand, when a person not having either at the date of his will or at the time of his death any bank stock, but having some Three and a quarter per Cent. Annuities, there being no other stock standing in his name, bequeaths " all my bank stock," the annuities mil pass (/). Stamps 0)1 Conveyance or Transfer of Bank StoeJx. — By the Stamp Act, 1870, Schedule, the conveyance or transfer, whether on sale or otherwise of any stock of the Bank of England is chargeable with the duty of 7s. 9d. Stamjys on Bills and Notes. — The promissory notes, bills of exchange and bank post bills of the bank are exempt from stamp duty {rj), and are re-issuable after payment as often as the bank thinks fit. But the j)ractice of the bank is never to re-issue a note or a bill which it has once paid. {d) In re ilittam, 4 Jur., N. S. 1077. \e) Grainricr v. Slingsby, 25 L. J., Chanc. 573; 8 De G., Mac. & G. 385; S. C. 7 H. L. Cas. 273. (/) Ihal-e V. Marfw, 26 L. J., Chanc. 786. {(j) 55 Geo. 3, c. 184, s. 20; 7 & 8 Vict. c. 32, s. 7. ( 326 ) CHAPTER XXXV. BANK OF IRELAND AND BANK OF SCOTLAND. The Bank of Ireland was establislied by a royal charter in pursuance of an act of tlie Irish parliament (a), and possesses similar privileges to the hank of England, and is governed by similar principles. The restriction in that act against the bank lending or advancing money to be secnred by mortgage or sale of lands, tenements, or here- ditaments, redeemable, has been repealed by 23 & 24 Yict. c. 31. The 35 Yict. c. 5 alters the charter as to the number and election of the directors. The 8 & 9 Yict. c. 37 continues the bank's privileges imtil determined by notice in the Dublin Gazette, and re- gulates the issue of bank notes or bills payable on demand. The notes, bank post bills and bank bills of exchange of the bank may be signed by machinery (b). The Bank of Scotland, by the name of the governor and company of the Bank of Scotland, was established by an act of the Scotch parliament in 1695. The 1-4 Geo. III. c. 32, recognizes its establishment and continues the act in force. The commissioners of the treasmy may com- pound with the Bank of Scotland, the Royal Bank of Scotland, the British Linen Company, and other Scotch banks, for the stamp duty payable on their notes and bills of exchange (c). The 8 & 9 Yict. c. 38, regulates the issue of bank notes in Scotland. (ft) 21 & 22 Geo. 3, c. IG (Irisli). {b) 27 & 28 Vict. c. 78. (c) 10 & 17 Vict. c. C3, 8. 7. By 3G Sc 37 Vict. c. ccvii, s. 2, tlie Royal Bank of Scotland may establish a branch in London, but this power shall not authorize it to issue its own bank notes elsewhere than in Scotland. ( 327 ) CHAPTER XXXVI. CRIMINAL LIABILITY OF OFPICERS AND SERVANTS OF THE BANK OF ENGLAND AND OF THE BANK OF IRELAND. An officer or servant of the Bank of England, or of Ire- land, intrusted -uath any bond, deed, note, bill, dividend warrant, or warrant for tlie payment of any annuity or interest, or money, or with any security, money, or other effects of or belonging to the Bank of England or of Ire- land, or having any bond, deed, note, bill, dividend war- rant, or warrant for the payment of any annuity or interest, or money, or any security or other effects of any other person, body politic or corporate, lodged or deposited with the Bank of England or of Ireland, or with him as an officer or servant of the Bank of England or of Ireland, secreting, embezzling or running away with any such bond, deed, note, bill, dividend or other warrant, security, money or other effects, or any part thereof, will be guilty of felony (a), and on conviction will be Kable, at the dis- cretion of the coiu-t, to be kept in penal servitude for life, or for any term not less than five years, or to be imprisoned for any term not exceeding two years, with or without hard laboui", and with or without solitary confinement (b). (a) 24: & 25 Vict. c. 96, s. 73. (i) 27 & 28 Vict. c. 47, s. 4. ( 328 ) CHAPTER XXXYII. BANKS OF ISSUE. Bank of Emjlaml — The Bank of England is a "bank of issue, and its powers, in this respect, are defined by the 7 & 8 Yict. c. 32, commonly called the Bank Charter Act of 1844 {a). By that act the banking and issue depart- ments were separated, and the bank was authorized to issue from the issue department into the banking depart- ment notes payable on demand, to the amount of 14,000,000/., upon the credit of securities of equivalent value first being lodged in the issue department. The amount of these securities or the notes may be diminished from time to time, but cannot be increased {h) or ex- ceeded (c), " save in exchange for other Bank of England notes, or for gold coin, or for gold {d) or silver bidlion {e), purchased or received for the issue department or in ex- ((?) The act is printed in the Appendix of Statutes. {b) Sect. 5, however, provides for a limited increase of seciu-ities and notes. If a coimtry banker shall cease to issue his own notes, an order in council may empow-er the bank to increase the securities, and issue addi- tional notes, but such increase is not to exceed two-thirds of the authorized issue of such banker. In the preamble of the 21 Yict. c. I , indemnifying the bank, on the occasion of an over-issue, in 1857, the amoimt of the seciu-ities acquired and taken in the issue department is there stated to bo limited to 11,750,000/. under the provisions of the act and an order in council. The bank, by sect. 9 of the 7 & 8 Vict. c. 32, is to allow (lie public the profits of its increased circulation, which profits, by the 2'1 Vict. 0. 3, s. 4, are payable between the 6th of April and the 5th of July yearly, to the account of the comptroller of the Exchequer. (f) In 1857, thebank having- issued notes in excess of its authorized cir- culation by direction of the government in order to meet an extraordi- nary demand for discount and to avoid pressure on the reserves of the bank, the 21 Vict. c. 1, was passed to indemnify the bank, and confirm the issue. {(l) By sect. 4, Bank of England notes may be demanded at the issue de- partment in exchange for gold bullion at the rate of £3: 17s. ^d. per ounce of standard gold, but it must be melted and assayed at the expense of the parties. (c) Sect. 3 limits the amount of silver bidlion to be retained at a time by the bank iii the issue department to one-fourth of the gold coin and the bidliou in that department. OTHER BANKS OF ISSUE. change for securities acquired and taken in that depart- ment." An account of the notes in circulation and of the secu- rities in the issue department, as well of the capital stock, deposits, money and securities in the banking department, is to he transmitted weekly to the commissioners of stamps and taxes (/), and published in the Gazette. The notes of the bank payable to bearer on demand are exempt from stamp duty(f7), and may be signed by machinery instead of being written by cashiers of the bank {//). Other BanlxS of Issue. — No bank other than the Bank of England and those banks lawfully issuing such instrmnents on the 6th of May, 1844, can issue bills or notes payable on demand {i). (1.) By the 39 & 40 Geo. III. c. 28, s. 15, it was forbidden to esta- blish, any corporate bank whatever, or any bank where the number of bankers in partnership should exceed six, so as " to borrow, owe, or take up any sum or sums of money, on their bills or notes, pay- able on demand, or at any less time than six months from the borrowing thereof," during the continuance of the privileges seciired to the Bank of England, by former acts of parliament. (2.) In 1826, the 7 Geo. IV. c. 46 was passed, legalizing the formation under deeds of settlement of banking copartnerships consisting of more than six persons, provided they did not carry on business within the distance of sixty-five miles from London, and had not any of their banking establishments in London. Every member was also responsible for the payment of all bills and notes issued, and for all sums of money borrowed, owed or taken up, by the copartnership. These restrictions and conditions were imposed by the first section of the act [j). (/) By the 12 & 13 Vict. c. I, the commissioners are now called the commissioners of inland revenue. {o) 7 & 8 Vict. 0. 32, s. 7. (h) 1 Geo. 4, 0. 92, s. 3, and 16 & 17 Vict. c. 2, s. 1. (i) 7 & 8 Vict. c. 32, see post. {j) The acceptance by one of these copartnerships of a customer's hill, at less than six months' date, on accoimt of a balance in favour of the cus- tomer, was a horruwbig in point of law, within the meaning of this statute. The di-awiug of a bill, at a longer period than six months, though the acceptance was within six months of its maturity, was a violation of the 329 LiANKS OF ISSUE. (3.) By 9 Geo. IV. c. 23, s. 1, it was enacted, tliat it sliould be lawful for any person or persons carryinrj on the business of a hanher or hankers in England (except within the city of London or within three miles thereof), having first dnly obtained a licence for that purpose, and given security by bond, to issue, on unstamped paper, promissory notes for any sum of money amounting to five pounds or upwards, expressed to be payable to the bearer on demand, or to order, at any period not exceeding seven daj^s after sight ; and also to draw and issue, on unstamped j^aper, bills of exchange, ex- pressed to be payable to order, on demand, or at any period not exceeding seven days after sight, or twenty-one days after the date thereof : provided such biUs of exchange be drawn upon a person or persons carrying on the business of a banker or bankers in London, Westminster or the borough of Southwark ; or provided such bills of exchange be drawn by any banker or bankers at a town or place where he or they shall be duly licensed to issue unstamped notes and bills, under the authority of this act, upon himself or themselves, or his or their copartner or copartners, pay- able at any other town or place where such banker or bankers shall also be duly licensed to issue such notes and bills as aforesaid. (4.) But by 3 & 4 Will. IV. c. 98, s. 2, it was enacted, that banks consisting of more than six persons should not have the power to issue notes payable on demand in London or within sixty-five miles thereof; but were permitted, by section 3, to carry on the business of banking within the above limits, ])vo- vided they did not issue biUs or notes at less than six months' date (y ).. (5.) By sect. 10 of 7 & 8 Vict. c. 32, as above stated, it is enacted that no person, other than a banker, who, on the 6th of May, 1844, was lawfully issuing his own bank notes, shall make or issiie bank notes in any part of the United Kingdom. And by sect. 11, after the 19th of July, 1844, it shall not be lawful for any banker to draw, accept, make or issue, in England or AVales, provisions of the statute, and no person, who was privy to it, could enforce the iiccoptauce {iSuoih v. JJank of EngUuul, G Bing. N. C. 415). So, wlioro a London joint stock bank, coiisistiug of more than six persons, agi'eed with a Canadian bank tliat the manager of the London bank should accept bills drawn by the Canadian bank, i)ayable at a date earlier than six months, and the London bank should provide funds for meeting them, the House of Lords hold that the acceptance of such bills was uulawfid, and an infringement of the privileges of the Bank of England {I'crr'mg v. Bitnston, 11. & M. 42G). {j) Under this section, it was held that a paiincrship consisting of more than six persons, and within sixty-live miles of London, could not accept a bill of less than six months' date di-awn by a customer upon them {Bank of Eixjlandw. Anderson, 9 Bing. N. C. ijS!)). WEEKLY RETURNS. 331, any bill of cxchango or promissorj' note, or engagement for tlio pay- ment of money, payable to bearer on demand, or to borrow, owe or take up, in England or Wales, any sums or simi of money on tbo bills or notes of such banker payable to bearer on demand, save and except tbat it shall be lawful for any banker, who was on the 6th of May, 1 8-44, carrying on the business of a banker in England or "Wales, and was then lawfully issuing, in England or Wales, his own bank notes under the authority' of a licence to that effect, to continue to issue such notes to the extent and under the conditions hereinafter mentioned, but not further or otherwise ; and the right of any com- pany or partnership to continue to issue such notes shall not be in any manner prejudiced or affected by any change which may here- after take i)lace in the personal composition of such company or partnership, either by the transfer of any shares or share therein, or by the admission of any new partner or member thereto, or by the retirement of anj^ present partner or member therefrom : pro- vided always, that it shall not be lawful for any company or part- nership, now consisting of only six or less than six persons to issue bank notes at any time after the number of partners therein shall exceed six in the whole. On the death of any of tae members of a firm, the privilege of issuing notes continues to the surviving members (A-). And by sect. 26, any society or company or any per- sons in partnership, though exceeding six in number, and carrying on business in London, or within sixty-five miles thereof, may di-aw, accept or indorse bills of exchange, not heing payable to hearer on demand. The 3 & -i Will. 4, c. 98, s. 3, is therefore repealed in respect of this restriction (/). A banker, who becomes bankrupt, or ceases to carry on his biisi- ness, or discontinues to issue his own notes, is prohibited from recommencing or resuming the issue (m). WeeMu Returns. — By 4 & 5 Yict. c. 50, s. 1, all bankers in England, Scotland and Ireland, with the exception of the Bank of England, issuing notes payable on demand are to keep accounts of the amount of notes in circulation at the close of each week, and to make verified returns thereof every four weeks, under a penalty of 50/. By sect. 3, from these accounts and the accounts which the Bank of England is bound to render, the amount of these (/.•) Smith V. Everett, 27 Beav. 446; 29 L. J., Chanc. 23G. (/) A .summary of the above acts will be fouud in the Chapter on Joint-Stock Banks. {m) 7 & 8 Vict. c. 32, s. 12. BANKS OF ISSUE. notes in circulation in the United Kingdom every four weeks is ascertained. Monthlij Averages. — Any excess, above the limited monthly average circulation, is prohibited by 7 & 8 Viet, c. 32, s. 17, under the forfeitui-e of a sum equal to the amount in excess of the authorized circulation. By sect. 18, banks of issue are to render in a given form weekly accounts to the Inland Revenue of the amount of their notes in circulation under a penalty of 50/. ; and by sect. 19, a mode of ascertaining the average amount of bank notes in circulation is prescribed ; and by sect. 15, the London Gazette is made conclusive e\idence in all Com'ts of the amount of bank notes which the banker named in the certificate of the commissioners is by law authorized to issue and to have in circulation. The commissioners (by sect. 20) are empowered (with the consent of the Lords of the Treasmy), to examine, copy or make extracts from the books of all banks of issue, containing accounts of the notes in circulation, to ensure the rendering true accounts. Return of Names to the Stamp Office. — By sect. 21, every banker in England and Wales is bound under a penalty of 50/. on the 1st of January in each year, or within fifteen days afterwards, to make a rotmni to the Inland Revenue Office of his name, residence and occu- pation ; and in the case of a company or partnership, of the name, residence and occupation of every member of the company or partnership, and also the name of the fu-m under which the banker or company carries on business, together with the names of the places of tlieii' business. The 8 & 9 Vict. c. 76, s. 5, prescribes the mode of re- covering and applying the penalties. Unit in;/ of Banks of Issue. — A jiro vision is made by tlio 7 & 8 Vict. e. 32, s. 10, for the pm-pose of facilitating the bankers' licences. 333 union or amalgamation of banking establishments, as far as regards the cii'ciilation of theii" notes. By Copartnersh'qjs under 7 Geo. IV. c. 46. — Banking copartnerships established nnder this statute are entitled to issue and re-issue notes, without being stamped, upon security being given by sect. 1 6 ; but the enactment must be read in conjunction with the provisions of the 7 & 8 Vict. c. 32, s. 12, as to becoming banki^upt, and rendering accounts of their issue and circulation. On issuing bills or notes before making the retm-ns, they forfeit 500./. for each week of theii- neglect, by sect. 18. Irish and Scotch Banls. — The issue of bank notes in Ireland {n) and in Scotland (o) is governed by similar provisions and restrictions as the English banks are by the Bank Charter Act of 1844. Bankers^ Licences. — Bankers and joint-stock banks in England, Ireland and Scotland, authorized to issue bank notes, must take out annual licences, on which a duty of 30/. is payable respectively. The 55 Greo. III. c. 184, Sehed. tit. Licence {p), unrepealed by 38 & 34 Yict. c. 99, and the 24 & 25 Yict. c. 91, s. 35, regulate the grant of these licences in England and Scotland, and the 9 Geo. IV. c. 80, and 5 & G Vict. c. 82, s. 31, also unre- pealed by 33 & 34 Vict. c. 99, as to Ireland. The 9 Geo. IV. c. 23, enabled bankers in England, except within the city of London or within three miles, as ah'eady stated {q), to issue their promissory notes and to draw bills of exchange not exceeding seven days after (w) 8 & 9 Vict. c. 37. This act is in the Appendix of Stattitea. (o) 8 & 9 Vict. c. 38, -which is inserted in the Appendix of Statutes. {p) The tenns in which the duty is imposed are as follows : — " Licence to be taken out yearly by any banker or bankers, or other person or persons, who shall issue any promissory notes for money payable to the bearer on demand, and allowed to be re-issued, 30/." f//) See ante, p. 330. BANKS OF ISSUE. sight, or twenty-one days after date, on tlie condition of obtaining a licence. Thus, "by sect. 2 : — It shall be la-s\'fiil for any two or more of the commissioners of stamps to grant to all persons cai-rying on the business of bankers in England (except as aforesaid), who shall require the same, licences authorizing such persons to issue such promissory notes, and to draw and issue such bills of exchange as aforesaid, on unstamped paper ; which licences shall be and are hereby respectively charged with a stamp duty of thirty pounds for every such licence. By sect. 3, a separate licence shall be taken out in respect of every town or place where any such unstamped promissory notes or bills of exchange as aforesaid shall be issued or drawn : provided always, that no person or persons shall be obliged to take out more than four licences in all for any number of towns or places in England ; and in case any person or persons shall issue or draw such unstamped notes or bills as aforesaid, at more than four different to-R-ns or places, then, after taking out three distinct licences for three of such towns or places, such person or persons shall be entitled to have all the rest of such towns or places included in a fourth licence. By 7 & 8 Vict. c. 32, s. 22, every banker who shall be liable by law to take out a licence from the commissioners of stamps and taxes, to authorize the issuing of notes or bills, shall take out a separate and distinct licence for every town or place at which he shall, by himself or his agent, issue any notes or bills requiring such licence to autho- rize the issuing thereof, anything in any former act contained to the contrary thereof notwithstanding : pro-sided always, that no banker, who, on or before the Gth of May, 18-44, had taken out four such licences which on the said last-mentioned day were respectively in force, for the issuing of any such notes or bills, at more than four separate towns or places, shall at any time hereafter be required to take out or to have in force at one and the same time more than four such licences, to authorize the issuing of such notes or bills at all or any of the same towns or places specified in such licences in force on the 6th of May, 18-44, and at which towns or places respectively such bankers had on or before the said last-mentioned day issued such notes or bills in pursuance of such licences or any of them respec- tively. By 9 Geo. IV. c. 23, s. 4, every licence granted under the authority of that act shall specify all the particulars required by law to be spe- cified in licences to be taken out by persons issuing promissory notes, payable to bearer on demand, and allowed to bo re-issued ; and every such licence which shall be granted between the lOth of October and the nth of November in any year shall bo dated on the 11th of STAMP DUTIES ON TWSK NOTES. 835 October, and every such licence wHcli shall be granted at any other time shall be dated on the day on which the same shall be granted ; and every such licence shall (notwithstanding any alteration which may take place in any copartnership of persons to whom the same shall be granted) have effect and continue in force from the day of the date thereof, until the 10th of October then next following, both inclusive, and no longer. Joint Stock Banlis' Licences. — The 24 & 25 Yiet. c. 91, s. 35, enacts, that, where a company or copartnership con- sists of more than six persons, it shall be sufficient to specify in the licence or certificate the names and places of ahode of any six or more of such persons who may he presented to the commissioners, and to grant the licence or certificate to them as and for the whole of the company or copartner- ship, or otherwise to specify only the name or style of the company or copartnership, and to grant the licence or cer- tificate to such company, in and hy the said name or style, as the commissioners may think fit ; and such licence and certificate are to he as good and available as if the names and places of abode of all the members of the company had been specified therein, and the licence had been granted to them. Stamp Duties on Bank Notes. — The Stamp Act, 1870, imposes or rather re-enacts the duty payable on bank notes, which are issuable and re-issuable by licensed bankers (r). {>■) In the Schedule, which by sect. 6 (1) is made a part of the act, as follows : — £ s. d. For money not exceeding 1? 5 Exceeding \I. and not exceeding 21 10 ,, 21. „ bl 13 ,, bl. ,, 10/ 1 9 „ 10/. „ 201 2 ,, 20/. ,, 30/ 3 „ 30/. ,, 50/ 5 ,, 50?. „ 100/ 08 6 By sect. 45, the term "banker" means and inchides any corporation, society, partnership and persons, and eveiy individtial person canying on the business of banking in the United Kingdom. The term ' ' bank note ' ' means and includes — (1.) Any bill of exchange or promissoiy note issued by any banker, 336 BANKS OF ISSUE. Stamped Bank Notes. — Licensed bankers are prohibited, by 9 Greo. IV. c. 23, s. 6, from issuing their promissory notes for payment of money to the bearer on demand on stamped paper. Secuntij on Issue of Unstamped Bank Notes. — Bankers licensed to issue their unstamped paper are required, by 9 Geo. IV. c. 23, s. 7, to give secmity by bond to the crown, and by sects. 10 and 11 provisions are made to meet changes in partnership in banks, and requiiing fresh securities in such cases, and enforcing the renewal of the bonds. Composition in lieu of Stamp Duties. — By 9 Geo. IV. c. 23, s. 7, and 17 & 18 Vict. c. 13, s. 12, country and other bankers in England, authorized to issue promissory notes and bills of exchange, may compound for the stamp duties payable on their notes and bills ; and thereupon they may issue and re-issue their notes on unstamped paper (s). The 5 & 6 Vict. c. 82, s. 2, extends this privilege to bankers in Ireland in respect of their notes («). The Commis- other than the Governor and Company of the Bank of England, for the payment of money, not exceeding 100^., to the bearer on demand : (2.) Any bill of exchange or promissory note so issued which entitles or is intended to entitle the bearer or holder thereof, withovit indorsement, or without any fui-ther or other indorsement than may be thereon at the time of the issuing thereof, to the pay- ment of money not exceeding 100/. on demand, -whether the same be so expressed or not, and in -whatever form, and by whomsoever such bill or note is drawn or made. By sect. 4G, a bank note issued duly stamped, or issued unstamped by a banker duly licensed or otherwise authorized to issue unstamped bank notes, may bo from time to time re-issued without being liable to any stamp duty by reason of such re-issuing. By sect!^ 47 (1). If any banker, not being duly licensed or otherwise authorized to issue unstamped bank notes, issues, or causes or permits to be issued, any bank note not being duly stamped, he shall forfeit bOl. By sect. 47 (2). If any person receives or takes any such bank note in payment or as a security, knowing the same to have been issued mi- stamped contrary to law, ho shall forfeit 20/. (.v) The composition is as follows : — For every 100/., and also for the frnctional part of 100/., s. d. of the average amount, a value of such notes or bills in firculation during every half-year 3 6 FORM OF NOTES WITH PRINTED DATES. 337 sioners of the Treasury may compound with bankers in Scotland or elsewhere for the stamp duties on promissory notes, payable to bearer on demand, and on their bills of exchange. On the composition being entered into, the bankers are entitled to issue and re-issue their notes and draw bills on unstamped paper (t). The 27 & 28 Yict. c. 86, extended this provision to bankers in Ireland in respect of the duties payable on bank post bills of 5/. or upwards. The act was originally limited in its operation to bank post bills issued during three years from the 29th of July, 1864, but the 30 & 31 Vict. c. 89, has made the enactment perpetual. Com2)osition with Banh of England on relinquishing Issue. — The power of the Bank of England to enter into com- positions with bankers, on discontinuing the issue of their own notes, was limited to the 1st of August, 1856 (ii), but a subsequent statute has extended the period, until parlia- ment shall prohibit the issue of bank notes, or until the privileges of the bank shall be determined (x). Banking copartnerships, surrendering their right to issue their own notes, by agreement with the Bank of England, do not lose the privilege of suing and being sued in the name of their public officer (y). Form of Notes with printed Dates. — With respect to the form of bankers' notes, the 55 Geo. III. c. 184, s. 18, pro- hibited, under a penalty of 50/., a banker issuing any pro- missory note payable to bearer on demand, and liable to the stamp duties imposed by that act, with the date 2>rinted therein. But this enactment has been repealed by the 23 & 24 Vict. c. Ill, s. 19, and there is no such restriction now existing. (0 16 & 17 Vict. c. 63, s. 7. [u) 7 & 8 Vict. c. 32, ss. 23, 24. (x) 19 & 20 Vict. 0. 20. Ill) 27 & 28 Vict. c. 32. G. . Z 338 BANKS OF ISSUE. Issue of bauk notes under 5^ Issue of Bank Notes under 61. — Bank notes payable to bearer on demand for 20s. or above that sum, and less than 5/. were prohibited to be issued or re-issued by the Bank of England or any banker in England after the 5th of April, 1829 (s). In Ireland (o) and Scotland (6) such notes are legal, if issued by bankers who were entitled to issue their own bank notes prior to the year 1845, and who have obtained the certificate of the commissioners of Inland Eevenue, authorizing them to continue to do so. But these notes must not be for the payment of a fraction of a pound (c). Foreign banks of issue. Foreign Banl-s of Issue. — These banks are regulated in their issue by the laws of the countries in which they are established {d). The right to regulate the coinage and issue the paper money of a state is part of its sovereign prerogatives, recognized by the law of nations, and will be protected by our Courts, when infringed or invaded. Certain persons in this country had manufactured docu- ments purporting to be the notes of a foreign state, the Court of Chancery, at the instance of the sovereign of the {z) 7 Geo. 4, c. 6. (fl) 8 & 9 Vict. c. 37, ss. 8, 26. {b) 8 & 9 Vict. 0. 38, S9. 1, 18. ((•) 8 & 9 Vict. c. 38, s. 5 ; 8 & 9 Vict. c. 37, s. 15. Promissory notes or bills of exchange under 20s., which are negotiable or transferable, are made void and illegal by 4g Geo. 3, c. 88, s. 2 ; if payable, however, to a particular person, and not to order or to bearer, they would seem to bo valid. Notes or bills for 206'. or above that siun or less than 5/., or on which 20s. or above that siun or less than f)L remain undischarged, made, drawn or indorsed by other parties than licensed bankers, require to be in a certain form, to be payable twenty- one days after date, and to bo attested under the provisions of the 17 Geo. 3, c. 30, made perpetual by 27 Geo. 3, c. 16, as to England ; and by 8 & 9 Vict. c. 38, s. 17, as to Scotland ; and by 8 & 9 Vict. c. 37, s. 25, as to Ireland. The 9 Geo. 4, c. G5, prohibited the circulation of these notes in England, when issued in Ireland or Scotland. But the 2(') & 27 Vict. c. 105, s. I, originally suspended these restrictions as to England and Scotland for three years from the 28th of Jidy, 1863, and the 27 Vict. c. 20, as to Ireland, for two years from the 13th of May, ISGl; and those acts have been since annually renewed by the Expiring Laws Continuance Acts, see 44 & 45 Vict. c. 70. {(i) Umpcror of Amtrla v. Kossuth, 2 Giff. 628; S. C, on appeal, 30 L. J., Chanc. 090. LIMITED BANKING COMPANIES. 339 state, alleging that the introduction of such notes into his dominions would cause great detriment to his subjects, directed the manufactui-ers to deliver up the notes to be destroyed, and the plates from which they had been manufactured, and restrained such persons from manufac- tiuing such notes (6"). But the Coiu'ts will not interfere Y/ith the mode in which the sovereign of a foreign state concedes or grants the right of issuing notes to others (/). Therefore, where a bill was filed in the Court of Chan- cery against the Ottoman Bank, its directors, and the Sultan, alleging that the Sultan's government had granted to the plaintiffs the exclusive right of issuing bank notes in Turkey, and had subsequently in derogation of that grant made a similar concession to the Ottoman Bank, and prayed for a declaration of the plaintiffs' exclusive right, and an injvmction against the Ottoman Bank and its directors : it v/as held, that, inasmuch as the Court had no jimsdiction on the contract or concession as against the Sultan, it had none against the bank and its directors (/). Colonial Banhs of Issue. — Banks of issue in India and in the Colonies are regulated by local laws {g), or by charters from the Crown. Limited Banking Comjyanies. — A- banking company claiming to issue notes in the United Kingdom is not entitled to limited liability, but continues subject to un- limited liabihty in respect of such issue (/?). The negotiability and payment of bank notes will be considered in the next Chapter. (e) Ibid. (/) Gladstone v. Ottoman Bank, 1 H. & M. 505. Iff) In New South Wales, by 4 Vict. No. 13, and 5 Vict. No. 24 ; in Queensland, by 4 Vict. No. 13 ; and in Canada, by the Consolidated Statutes of Canada, cc. 54, 55. (h) The Companies Act, 1879 (42 & 43 Vict. c. 76), s. 6. z2 ( 340 ) CHAPTER XXXYIII. BANK NOTES. Most questions respecting Bank of England and country bank notes may be considered together. The right to issue bank notes and their liability to stamp duty have been stated in the last Chapter. Definition of Definition of Bank Notes. — What shall be deemed bank bank notes. ^^^^^^^ ^^^^^ ^^^ meaning of the Bank Charter Act of 1844, and the ..acts regulating the issue of bank notes in Ireland and Scotland, as regards the enactments concerning stamps, has been subsequently defined by the 17 & 18 Vict. c. 83, s. 11, as follows: — " All -bills, drafts or notes, other than notes of the Bank of England, which shall be issued by any banker, or the agent of any banker, for the pa^nnent of money to the bearer on demand ; and all bills, drafts or notes so issued which shall entitle or be intended to entitle the bearer or holder thereof, without indorsement, or without any f ui"tlier or other indorsement than may be thereon at the time of the issuing thereof, to the payment of any sum of money on demand, whether the same sliall be so expressed or not, in whatever form and by whomsoever such biUs, drafts or notes shall be dra\NTi or made, shall be deemed to be bank notes of the banker by whom or by whose agent the same shall be issued within the meaning of the 7 & 8 Vict. c. 32, and 8 & 9 Vict. cc. 38 and 37." And by sect. 12, all bills, drafts and notes which by or imder those acts arc declared or deemed to be bank notes, shall be liable to the duties and composition f(^r stamp BANK NOTES, WHEN MONEY OR CASH. 341 duties, imposed or payable imder any act or acts in force upon or in respect of promissory note's for the payment of money to the bearer on demand ; and all clauses, provi- sions, regulations, penalties and forfeitures, contained in any act or acts relating to the issuing of such notes, or for securing the stamp duties and composition',' or for prevent- ing or punishing frauds or evasions in relation thereto, shall be deemed to apply to all such bills, drafts and notes as aforesaid, and to the stamp duties and composition payable upon or in respect thereof. Bank Notes, when Money or Cas/i.—'WheYeYer country Banknotes, bank notes have once been treated' by the parties to a ^003™°'^*^^ transaction as money, no objection can afterwards be taken that they are not so per se {a) . For instance, in an action to recover money lent, the payment of certain notes having been made to the defend- ant's credit, and the fact that he had^been told the balance afterwards, were held sufficient proof that the notes were paid and had therefore been received by him {b) . So, a person to whom a smn is payable imder an agree- ment having once received it in bank notes, without com- plaint or objection, cannot afterwards allege this not to be a payment under the agreement (c). So, if the attorney of a creditor, to whom a bank bill is remitted by the debtor, writes that he will not receive it, without a sum for his costs, but does hot return it, it will amount to payment {d). A banker stands in no different position than any other person, as to his own notes ; if he sues, for instance, for goods sold, the defendant cannot support a plea of tender, by showing that he had offered the amount in the banker's (a) Gillard v. Wise, 5 B. & C. 134. \h) Gillv. Gillinrjham, 1 F. & F. 284. (r) Shipton v. Cassoii, 8 D. & R. 130. {(l) Caine v. Coiilton, 1 II. & C. 764. 342 BANK NOTES. own notes ; he must have recourse to his set-off In respect of the notes {e) . Bequests. — Bank of England notes pass as " goods and chattels," or as cash, in a will(/). Before they were made a legal tender, they passed by a bequest of " all that shall be in my house at my death" {g). Country bank notes will pass mider a similar general bequest (//). Snhject to Execution. — Bank notes, whether of the Bank of England or of private banks, may be taken in execution under a writ of fieri facias (/) ; and, consequently, they are now looked upon as goods and chattels Avithin the meaning of the statute against fraudulent conveyances (the 13 Eliz. c. 5), so that a voluntary or fraudulent gift of them is void against creditors (/.•). Tenderer Tender or Payment in. — At common law, a tender iii paymen in. j^^j^j. q£ E^giaud notes of a debt was a good tender, if th^ creditor did not object to receive notes in payment (/). The same is settled of provincial banker's notes {ni) . Country bankers are not liable to an action, if they pay their notes, upon presentment, with Bank of England notes, so long as Bank of England notes are a legal tender every^ where except by the Bank of England and its branches ; but they are liable, if they refuse to pay their own not-es other"\vise than by other country bank notes, or if they insist on paying by any other mode than in such money or cm'rency as constitutes a legal tender, in discharge, of an ordinary debt {n). it) Per Parke, B., Foster v. inUn, 12 M. & W. 201. (/) Chapman v. Jfart, 1 Ves. sen. 271. Iff) Fopliam V. Zadi/ Aijlcshurif, Ambl. GS. (/() Malioin/ V. Donovan, 14 Ir. Chane. llcp. 2G2, 388. (i) 1 & 2 Vict. c. 110, s. 12. (/•) Barrark v. M'Cii//ack, 20 L. J., Chane. 10.5. ' (/) Griffbi/ V. Oakcs, 2 B. & P. 52C ; JFrir/Iit v. lical, 3 T. Tl.(541; Anon., 1 Eq. Cas. Abr. 318, 319. ()«) Foff/hais V. Oliva; 2 C. & J. ir,. (n) G)i/)), in order to be discharged (::). As to what is due time to present for payment a banker's note, after the receipt of it, various cases have been de- cided. A. sent his servant to a town, fourteen miles from his residence, to sell cattle ; the servant sold them, and took country bank notes in payment from B. (this was about one o'clock on a Friday afternoon), and paid them over to his master (who had been from home the whole of Friday) on settling with him on Saturday evening. A. presented the notes the following Monday morning at the banking house, when it was found that the bank had stopped payment on the previous Saturday, between three and four o'clock. Under these circumstances, the Court considered that A. was entitled to recover from B. the amount of the notes, as A. had not been guilty of such laches, by not presenting the notes on Saturday morning, as made the notes his own, but intimated that the result would probably have been different if the servant had been (x) Sec Von Wort v. WoolUy, 3 B. k C. 116, 117; Tiuimis v. Gib/jliis, 21 L. J., Q. B. 405 ; IS Q. B. 722 ; Woodland v. Fear, 7 El. & Bl. olO. (,y) Per Lord Lyudhur^^t, C. B., 1 C. & M. 611, C13. (;) See Ror/ers v. Lanqford, 1 C. (!c M. 637; llcndersoit v. y{j)plt/uii, cited Id. 642. PRESENTMENT FOR PAYMENT AT BANK. 3i7 identified with the master (a). It seems if the master had himself sold the cattle, and taken the notes for them, in one miinterrupted transaction, he would at once have made his election to take the notes as payment, according to the doctrine above stated, so that, independently of the ques- tion of laches, he must, in that case, have borne the loss. The Court, if the case is duly reported, does not seem to have had present to their minds the distinction between giving bank notes, in completion of a sale, and giving them in discharge of a precedent debt. It is quite clear in general, that in case of a country bank note, made payable at the banking house, there must be a presentation for payment there, before a right of action accrues {b), and merely alleging the insolvency of the house as a reason for nonpresentment is impertinent; nor will a declaration by the banker, that he will not pay his notes, dispense with presentment (c) ; the note must be presented, and a demand of payment made at the banking house, -unless the banker has discharged the holder from presentment and demand (c) ; nor is it a sufficient excuse to say that the banker was from home, had absconded, and left no effects at the banking house {d). The stopping payment by a bank which issues notes payable on demand does not preclude the necessity of demanding payment in order that interest may become payable {e) . Therefore, where a banking company stopped payment and it was wound up, and the debts were being paid in full, it was held that interest at 5/. per cent, was payable on all promissory notes, drafts and other negotiable securities cm^rent at the time of the stoppage, not from the time of the stoppage, but from the respective times of the {a) James v. irouhUlcIi, 8 D. & R. 3. {b) Saundcrson v. Bowes, 14 East, 500 ; Blchenson v. Bowes, 16 East, 110. [c) Howe V. Boices, 5 Taunt. 30. See, howevei", ante, p. 61, and next page. [d) Sands v. Clarhe, 8 C. B. 751. {i) In re Herefordshire BankiiKj Company, 30 L. J., Chanc. 806. See ante, p. 61. 348 BANK NOTES. claims in respect thereof being sent in to the liquidators, the stoppage of the bank not operating to dispense with the necessity of making a demand (/). If bank notes are transferred in payment of a debt, and it turns out that, at the time of the transfer, though un- : known to the creditor, the bankers had already stopped payment and were insolvent, and there was no present- ment at the banking house and demand of payment, on the one hand, but, instead, the holder, within a reasonable time, gave the party handing over the notes, notice of this fact and offered to return them, which they refused, this is a sufficient foundation to entitle the transferee to recover in an action for the original consideration, for which the notes were transferred {g). The presentment, if made, must be in a reasonable time ; there must be no laches, otherwise the holder is considered as making his election thereby to take to the notes (/i). In cases between a holder of bank notes, and the party from whom he has received them (not being the makers) , it seems that to go through the form of presentment is always immaterial, after insolvency and stoppage by the bankers, provided that within a reasonable period — a period for this purpose may be reasonable, which, never- theless exceeds the time within which presentment ought to have been made — the transferee gave the other party notice that the notes were valueless, and offered to return them (?■). There is, however, a distinction between the situation of a person with whom notes are deposited, and one to whom they are paid in discharge of 'an antecedent debt, in the event of the notes being worlliloss: thus, if A. deposits notes of a country bank with^uother country bank, taking (/) In re East of England Banking (Jompanrj, 38 L. J., Clumc. 121. \g) Ilohxon v. Olhrr, 10 Q. B. 704. (/() C'amidge v. AUcnbi/, G B. & C. 373 ; Lichjicld Union v. Greene, 26 L. J., Exch. 140 ; 1 H."& N. 884. (i) I'cr Erie, J., 10 Q. B. 717 ; and gee Jl.igers v. Lnngford, 1 C. & M. G37, ■where Loi'd Lj-ndlmrst says, " It is possible, if you had returned the notes ill due time, that might have done iustead of i)reseutment." NOTICE OF DISHONOUR. the aeeountalDle receipt of the latter for the sum repre- sented by the notes, and it turns out that the notes are worthless, and the bank, as soon as they learn this, give notice to the depositor and offer to return the notes, but are refused, neither the bank nor the depositor being aware at the time of the deposit, that the bankers, who issued the notes, had then stopped payment; the depositor cannot have an action against the banking house with whom the notes were deposited, either for money lent, or money had and received (A-). Notice of Dishonour. — The same rule as to notice of dishonour of bills of exchange, and notice of dishonour of country bankers' notes, has always prevailed; the rule is, it must be given by the post which leaves on the day following that on which the holder gets information of the fact. An illustration of this position is afforded imder the fol- lowing circumstances. A., being previously indebted to B. in 500/., on a Friday, about eight or nine a.m., paid to B., at his residence, at Wantage, 490/. in notes of the Newbiu-y Bank, and 10/. in a note of the Wantage Bank, B. giving him a receipt for 500/. on the back of a promissory note, by which the loan had been secured. B. immediately sent 450/. of the notes to his bankers at Wantage, with orders to transmit the Newbmy Bank notes (which were made payable on demand at the bank of Newbmy, or at the bank of Messrs. Barnard & Co., London) to London, to buy an Exchequer bill. Wantage is distant from Newbmy about eighteen miles, and was a two days' post from one place to the other ; the post left Wantage for London at half-past five o'clock, p.m., every day, exce^it Saturdays. When B.'s messenger got to the bank, and delivered his message, with the above order, one of the partners said it {h) Timmis r. Gihbins, 21 L. J., Q. B. 403 ; 18 Q. B. 722. 34d 350 BANK NOTES. would be dangerous to send the notes to London, and, therefore, declined or refused to send them by post that evening, but offered to enclose them on the Satm-day evening, in their packet •which they usually sent in the course of their business as bankers, two or three times a week, by the coach, to London, and which packet, he said, would be in London on Monday. This was ultimately agreed to, and on the Saturday evening 450/. of Newbury Bank notes were, by the bankers at the Wantage Bank, cut in halves, and one set of halves enclosed in their packet, and transmitted the same evening to London. They usually sent theii' notes half by the coach, and half by the post, and the other set of halves was sent by post on the Sunday evening, addressed to the London corre- spondents of the Wantage Bank; these halves reached them between ten and eleven a.m. on the Monday, and the packet, containing the other halves, was delivered to them somewhat later the same day. The Newbmy Bank stopped payment the same mornuig, but their correspondents in London, Messrs. Barnard & Co., continued to pay the Newbmy notes the whole of Monday, but not afterwards, and the notes in question would have been paid if they had been presented in the com^se of Monday. When they were presented to Barnard & Co. on Tuesday they were dishonoured. Notice of the stopping of the Newbury Bank being communicated to B. on the evening of Monday, he im- mediately sent a messenger to A.'s house, who stated it to A.'s wife, A. hunself having gone to bed ; A., the same evening, said he would take the notes again, and return them to the person fi'om whom he had received them. lie afterwards refused to take back the notes. In an action against him by B., it was held that B. was entitled to recover, for that if the notes had been sent direct by the post to Newbmy, they would not have been paid as the bank had stopped on the Monday ; and that sending the half notes to London was a reasonable pre- BANKRUPTCY OF COUNTRY BANKS. 351 caution, and one which, therefore, B. had a right to adopt (/). Exchanging Notes. — It is a custom among country hankers who reside in the same district to exchange each other's notes once or twice a week, something after the same plan as that adopted at the London or county clearing house with respect to cheques. This is a great convenience to all parties, and has the same effect as the practice "with respect to the clearing house, in lessening the amount of hank notes or gold re- quired for the circulation of the district ; it also operates as a check to a redundancy of issues, hy any particular hank, within the district. The notes of such hankers as reside heyond the district, when they come into the hands of the hankers within the district, are not sent to the issuers of them, but are sent at once to London, for the purpose of being presented for payment to the bankers to whom they are addressed, or upon whom they are drawn. Bankruptcy of Country Banls. — Where one of two country banks became bankrupt, each at that moment having in their hands bank notes of the other, which together with other securities were reciprocally of nearly the same amount, and the assignee of the bankrupt house knowing this presented the notes, and obtained payment of them from the solvent bank at their London agents, who were unaware of the relative situation of the two banks, the money was held to be recoverable by the solvent bankers from the assignee, it being shown, that, on the balance of accounts between the bankers, not only was nothing owing by the solvent bank, but that there was a sum of 22/. in theii- favour (m). A country bank consisted of two partners, A. and B., (l) Williams v. SmitJi, 2 B. & A. 49G. (m) Edwards v. Newman, 1 B. & C. 418. 352 BANK NOTES. B. committed an act of baiikruptcy, and "became bankrupt, at a time when another bank in the country held bank notes of theirs, payable at the house of E. & Co., the correspondents, in London, of the country bank first re- ferred to. These notes were presented to R. & Co. for pa;^Tnent, but a part only was paid by E. & Co. out of the funds of A. and B. in their hands, A. pajdng the residue by indorsing to the country bankers a bill of exchange, given by a debtor to the firm of A. and B., for a larger amount, which they consented to take in payment, and when due it was paid to the latter bank by the acceptors. Afterwards A. committed an act of bankruptcy, and a joint commission issued, and the assignees claimed from the second country bank the proceeds of the bill, and also the sum paid on the bank notes by E. & Co., on the ground that the pai-tnership having been dissolved by the act of bankruptcy of B., of which A. had notice, he was not competent to dispose of the partnership property. The Comi held, that as A. had done no more than satisfy a claim, which was complete at the time of the bankruptcy of B., as he was warranted in doing, the action was premature, until an account had been taken in equity, and it was ascertained whether there was a balance against B. or not — that it was impossible to contend that a part- nership, when one partner commits an act of bankruptcy, must immediately shut up the house — and that A.'s. having acted in making the payment, with a knowledge of the act of bankruptcy of B., made no difference {n). Messrs. Forsters, bankers at Carlisle, had an agreement with Surtees, bankers at Newcastle-upon-Tj^ne, by which Forsters were weekly to transmit to the Newcastle Bank all the notes of the Newcastle Bank, and certain other specified banks, which they, Forsters, might have in their possession ; and the Surtees were, in exchange every week, to return to the Carlisle Bank ; and any balance on one (w) IFarvey v. Crkhett, 5 M. & S. 335; IVoodhridfjc v. Swann, 4 B. & Ad. G33 ; Morgan v. Morgan, 9 Exch. 14o ; 23 L. J., Exch. 21. BANKRUPTCY OF COUNTRY J5AXKS. 353 side or the otlier "was to be made up by that party drawing a bill on a banker in London, at twenty days, in favour of the other party. On these facts, the bank notes so sent by Forsters were held to constitute a debt from Surtees to the Carlisle Bank, which Surtees might pay by a return of bank notes imder the agreement ; but if they made no such return, or a return short of the amount due, and gave no bill for the balance, such balance was a debt against them, which was proveable uuder ^fiat against Siu-tees (o). The Newton Abbotts Bank advanced to A. 500/. upon the security of his promissory note, payable on demand, with interest, and dated 7th November, 1840. On the 17th of July, 1841, the bank stopped payment, at which time A. held bank notes, and interest notes of the bank, to the amount (with the interest due on the notes) of 581/. 5^., being more than sufficient to have paid and discharged A.'s promissory note and interest ; in fact, he had collected such notes expressly for the purpose of taking up, and pay- ing his promissory note with Newton Bank notes ; and for these, he alleged, he had given full value. The bank subsequently, without notice to A., deposited his promissory note, together with other securities, with Messrs. Williams, their correspondents in London," for the pui-pose of securing the repayment of such sums of money as they might advance to the Newton Abbotts Bank, and Williams & Co. held, on the whole, securities belonging to the Newton Abbotts Bank to a greater amount than the balance due to them from the Newton Abbotts Bank. Williams & Co. compelled A. to pay the amount of his promissory note and interest to them, and refused to allow him to set off the notes of the Newton Abbotts Bank which he held. A., in ignorance of the fact that Williams & Co. held securities to a greater amount than the balance due to them, afterwards proved under the bankruptcy for the bank notes which he held. («) Forster v. Surtees, 12 East, 605. G. A A 354 BANK NOTES. Tlie assignees of tlie Newtou Abbotts bankers paid Williams & Co. wliat was due to them, after having credit for the sum paid by A. on the promissory note, and took from Williams & Co. all the remaining securities. As A. woidd have had a right of set-off against the bankrupts, if he had continued in possession of the pro- missory note, he could not be deprived of that right by his ignorance of the state of accounts between Williams & Co., and the bankrupts, and so the Court held the assignees to be bound, on his withdrawing his proof, to repay to him the amount of his promissory note, on his giving up Newton Abbotts Bank notes to the same amount {p). Proof. Proof. — With respect to proving in bankruptcy upon the bank notes of a bankrupt, the following points have been settled. It has been questioned, whether a claim founded on notes of a coimtry banker, payable on demand, when no demand has been made, would support a fat against the banker ; but, at any rate, it seems clear, that when such notes have been given in payment of an antecedent debt, the creditor may rely on that debt, if the notes are really worthless {q) . A partner in a bank, who signs the bank notes "For A., B., &c." (stating all the names in the firm, and ap- pending his signatm'e,) cannot, on the bankruptcy of the paiinership, be liable to proof against his separate estate on such note (r). A person buying up bank notes of a firm, after its bank- ruptcy, cannot prove for them, imless he shows that the vendors of them were severally entitled to prove in respect of the notes they sold («) ; but a person owing a debt to a banking house may, even after they have actually stopped payment, buy up their bank notes, for the purpose of {p) Ex2Jarte Siaddon,?, M., D. & Do G. 2oG. \q) Simpson V. SUccs, 6 M. & S. 29.5, 312. (;•) J'Jxpario Clarke, 1 Dc Gcx, 1.53 ; 14 M. & W. 1G9. (s) Ex parte Rogers, Buck, 490; Ex parte Dcluinir, 3 Ir. Eix- li. 573. LOST NOTES. 355 setting off tlieir amoimt against his debt to them, not haying at the time notice of an act of hanki'uptcy by either of the members of the firm {s) ; but he could not set off notes, taken after he knew of an act of banki'uptcy by some of the pai-tners {t) . One person may prove, on behalf of a large number of creditors, each holding notes of the bank, under similar cu'cumstanees with himself, provided that he does not attempt to interfere in the choice of assignees, or with the ceiiificate («) ; but these modes of proof are only allowed where necessity or consent is the foundation ; Lord Eldon, in one case, required the proof to be made in the name of every one of 500 partners (.r). Lost Notes. — Bank of England notes cannot be followed by the legal owner into the hands of a bond fide holder for good consideration or value without notice ; and the holder of a Bank of England note is, prima facie, entitled to prompt payment of it, and cannot be affected by the previous fraud of any former holder in obtaining it. Pay- ment, therefore, cannot be refused, when it is presented, imless the bank can show that he was privy to the fraud (y). If A. pays a bank note to B., who pays it in discharge of a debt to C, who presents it at the Bank of England, where it is stopped on the ground that it has been frau- dulently obtained ; and then A. pays the amount to C, in consideration that his debt, due from B., had not been dis- charged, partly thi'ough his (A.'s) means ; still A. cannot recover in trover against the Bank of England (:;). The (4) Ibid. [t) Dickson V. Cass, 1 B. & Ad. 343; Ilawlcins v. Whiitcu, 10 B. & C. 217. («) Ex parte Gordon, 1 Mont. & A. 282 ; Ex parte Keys, 9 L. J,, Clianc. 11. {.«•) Ex parte Bank of England, 2 Glpi & J. 362. ((/) Solomons v. Eank of England, 13 East, 135, n. (;) Benjamin v. Bank of England, 3 Camp. 417- The bank ia in the practice of stopping the payment of a note that it has notice has been stolen, upon receiving an iudcmuity from the applicant, and this has A a2 356 BANK NOTES. stopping payment does not appear to be a duty, but is merely an accommodation rendered to the public (:;) . A money changer, clianging a Bank of England note, which had been stolen, but giving full value for it, and taking it bond fide, not having at the time knowledge that it had been stolen, was held entitled to recover from the bank the amount of the note, although he had the means of knowledge if he had taken proper care of certain notices, advertising its robbery, which had been previously delivered to him. The money changer canied on business in Paris ; he had received, some time before the transaction, a printed adver- tisement, stating the note to have been stolen, among others, from Messrs. A., in Eugland; he nevertheless changed it bond fide about the middle of the year next following that in the course of which he had received the notice : it was held that he was entitled to recover from the bank the amount of the note {a). If a bank note is lost, or is stolen out of a letter put into the post-ofRce, no action lies to recover it, or its value, at the suit of the loser, against the Postmaster-General {b). On the trial of an indictment for forgery, the loss of the bank note alleged to have been forged, is not necessarily a bar to a conviction ; thus, where a person swallowed the bank note that he was indicted for having forged, it was held, that he might have been convicted without the pro- duction of the bank note (r). Indemnity on Indemnity 0)1 Loss. — It seems, that the owner of a de' stroi/ed note could not recover in an action against the been declared to be a reasonable practice. Miller v. Bacc, 1 Burr. 4 GO ; seo 4 A. & E. 3G. (r) Ibid. [a) Raphael v. Bank of England, 2.5 L. J., C. V. 33 ; 17 C. B. 161. See also Willis V. Bank of England, 4 A. & E. 21 ; Ba)ik of Bengal v. Fagan, 7 Moore, P. C. 72. {h) Whitfeld v. Lord Le Despenccr, Cowp. 7o4. A deputy postmaster, however, who has been guilty of neglect in not properly delivering letters is liable. Jlordern v. Dallon, 1 C. & P. 181 ; Jioirning v. Goodchild, 3 Wils. 443. (c) Ano), . Bullcr, J., cited 2 Camp. 211. HALF NOTES. 357 makers ; or, at least, it may be said to bo a question not wholly without doubt {d), and he was practically obliged to have recourse to a Court of Equity in most instances. The production of the note was essential to his right to recover. But now it is enacted, that in case of any action founded on a bill of exchange or other negotiable instrument, it shall be lawful for the Court or a judge to order that the loss of such instrument shall not be set up, provided an indemnity is given to the satis- faction of the Court or judge or master against the claims of any other person upon such negotiable instru- ment {e). A bank note is a negotiable instrument within the mean- ing of this provision, and a banker, upon an indemnity being given, will be restrained from setting up the loss as a defence to an action upon the note (/) . Half Notes. — The practice of cutting notes in half for the puqiose of transmission by post is legal {g). If A. cuts a note in half and sends one half by post to B., retain- ing the other half, upon a condition which B. does not perform, the half so sent may be recovered from B {It). If half of a note was lost, it was the rule, apparently, [d) Hansard v. Robinson, 7 B. & C. 90. {e) 17 & 18 Vict. c. 125, s. 87. The benefit of this provision is con- fined to a plaintiff suing on a lost note in one of the superior Courts of common law, and does not apply to liis suing- in the County Courts or other inferior Courts, unless an order in council has extended the statute to these Coiu-ts. Xoblc v. Bank of England, 2 H. & C. 355 ; 33 L. J., Exch. 81. (/) M'BonncU v. Murray, 9 Ir. Com. Law Rep. 495. {g) Redmaipic v. Burton, 2 L. T., N. S. 321. In a notice emanating from the Post Office, of August, 1873, with reference to sending by post letters containing bank notes, the following ad\-ice is given : — " It is strongly recommended when bank notes are sent by post that they shoiild be cut in halves, and the second halves not despatched until it has been learnt that the first have been received." A person may be indicted for stealing or embezzling the halves of bank notes sent in a letter. Mix v. Mead, 4 C. & P. 535. Where a man was indicted at common law for stealing one half of a Bank of Ireland note for 20? , the indictment was held bad, the article in question not being the subject of an indictment for larceny at common law. Reg. v. Murtagh, 1 Crawford & Dix's Irish Circuit Ciiises, 355. {h) Smith V. Mundg, 29 L. J., Q. B. 172. 358 BANK NOTES. not- to allow the owner of tlie other half to recover, if he could not either produce an entire note, or prove that the other half had been actually destroyed {i) ; but the above statute will be equally applicable in this case, if indeed it would not, independently altogether, be a good defence for the bankers to show, that they had paid the amount once to the original owner of the whole note, upon his presentment of his half ; for although the holder of the lost half might show that it came to his possession bond fide, still it is said, that the taker of a half note necessarily takes it under suspicious circumstances, and he is not bound to take the half note at all ; he ought to bear the loss, it seems (/). Pdghtsof Rights of Finder. — "Where A. had picked up some bank finder. notes on the floor of B.'s shop, and handed them over to B. (who was not aware of the notes having been on the floor) to keep till the owner should appear, and B. caused advertisements to be inserted in various newspapers, but no one appeared to claim them, and three years elapsed, and (i) Mayor v. Johnson, 3 Camp. 324. {j) Sec Bayley on Bills, 379, 6th edit. Willes, J., in Rcdmaync v. Burton, 2 L. T., N. S. 321, said, " lly opinion is that bankers would be liable to pay -without an indemnity, as any person taking half a note would take it with notice." Query, which halt' of the note? Mr. Morse upon the loss of a part of a bank note says, " A piece or fraction only of a bank bill is non-negotiable. Negotiability is an attribute of the bill as a whole. When it has been severed into parts, this quality pertains to no one of them. They are not even payable ^^ro tanlo, accord- ing to the ratio of the size of the part to the Avhole. Any person who takes a piece, takes it subject to all the equities which burdened it in the hands of the party transferring it Lord Ellenborough has expressed an opinion, that the rightful o■n^ler of the whole bill, holding a half only, could not maintain his action, because the other half might come into the hands of a bona fide holder who could sue, and so two recoveries might be had. {^layor \. Johnson, 3 Camp. 321.) But, says Judge Marcy (in Hinsdale v. Bcnih of Orange, 6 Wend. 378), this implies the negotiability of the second half. If it is non-negotiable, of course it can never come into the hands of a bond fide holder, and Lord Ellen- borough's supposed difficulty can never arise ; that it is non- negotiable ' is as clear to my mind as the proposition is, tliat a part is not equal to the whole.' Certainly the impression in the coiamuuity is so genci'al to the same effect, that it would bo difficult to imagine that any person could in real honesty and good faith receive a lialf of a bank bill as money." Morso on Banking, pp. 413, 414. RIGHTS OF FINDER. then A. requested B. to return tliem, tendering the costis of the advertising, and offering an indemnity, and B. refused ; A. was held entitled to recover the notes in trover against B. (/•). It is very important, in the case of a loss of bank notes, to bear in mind the general principle : if a person finds lost property, and keeps it, having, at ihe time of finding it, no means of discovering the owner, he is not guilty of larceny, if he afterwards has means of finding the owner, and, nevertheless, retains the property to his own use {I). If the finder had seen the notes drop from the owner's pocket ; or, if the notes had had the name of the owner written upon them; or, if there had been other similar circimistances, to enable the finder to know who was the owner, at the moment he inched up the notes, that would have been different (/). Even if a finder instantly appropriates the note, animo furandi, but under such circumstances as to warrant a jury in finding, that, at the time of the apj^rojjriation, he really believed that the owner could neither find the note nor be found himself, such appropriation is not larceny (m). In the case of a note being marked, or inscribed, so that the real owner might be found, it seems, there must be proof that the finder can read these marks, &c., before he can be convicted of stealing {n), or that he got them read to him. Under the law, as formerly expounded, it was con- sidered, that the rights of the transferee might be affected by the degree of caution that he used in taking the note. But as previously stated the law has been laid down in different terms, and the Courts have shown a desire to (/.) Jlridffes V. Haickesworth, 21 L. J., Q. B. 76 ; 1-5 Jur. 1079. {I) Rcfj. V. Lixon, 25 L. J., M. C. 39. {m) Reg. V. Thurborn, 1 Den. C. C. 388, 395, 396. («) Meg. V. Preston, 2 Den. C. €. 353. See R. v. Moore, 30 L. J., M. 0. 77 ; R. V. Christopher, 28 L. J.-, M. C. 35. 359 360 BANK NOTES. retrace some of tlie steps that led to previous decisions. Even gross negligence in taking a note is not now of itself a reason why a holder for value should suffer. Thus, six Bank of England notes, for 500/. each, were stolen in November, 1852, from Brown & Co., in Liverpool, who immediately published notices of the robbery, and of the numbers of the notes, in the French and English languages, and circulated them in England, France, and other countries ; fresh notices to the same effect were pub- lished in April, 1853, one of them being left in due course, in 1853, at the place of business of one St. Paul, a money changer in Paris ; in June, 1854, a stranger entered the shop, and asked what was the exchange of the day, and produced a 500/. Bank of England note ; the file of notices, kept in the shop, was not looked at, but the stranger was asked to write his name, and to produce his passport, and tSt. Paul, finding the name so written and that in the passport to agree, gave change for the note, at the current rate of exchange, and then remitted the note to his correspondent in London, who presented it at the Bank of England and was refused pay- ment ; the bank was held bound to pay, on the ground that a person taking a negotiable instrument bond fide, and for full value, is entitled to recover on it, although it has been stolen, and ho took it negligently (;;). statute of Operation of the Statute of Limitations on Bank Notes. — limitations. The notcs of the Bank of England until paid by the bank are not, like a promissory note of a private person payable on demand, affected by the Statute of Limitations (ry), notwithstanding the notes may not be presented for pay- ment, or payment be not made for very many years after their issue, for tlioy form part of the established currency of the country. With regard to country and other bank (;;) Raphael v. Bank of England, 25 L. J., C. P. 33 ; 17 C B. IGl ; Bank of Bengal v. Macleod, 7 Moore, P. C. C. 3o. See ante, p. 3.)G. (7) Norton v. Ellam, 2 ]\r. & "W. 4G1. The statute runs from the date of the note in Huch case, altlioujrh no demand is ever made. OPERATION OF THE STATUTE OF LIMITATIONS ON. 361 notes of banks having autliority to issue them, a similar principle governs the law of their circulation and currency. By the acts regulating the issue of bank notes in Ireland (r), and in Scotland (s), it is expressly enacted, " that all bank notes shall be deemed to be in circulation from the time the same shall have been issued by any banker, or any servant or agent of such banker, until the same shall have been actually retm-ned to such banker or some servant or agent of such banker." The 7 & 8 Yict. c. 32, which regulates the issue of bank notes in England, does not contain this provision; but, as we have seen, the 17 & 18 Vict. c. 83, after specifically defining, s. 11 {(), what shall be deemed bank notes within these acts for the purposes of issue and stamping, enacts, sect. 12, " that all clauses, pro- visions, regulations, &c., contained in any act or acts, relating to the issue of such notes," &c., (and of course including the above-mentioned acts,) " shall be deemed to apply to all such notes;" and consequently it follows, as a necessary consequence, that until they are returned to, or paid, cancelled or redeemed by, the banker issuing them, mere lapse of time does not affect their circulation or value any more than it does Bank of England notes {u) . {)■) 8 & 9 Vict. c. 37, s. 17. («) 8 & 9 Vict. c. 38, s. 8. {() Ante, p. 336. These acts are in the Appendix. («) Mr. Morse, in his Treatise on Banks and Bankino-, put the non- liability of bank notes to the operation of the Statute of Limitations on a higher and ditierent principle. He says, pp. 403, 404, " A bank note is not subject to the running of the Statute of Limitations, as anj^ other simple indebtedness, or promise to pay, would be, although the bill is not distinguishable in fomi from such a promise. Its purpose of circu- lation necessarily involves this result. Every time that it is re-issued by the bank the promise is renewed, and it must usually be impossible in the case of any particiUar bill to say how often it has passed into, and again has been paid out by, the bank, or when it was last so paid out. But even if in any individual case it could be sho^Aai that the last issue was at a time so long past that the period of the statute has since elapsed, yet another objection, which goes to the root of the matter, still remains behind. For lapse of time, in the case of these instruments, affords no presumption of their having been paid. On the contrary, their existence in other hands than those of the bank, is at least prinid facie evidence of non-payment, since they are never paid, and, generally speaking, pay- ment can never be enforced upon them at law, unless they arc surren- dered to the promisor. Fiu'ther, as already shown, a new contract and 362 BANK NOTES. Forgery. Fovgcnj. — As regards forging and passing bank notes, knowing them to be forged, it is enacted by 24 & 25 Yict. c. 98, s. 12, that whosoever shall forge or alter, or shall offer, utter or dispose of, or put off, knowing the same to be forged or altered, any note, or bill of exchange, of the Bank of England, or of Ireland, or of any other body cor- porate, company, or person carrying on the business of bankers, commonly called a bank note, a bank bill of ex- change, or a bank post bill, or any indorsement on, or assignment of any bank note, bank bill of exchange, or bank post bill, with intent to defraud, shall be guilty of felony {x). A conditional uttering partakes of the criminal qualities of any other uttering ; thus, where a person gave a forged acceptance, knowing it to be so, to the manager of a bank, where he kept an account, saying he hoped this bill would satisfy the bank as a security for the balance he owed them ; this was holden a sufficient guilty uttering (y). When the authority of a banking company to draw and issue notes is recognized by statute, it is not necessary to prove it by the charter or otherwise (s). On an indictment for disposing and putting off forged bank notes, knowing them to be forged, the prosecutor a new cause of action is created by each transfer, so that the statute could beg'in to run only from the time when the last holder came into possession." In an ai-ticle in the Money Market Review for November 9, 1867, page 482, the foUo^^^ng remarks occur with reference to this sub- ject, " Country bank notes, as well as the notes of the Bank of England, are promissonj notes paijahlc to the hearer on demand, and as to them, the promise to pay may be regarded as a promise which is renewed from time to time, and evenj time the note chanrjes handx, and may tlius be subsisting for any number of years, until the note is either cancelled or paid. The Statute of Limitations must be specially i^lcadcd, and the banker or maker of the note, in pleading the statute, would have to plead that he had not made the promise at any time within the six years, and he could not prove that plea against the evidence of the note in the hands of the bearer, which became a new and distin(!t promise to him the moment he became the holder or bearer of it." [x) By the above statute the punishment on conviction is penal servi- tude for life, or for a term not exceediug five years ('27 & 28 Vict. c. 47, 8. 2), or imprisoimaent not exceeding two years, with or without hard labour, and with or without solitary confinement. (v) Jteg. v. Cooke, 8 C. & P. 582. (r) Hex V. Al'Keay, 1 Mood. C. C. 130. OBTAINING MONEY OR GOODS BY FOKGED NOTES. 363 has a right to give in evidence the fact of other forged notes having been uttered by the prisoner, for the purpose of proving his knowledge of the notes in question being forged also (a) ; and delivering to another person a forged bank note, to be put off or passed by the latter, is a " dis- posing of and putting off" within the statute {h). Purchasing or receiving forged bank notes, knowing them to be so, is felony {e). E»rj)'aving Plates for Bank Notes. — It is also felony to engrave plates for the notes of the Bank of England or of Ireland, or of bankers, or to manufacture or sell paper resembling the paper used by the Bank of England or Ireland for their notes or bills, or their watermarks, with- out authority {d). Larceny. — As regards the stealing of bank notes, where a person intercepts notes at a post office, which are in course of transmission from one branch of a banking company to another (at which they had been issued), he may be found guilty of the larceny of the notes described as money, though they were not in circulation at the time (e). Obtaining Money or Goods by means of forged or wortJtless Notes. — If a person gives forged country bank notes in payment for goods, and, when the seller objects to receive them, assures him they are good, knowing them at the time to be valueless, he is indictable for cheating and defrauding the seller of the goods; but the evidence to show the notes to be bad and worthless must be clear and full. In a case where there was some evidence to show {a) Hex V. TFylic, 1 N. R. 92. (i) Jicz V. T(i!mcr, 1 N. E,. 96. See li. v. Giles, 1 Moo. C. C. 16G. (c) 24 & 25 Vict. c. 98, s. 13. (d) lb. ss. 14—18. (V) TiCff. V. West, 26 L. J., M. 0. 6 ; -7 Cox, C. C. 183. 364 BANK NOTES. that the bank, of which the paper in question purported to be the notes, had stopped seven years previously, and the notes appeared to have been exhibited under a commission of bankruptcy against that bank, and the words importing the memorandum of exhibit had been attempted to be ob- literated, but the names of the commissioners remained on each of them, and the notes had never been presented for payment at the bank, or at Sir J. Esdaile's, in London, where they were made payable, the judges held the evi- dence insufficient to show the notes to be bad {/). So, it is not sufficient to show the bankruptcy of two out of three partners in a bank, and the shutting up of the house ; for the third being solvent, the note, if presented to him, may perhaps be paid [g). So, even where the bank had ceased business twenty years previously, and the note uttered was old, discoloured and dated many years before the time of giving it, and had been regularly can- celled and withdrawn from circulation, the makers having traced a large cross over the face of it, but the proceedings in bankruptcy against the bankers were not produced, it was held that the prisoner, though he gave a false address when asked, could not be convicted of a false pretence, as there was no evidence of his knowing the note to be cancelled and unavailable at the time he uttered it {h). A person passing a note of a country bank for 5/., pay- able on demand, as a good note, and as of the value of 5/., knowing at the time that the bank is insolvent and has stopped payment and cannot pay the note in full, may be indicted for obtaining money by false pretences (/). A person fraudulently offered a 1/. Irish bank note as a note for 5/., and obtained change as for a o/. note ; though the prosecutor could read, and the note upon its face clearly afforded the means of detecting the fraud, it M'as (/) Hex V. Flint, R. & R. 4G0. \g) Rex V. Spenser, 3 C. & P. 420. (A) lier/. V. dh)-/:, 2 Riiss. C. & M. 29G, n. (/) Ii■) 29 & 30 Vict. c. 2.'), 8. 7. (/) Can. Ord., March, 18G1, 7 Jur., N. S. 58, Tart I. Iff) 29 Vict. 0. 25, ss. 9, 10, 11, 12. I'/i) Id. s. 3. (() /(/. 8. 5. {/c) Id. 8. 17. (0 Id. s. 8. (/«) Id. s. 14. A Hijniliu' provision i.s containod in the -IS Geo. 3, c. 1, H. 18, ami in 24 Vict. c. 5, s. 12. (/() /(/. H. IG. EXCHEQUER BILLS AND BONDS. is to be given to repay tlie money, in case the bill should be afterwards produced (»). Forging or counterfeiting an exchequer bill or a coupon, or an indorsement, or tendering a forged bill in payment of a debt, is felony (o). So is the manufacturing of paper, plates or dies in imitation of those in use for exchequer bills (7;). Having the possession of such paper, plates or dies unlawfully is a misdemeanor {q). An exchequer bill or bond is the subject of larceny, as being a valuable security for the payment of money (r). The 17 & 18 Yict. c. 23, and 29 Vict. c. 25, s. 30, authorize the issue of exchequer bonds for advances made by the Bank of England to her Majesty. hi) 29 Vict. c. 25, s. 16. (o) 29 Vict. c. 25, s. 15 ; 24 & 25 Vict. c. 98, s. 8. (p) 29 Vict. c. 25, s. 20 ; 24 & 25 Vict. c. 98, s. 10. {q) 29 Vict. c. 25, 8. 21 ; 24 & 25 Vict. c. 98, s. 11. (r) 24 & 25 Vict. c. 96, s. 1. 369 G. B B ( 370 ) CIIAPTEE XLI. couroxs. Coupons are sometimes deposited with bankers, as securi- ties for advances to tlieir customers, but more frequently to collect the interest due on them. Coui^ons of foreign and colonial bonds, and railway debentures payable to bearer, are negotiable instruments, and pass by delivery {a) . The fact, that the custom to -pass fore /'(jn securities in the country where they are made by delivery is of recent origin, would not seem to make them other than negotiable instruments so long as the custom itself is established ; though in the case of inland secmities the custom must have existed by the law merchant {h) . The interest, though payable half- yearly, accrues de die in diem, and is therefore apportion- able(c). Being securities for money, they may be taken under a writ of execution, or attached in the hands of a third person. Colonial and foreign bonds or debentro-es, issued since the 3rd of June, 1862, for money raised or borrowed in this coimtry upon their security, are subject to a stamp duty of one-eighth per cent, upon the principal amount for which the bonds are respectively given (r/), except upon a bond not exceeding 25/., when the duty is 8(/. {e). Foreign or colonial bonds issued in this country, prior to this period, did not require to be stamped (/). Coupons («) Gorrjier v. MicviUc, 3 B. Sc C. 15 ; rricc v. Great TJ'cstcni Ilalhray Conipanij, 16 L. J., Exch. 87; ITazeltine v. Su/i/crs, 18 L. J., Ex. 166; Jones V. reppcrcoDw, 28 L. J., Ch. 158 ; Goodwin v. Roberts, L. R., 10 Ex. 76. {b) Crouch v. Credit Fonder of Enijland, L. R., 8 Q. JB. 374. See Eum- lallw. Met. Banlc, 2 Q. B. D. 191. (<■) In re Itorjcrs, 30 L. J., Chanc. 153. {d) Stamp Act, 1870, and 34 Vict. c. 4, s. 2; Fislier's Stamp Acts, p. 170. ((•) 31 & 32 Vict. c. 121, s. 10, since the 30th July, 1868. (/) Yrisnri v. Clement, 2 C. & P. 223. COUPONS. are, liowever, free from stamp duty {g). The liolders of consols and of India stock are enabled to convert their stock into certificates of a like amount, with coupons annexed, representing the annual dividends (//). [(j) By the Stamp Act, 1870, Sclied. tit. Bill of Eschajtge, Exemp- tions, a coupon or warrant for interest attached to and issued with any security is specially exempted from duty. (/() See ante, p. 308. 371 \^ 15 2 ( 372 ) CHAPTER XLII. REMITTANCES. As regards questions respecting the transmission of money, by the intervention of bankers, from one part of England to another, many points have been noticed, arising in cases which have been referred to principally for other purposes, and will be found in parts of the work where discounts, commission, and the relations between banks in one town, and their branches^ or correspondents in London, or elsewhere, are stated. A. & Co., in America, remitted to B. & Co., in Liver- pool, bills of exchange, for the purpose of taking up other bills of nearly the same amount which were maturing and payable at Liverpool. A. was a partner with B. at Liver- pool, but in a totally different partnership. B. had depo- sited these bills with a Liverpool bank, to meet advances which the bank had made for the firm of B. & Co., and he did not appropriate the proceeds as directed by A. & Co. : it was held, that the holders of the bills, to take up which the second set had been transmitted to England, were entitled to recover as against the bank the amount of the proceeds of such bills, the bank having had notice of such intended appropriation (a) . A merchant piu-chased from the New Orleans bank a bill drawn by them upon the bank of Liverpool, and was informed by the persons representing the New Orleans bank at the time of the purchase that the Liverpool bank had, or would have, funds of the New Orleans bank suffi- cient and applicable to meet the bill, and appropriated for the purpose. Before the bill was presented for acceptance, (a) Thniier v. Li^tn; SO L. J., Chanc. 4'27. KEMITTANCES. 373 the New Orlecaus bank stopped payment, and the Liver- pool bank declined to accept the bill on presentation, or to pay it at maturity, on the ground that though they had in their hands sufKcient funds of the New Orleans bank to meet the bill, none of such funds were specifically appro- priated to the payment of it. The course of business between tlie two banks was for the Orleans bank to remit to the Liverpool bank bills for collection, and to draw bills against the remittances, taking care to keep them always in funds to meet the bills drawn upon them : the Court held, that there was no specific appropriation of the funds of the New Orleans bank in the hands of the bank of Liverpool to meet the bill, and that the statement made to the purchaser of the bill amounted to no more than a representation of the course of business of dealing between the two banks, and did not create any equitable lien on the funds in his favour {h). Bankers at Lima established a credit agency with the general company in London, and agreed to send remit- tances within ninety days to cover drafts. The general company, being in difficulties, obtained an advance of money from the Peruvian Bank, to be repaid out of ex- pected remittances from the Lima Bank to cover bills then current, and the Peruvian Bank employed as agents to receive and to select from the expected securities the managing director of the Greneral Company and tlieir own managing director, who had been two years previously the manager of the General Company, and was cognisant of and party to the arrangement with the Lima Bank. The secmities were selected by and handed over to the Peru- vian Bank upon their arrival, and the following day the General Company stopped payment and was wound up : — Held, that the Lima Bank had no title to recover the securities from the Peruvian Bank (c). Where a debtor remits to his creditor a bank note or a (/>) Thompson v. Simpson, 39 L. J., Chanc. 857; L. R., 5 Ch. Go9. (r) J^ftiico de Lima v. yinr/lo-Fcrurian Bcuilc, L. E,., 8 Ch. D. IGO ; 38 L, T. 130. 374 REMITTANCES. bill of exchange, by a mode of conveyance dii-ected by the creditor ; or, if be transmits by the post, as being tbe usual mode of transmission, in tbe absence of orders from tbe creditor prescribing tbe mode, and tbe bill or note is lost or stolen, tbe loss falls upon tbe creditor {d). Foreign. Foreign. — Witb respect to tbe transmission of money between England and foreign countries, it may be desirable to notice some of tbe decisions, especially as regards tbe subject of tbe course of oxcbange. A., in London, drew a bill on B., in Paris, wbicb, having been negotiated tbrougb Amsterdam, was presented for acceptance to B., wbo refused to accept it, but promised tbat tbe bill should be paid at maturity. Before, bow- ever, the bill was due, the French Government prohibited the payment of any bills drawn in countries at war with France, which Great Britain was at that time, and on that account the bill was not paid by B. Under these circum- stances A. was held liable to the payees, not merely for the whole value, that he originally had received for the bill, with interest, and tbe expenses of protesting, but for tbe amount of the re-exchange, by the cii'cuitous course of Amsterdam, tbat being a consequence of the bill not having been paid (e). When a bill drawn and indorsed in England, and pay- able abroad, is dishonoured by tbe acceptor's nonpapnent, the holder is entitled as against the drawer to the amount of the re-exchange, that is, the value at the rate of ex- change on tbe day of tbe dishonour of the sum expressed on the face of the bill, in the cmTcnoy of the country where it is payable, with interest and expenses (_/'). The acceptor of a bill is, in crpiity at least, liable for re-exchange (17). (f?) IfarwicJc v. KoaJccs, Peabo, 67. (c) Mellisih\. Simeon, 2 H. Bl. 378; and see De Tastcty. Baring, 11 East, 265. (/) Suse V. Pompe, 8 C. B., N. S. 538 ; 30 L. J., C. P. 75. {g) In re General South American ComiAOi;/, 7 Ch. D. 637 ; and sec Frehn V. iiotjal Hank of Liverpool, L. II., 5 Ex. 92. ( 375 ) CHAPTER XLIII. JOINT STOCK BANKS. It now becomes necessary to state in wliat respects the legislature lias interfered, to qualify or regulate the general law with respect to bankers, in cases where a number of persons combine or unite for the purpose of carrying on a banking establishment. By the 39 & 40 Greo. III. c. 28, s. 15, as has been pre- viously stated («), it was forbidden to establish any corpo- rate bank whatever, or any bank where the number of bankers in partnership should exceed six, so as " to bon-ow, owe, or take up any sum or sums of money, on their bills or notes, payable on demand, or at any less time than sis months fi"om the boiTOwing thereof," during the con- tinuance of the privileges secured to the Bank of England, by former acts of parliament. And again by the 7 Greo. lY. c. 46, the formation under deeds of settlement of banking copartnerships consisting of more than six persons was only permitted provided they did not carry on business within the distance of sixty-five miles from London, and had not any of their banking establishments in London. Every member was also responsible for the payment of all bills and notes issued, and for all sums of money borrowed, owed or taken up, by the copartnership. These restrictions and con- ditions were imposed by the first section of the act. How these tv/o statutes became in course of time modi- fied by subsequent acts, and how far banks can at the present day issue notes payable on demand, has been abeady considered at some length {b). The following {,/) Ante, p. 320. {h) Ibid. 37G JOINT STOCK BANKS. concise summary on tlie law on the subject, however, as stated in Mr. Justice Lindley's Law of Partnership (p. 186), may be usefully cited here : — (1) The Bank of England can alone issue in London or within three miles notes payable to bearer on demand. (2) Beyond that limit such notes may be issued by bankers who were lawfully issuing them before May, 1844, under a licence, but by no other bankers ; and not, there- fore, by any banking firm of more than six persons cany- ing on the business of bankers within sixty-five miles of London. In other words there are three limits ; (a) Lon- don and thi'ee miles round, in which the Bank of England has an exclusive monopoly ; (b) the district more than three, but within sixty-five miles of London, in which the monopoly is divided between the Bank of England and banking firms of less than six members, lawfully issuing notes before May, 1844 ; (c) the district more than sixty- five miles from London, in which the monopoly is divided between the Bank of England and banking firms of six or more or less members, lawfully issuing notes before May, 1844. Rotum of Return or Account of JSfamcs of Members and Puhlic names of Officers. — Another restriction on banking partnerships is nieuiDcrs and '' . officers. imposed by the 7 Geo. IV. c. 46, sect. 4, with respect to the retm'ns such partnerships are bound to make : — Before any sucli corporation or copartncrsliiji, exceeding tlie number of six persons in England, shall begin to issue any bills or notes, or borrow, owe or take up any money on tboir bills or notes, an account or return shall be made out, according to the form con- tained in the schedule marked (A.), wherein shall be set forth tho true names, title or fii-m of such intended or existing corporation or copartnership, and also the names and places of abode of all tho members of such cor2:)oration, or of all tho partners concerned or engaged in such copartnership, as the same ros2iectively shall ap- pear on tho books of such corporation or cojiartnership, and tho name or firm of every bank or banks established or to be established by such corporation or copartnership, and also tho names and RETURN OF NAMES OF MEMUERS AND OFFICERS. 377 places of abode of two or more jiersons, being members of such corporation or cojiartncrsliip, and being resident in England, wbo sball have been appointed public officers of such corporation or copartnersbip, together with the title of office or other description of every such public officer respectively, in the name of any one of whom such corporation shall sue and bo sued, as hereinafter pro- vided (c), and also the name of every town and place where any of the bills or notes of such corporation, or coiDartnershii) shall be issued by any such corporation, or by their agent or agents ; and every such amount or return shall be delivered to the Commissioners of Stamps, at the Stamp Office in London, who shall cause the same to be filed and kept in the said Stamp Office, and an entry and registry thereof, to be made in a book or books, to be there kept for that puri^ose, by some joerson or persons to be appointed by the said commissioners in that behalf, and which book or books any l)erson or persons shall from time to time have liberty to search and inspect, on payment of the sum of one shilling for every search. This section lias become immaterial in one respect, viz., as regards that part of it which makes compliance with it a condition precedent to the power of issuing notes, be- cause, since the 19th of July, 1844, by the 7 & 8 Vict. c. 32, s. 10, no new bank can issue notes ; but it is neces- sary to retain it in other respects, because, as to them, it is still law. A retm'n or an account, omitting the words justice of tJie peace, is receivable in evidence, it being proved that the person signing the verification was, in fact, a justice of the peace [d). A certified copy of the return is evidence of the facts pertinently stated in it ; it is not necessary to prove that the affidavit verifying it was made by the public registered officer of the company (c). On the other hand, the retm-n is not the only evidence of these facts, for they may be proved aJiumlc {/). An (c) I. e., by a public officer. See post, Chapter, Public Officer. (d) Bosanquet v. Woodford, 5 Q. B. 310. (e) Bosanquet v. Woodford, 5 Q. B. 310. If it purports to be signed by the "cashier" it will siiffice. Harvey v. Scott, 11 Q. B. 92, 102. (/) Edwards v. BitcJianan, 3 B. & Ad. 788 ; Rex v. James, 7 C. & P. 553 ; Reg. v. Carter, 1 Den. C. C, 65. 378 JOINT STOCK BANKS. annual general retiu'u for March, 1848, lias been held admissible in evidence, to show a person to be a member on the 24th of January, 1848 {rj). By sect. 4, the return is made evidence, that all persons named therein, as members of the corporation or copart- nership, were such at the date of the account or retimi. On the other hand, however, when certain proprietors of a company were sued upon a judgment against the public officer, the enmneration of proprietors in such a return, to the Inland Revenue Office, was not receivable in evidence against the plaintiff, to show that at the time they were not proprietors (//). It is said to be the rule not to admit the retiu'u in evi- dence, unless it has been filed within the time limited by the statute (i). The fact of the return having been made, is not a con- dition precedent to the public officer's right to sue on behalf of the company (/.•) . Annual Annual Return. — The continuance of the retm'us is thus provided for by sect. 5 : — That such account or return shall be made out bj^ the secretary or other person being one of the public oflBcers appointed as aforesaid, and shall bo verified by the oath of such secretary or other jiublic officer, taken before any justice of the peace, and which oath any justice of the peace is hereby authorized and empowered to admi- nister, and that such account or return shall, between the 28th of Fehruarii and the 2oth of March in every year, after such corporation or copartnership shall be formed, be in like manner delivered by such secretary or other public officer as aforesaid, to the Commissioners of Stamps, to be filed and kept in the manner and for the inirposos as hereinbefore mentioned. This is one of the pro\isions of the legislature, which it (f/) Bosanquct v. Sltortriclge, 4 Exch. 699. (h) Trcscott V. Buferij, 1 C. B. 41. (;) 2 Taylor on Evklcucc, 1491, 4th edit. (/,) Bown-x. Mitchell, 5 Exch. 415; 19 L. J., Exch. 302, decided on similar provisions in the Scotch Banking Act, 7 Geo. 4, c. C7. ANNUAL llETURN. 379 is usual to call directorij ; it does not seem to be obligatory to file the retiu^n within the specified period of the j-ear (/). Then sect. 6 enacts, that certified copies of such returns shall be evidence (w). It is manifest, that register books, in wliicli the names of members are inscribed, and from which the returns are to be copied, cannot be altered or varied bv the dii-ectors, or the company, especially jmst litem motam, except for the pm-pose of a merely verbal correction (//). The Board of Inland Revenue is dii-eeted, for a fee of ten shillings, to give certified copies of the retmiis or ac- comit, sect. 7. An account of the names of persons appointed officers, persons ceasing to be members, of persons newly becoming members, &c., is to be made/ro/;i time to time, as occasion requires, sect. 8. These returns are also required to be made by banking companies carrying on business within sixty-five miles of London (o) . By 7 & 8 Yict. c. 32, s. 21, every banker in England and Wales must on the 1st of January in each year, or within fifteen daj's afterwards, make a retm-u to the commissioners of Inland Revenue of his name, residence and occupation, and, in case of a company or copartnership, of the name, residence and occupation of every member, with other particulars. The commissioners had also to publish such retmns in certain newspapers, but by 43 & 4-t Yiet. c. 20, s. 57, it is enacted that commissioners shall no longer be obhged to publish in any newspaper any return made to them by any banking company which is duly registered under 6 Geo. IV. c. 42, 7 Geo. IV. c. 46, 7 Geo. IV. c. 67, and the Com- panies Acts or any of them. (?) P«- Parke, B., Steward y. Bimu, 12 M. & W. G63. (;«) See as to the form and requisites of the return, Bosan^uct v. Short' ridi/e, 19 L. J., Exch. 221. («) Shortridqe v. Bosnuqud, 16 Beav. 90. {ij) 2.3 & 20 Vict. c. 89, s. 205, 3rd Schedule, Part IL 380 JOINT STOCK 13ANKS. Co)i tracts. — Copartnersliips formed under 7 Geo. IV. c. 46, not being constituted corporations, contracts wliicli tliey may enter into within the scope of their business do not require to be under seal, but may be signed or executed by their manager {p). Actions and Suits. — No more than one action or suit for the recovery of one and the same demand can be brought against these copartnerships, in case the merits have been tried in such action or suit {q). The mode prescribed by 7 Geo. IV. c. 46, s. 9, for these copartnerships to sue and to be sued, is by a pubhc officer, and being applicable to other banking companies by subsequent legislation, it will be more useful to consider the whole subject under one title (r). {p) In Swift V. Wintcrhotliam (L. R., 8 Q. B. 2U, 2o0), Mr. Justice Quain, in delivering the considered jiidg-ment of the Court, made the following observations upon the constitution and character of one of these banking copartnerships: "It appears that the Gloucestei-shire Banking Company is a copartnership, formed under 7 Geo. 4, c. 4G, for the pur- pose of carrpng on the business of bankers at places more than sixty-five miles from London. The companj' is not a corporation, and has, there- fore, no common seal. It is a copartnership created by deed or articles of copartnership for a particular purpose, with certain statutable privi- leges. It can sue and be sued only in the name of one of its public officers, and in all litigious business the company is repi'esented by one of its public officers who must be a member of the company ; and individual members cannot be sued in respect of transactions with the company till a judgment or deci'ce has been first obtained against the company through one of its public officers. In I'uir/ri v. I'dffc (3 C. B. 16), a com- pany established under this act was considered a quasi-corporate body, so as not to be affected by what may have been known to any individual member. " The act contains no provision as to the manner in which the company shall make or sign deeds, contracts, or documents of any description. It confers no authority on the imblic officer to bind the comjiany, but makes him the representative of the bank only for litigious i)urposes ; and although he must be a member of the company, he may have nothing to do with the management of its affairs. It seems obvious, therefore, from the nature of its constitution as a fluctuating and numerous body, that the company cannot affix its signature to documents otlicrvvise than by the hand of some individual or individuals wlio, by the articles of co- partnersliip, are appointed to represent the general body in such matters." {//) 7 Geo. 4, c. 4G, s. 10, and 1 & 2 Vict. c. 9G, s. 2, made perpetual by 5 & 6 Vict. c. 85. (>•) Sec jjost, Chapter, Public Officer. EFFECT OF JUDGMENTS, DECREES AND ORDERS. Set-off hettcccn Cojmrtnenhip and Members. — With respect to this right it is enacted («), — That no claim or demand which any member of any such co- partnership may have in respect of his share of the capital or joint stock thereof, or of any dividends, interest, profits or bonus, pay- able or apportionable in respect of such share, shall be capable of being set off, either at law or in equity, against any demand which such copartnership may have against such member on account of any other matter or thing whatsoever ; but all proceedings in re- spect of such other matter or thing may be carried on as if no claim or demand existed in respect of such capital or joint stock, or of any dividends, interest, profits or bonus, payable or apportionable in respect thereof. Where a member of a banking copartnership kept an account with them as his bankers, and became bankrupt, indebted to the bank on the account, the company, being largely indebted to other persons, has a right of proof against the bankrupt in respect of the balance due to them on his account (/). Effect of Judgments, Decrees and Orders. — Then there is a provision, that decrees in equity, made or obtained against the imblic officer, shall take effect against the company («), and so with respect to judgments in actions {u). The 7 Geo. IV. e. 46, s. 13, provides a mode of realiz- ing the fruits of a judgment obtained against the public officer, in case there are no pai-tnership assets to meet it, by an exhaustive process of execution against members, either collectively or individually. This process is by issuing a \mt of scire facias, by leave of the Com-t in which the judgment is obtained, in order to make them parties to the judgment, and so liable to execution {x). This mode of proceeding, however, against members, (s) 1 & 2 Vict. c. 96, s. 4, continued by 2 & 3 Vict.c. 68, and 3 & 4 Vict. c. Ill, and afterwards made perpetual by 5 & 6 Vict. c. 85, App. {t) Ex parte Davidson, 2 M., D. & De G. 368. (m) 7 Geo. 4, c. 46, ss. 11, 12. {x) Eansfordv. Bosanquct, 2 Q. B. 972; Hodgson v. Scott, 2 Exch. 469; Hani; of England v. Johnson, 3 Exch. 598 ; Barlrr v. Buftresn, 7 Beav. 143. 381 382 JOINT STOCK BANKS. wlien execution against the public officer proves to be fruitless or ineffectual, would seem to have been entirely superseded by the power gi^-en to a company, unable to meet its liabilities, or to creditors whose claims are un- satisfied, of obtaining a winding-up order under the Com- panies Act of 1862, and thus to stay all legal proceedings against the company or its members {y) . The procedure by scu'e facias is therefore practically obsolete. It may be observed, that when execution issues upon a judgment against the public officer, no scire facias is necessary, as he is a party to the judgment and previously liable thereon (;;). Execution cannot issue against parties after they have ceased to be members for three years (f?). But members satisfying an execution against them are entitled to reimbursement out of the fimds of the copartnership, or to contribution from the other members, as in the case of an ordinary partnership [h). The law applicable to the wind- ing-up of banldng copartnerships, and the liability of shareholders to contribution, will form the subject of a separate consideration. Regido'tng Judgments against Mcmhcn. — If a judgment is recovered against the public officer, and it is sought to charge the real estate of a member of the copartnership at the date of the judgment, the Court of Common Pleas has no jurisdiction over the senior master, to order him to receive the memorandum, in order to register the judg- ment pursuant to the 1 & 2 Vict. c. 110, s. 19, and 3 & 4 Vict. c. 82, s. 2. It is entirely in his direction to receive the memorandum (c). Where, however, a creditor obtained a judgment against the official manager of a banking company, and registered (y) 25 & 26 Vict. c. 89, ss. 199, 201, aiid ss. 80, 87, 89. Iz) Hnnrood v. Lair, 7 M. & W. 203. \a) Barker v. Buttre-'in, 7 Beav. 134. [b) 7 Geo. 4, c. 40, s. 14. (V) Rr parte iV^.w, o D. k L. 330 ; 5 C. B. ir,.'> : 2 &- 3 Vict. o. 11, n. 8. UNDEK THE 7 & 8 VICT. C. 113, 383 the judgment against tlio real estate of a former share- holder without the leave of the Court, the Irish Court of Chancery gave relief against such registration and ordered it to bo removed, as being a cloud on his title to his lands [d). The registration of judgments or decrees in equity, in order to charge the lands of shareholders, will now be rarely resorted to, as the means of obtaining satisfaction of judgment debts will be more efficacious and expeditious under proceedings to wind up the com- pany. The 7 Geo. IV. c. 46, unrepealed. — fSueh are the several provisions relating to the constitution and regulation of these copartnerships ; and they are still in force as to all such copartnerships which have not registered themselves under the Joint Stock Banking Companies Act of 1857 (f), or under the Companies Act of 18G2 (/), or have not obtained letters patent incorporating them under the 7 & 8 Vict. c. 113. Joint Stock Banks under the 7 (^ 8 Vict. c. 113. — Banking copartnerships could not be formed by deeds of settlement, under the 7 Geo. IV. c. 46, after the 6th of May, 1844. The 7 & 8 Vict. c. 113, which was passed in the year 1844, for regulating joint stock banks in England, prohibited the formation of banking companies consist- ing of more than six persons, unless by virtue of letters patent granted according to its provisions {g). It enabled banking companies of more than six persons, either formed or carrying on business before the 6th of May, 1844, to [d) Eone v. 0' Flahertle, 9 Ir. Chanc. Rep. 119, 497; see Ilarris v. Itoyal British Bank, 27 L. J., Exch. 1. [e) 20 & 21 Vict. c. 49. (/) 25 & 26 Vict. c. 89. The 6 Geo. 4, c. 42, as to Irish banks, is still in force. {(j) See Wirjan v. Fowler, 1 St. 459 ; Perrinq v. Dunston, E,y. & M. 426. The 9 & 10 Vict. c. 75, repealed by 20 & 21 Vict. c. 49, s. 12, and 25 _&;26 Vict. c. 89, s. 205, was a siniilar enactment for the regulation of joint stock banks in Iroland and Scotland. 384 JOINT STOCK BANKS. obtain letters patent incorporating- them (//). This act was subsequently repealed, as we shall afterwards see, but it is necessary to refer to the provisions of the act as governing the companies which may have been formed under it. A body of persons intending to become a joint stock banking company under this act petitioned the Queen in council, according to a prescribed form (?) ; and, on the report of the Board of Trade that the statutory require- ments had been complied with, a charter was granted (A-) ; a deed of settlement containing certain specified provi- sions (/), which, however, have been materially altered in one respect by subsequent legislation, to be mentioned hereafter, so as to admit of the re-election of outgoing directors (;;?), was then executed by the holders of at least one-half of the shares (/), and the Queen by the letters patent incorporated the company {ii), but so that the liability of the shareholders was not limited (o), and actions might be brought by or against the company, or share- holders, reciprocally (;;), every judgment, decree or order of any Court of justice against the company being enforceable against the company, and against shareholders and fonner shareholders {q), and execution against the company, proving ineffectual, might be had against any shareholder, and if unproductive, then against any person who might be a shareholder at the time when the cause of action arose, witli a limitation of three years after ceasing to be a shareholder (r) ; such shareholder being entitled to reim- bursement out of the effects of the company, or, in default, to contributions from the other shareholders (s). A creditor, obtaining a judgment against the company, ma}- proceed by scire facias on the judgment against the shareholders, and is not limited to the remedy given by {h) 7 & S Vict. c. 113, s. 45. {o) 7 & 8 Vict. c. 113, s. 7. (/) Id. s. 2. (p) Id. s. 8. (/.) Id. s. 3. () : any transfer made within sneli fourteen days is to be considered as being made subsequently to such, ordinary meeting, as between tbe company and tbe transferee {q). Wlien shares come to any one by the death, bankruptcy or insolvency of a shareholder, or by the marriage of a female shareholder, or by other legal means than by the above mode of transfer, the claimant is not entitled to receive dividends, or to vote in respect of them, until such transmission of them is authenticated by a declaration in ^vl'iting, stating the manner how, and to whom they pass, to be made and signed by a credible person before a magistrate (/•). This declaration is to be left with the secretary, who thereupon is to enter the name of the person entitled on the register book of shareholders, at a fee of not exceeding 2s. 6d., payable to the company (s). Where persons are jointly entitled to shares, all notices required to be given to shareholders must be given to the person whose name stands first in the register of share- holders, which is to be notice to all of them (/). When the shareholder is a minor, idiot or hmatic, the receipt for any money payable to him of the guardian, in case of a minor, of the committee, in case of an idiot or lunatic, shall be sufficient {u) . The company is not boimd to regard trusts to which any shares may be subject (x). The receipt of the person in whose name a share stands in the books of the company discharges the company, in [p) In sect. 25, the words used are, "notice shall be given by adver- tisement iu some newspaper as after mentioned," but the only newspaper mentioned subsequently is the Londou Gazette, sect. 38. {rj) 7 & 8 Vict. o. 113, s. 25. {)•) Id. s. 26. The directors may require such other form as they may think fit. (s) Jcl. 8. 26. The transmission of shares by will, intestacy or on mar- riage of a female shareholder, is provided for by sect. 27. (t) Id. 8. 28. (u) Id. 8. 29. (.r) Id. a. 30. UNDER THE 7 & 8 VICT, C. 113. 38^ respect of any dividend or other sum paj^able iu respect of sucli share, notwithstanding any trust attaching to the share (x). The Kability of shareholders is unlimited (//) ; they may be sued by, and may sue, the company (s), and judgment, decrees and orders against the company may be under certain circumstances enforced against them individually, whether they are members at the time the cause of action accrues, or have been members within tlu-ee years (s) . A creditor cannot maintain an action against a share- holder for his debt, his remedy is against the com- . pany(r/). From time to time the directors may make such calls on the shareholders, " in respect of the amount of capital stock respectively subscribed by them," as the directors shall think fit {b). ^Vhenever execution upon any judg- ment against the company shall have been taken out against any shareholder, the directors, within twenty- one clays next after notice served upon the company of the payment of any money by such shareholder, his executors or administrators, in or toward satisfaction of such judgment, shall make such calls upon all the shareholders as will be sufficient to reimbm'se such share- holder, his executors or administrators, and every share- holder must pay every call to the persons at the times and places from time to time appointed by the direc- tors (c). Besides being liable to pay calls, shareholders may forfeit their shares by leaving calls unpaid, if the directors at any time after six calendar months from the day appointed for the payment of such calls declare them to be so forfeited ; {x) 7&8Vict. c. 113, s. 30. (y) Id. s. 7. (s) Id. ss. 8—10. See post, pp. 392, 393, as to tliia liability. (a) Fell V. Bnrchctt, 7 El. & Bl. 537 ; 26 L. J., Q. B. 223. (b) 7 & 8 Vict. c. 113, s. 31. (c) Id. Interest at bl. per cent, per annum on calls impaid is recoverable under sect. 32. And sects. 33 — 35 provide for the enforcement and proof of calls in an action. 390 JOINT STOCK BANKS. the shareholders still remaining liable for the calls due before the forfeiture (d). But in order to authorize the sale or forfeiture of such shares, the declaration must be confirmed at some general meeting, held at least two calendar months from the day the notice of intention to declare was given (e). And on payment of the arrears of calls due on such shares and the interest and expenses being made before actual sale, they revert to the original owner (/). The deed of partnership of every joint stock banking company imder this statute, prepared according to a form approved of by the Board of Trade, in addition to any other pro- visions contained in it, must include specific provisions for the management of the affairs of the bank, and the election and qualification of directors (g). As regards re-election of retii-ing directors, no deed of settlement of any company, established since the 29th of July, 1856, under the 7 & 8 Yict. c. 113, need contain any proviso for preventing the re-election of retiring di- rectors, either absolutely or for any limited period ; and, in every banking company, being at that date established under that act, the directors retiring at any general meet- ing henceforth will be eligible for re-election, (if duly qualified in other respects,) notwithstanding the proviso in the 4th section, that the deed of partnership should contain a specific proviso for the retii'ement of at least one-fom-th of the directors yearly, and for preventing the re-election of the retiiing du'cctors, for at least twelve calendar months : this proviso having been repealed by the 19 & 20 Yict. c. 100, ss. 1, 2. Any one of the directors is empowered to sign bills of (d) 7 & 8 Vict. c. 113, s. 37. Notice of the intention to declare must be first served, sect. 38 ; if the addi-ess of the proprietor is not known, it must be published in London Gazette, sect. 38. (e) Id. a. 39. Evidence of forfeiture, sect. 10. Title to such shares of buyer, sect. 10. By sect. 11, no more shares to be sold than sufficient to satisfy calls and costs. (/) Id. a. 42. (ff) Id. s. 4. UNDER THE 7 & 8 VICT. C. 113. 391 exchange or promissory notes on behalf of the compan}^ provided it is therein expressed to be made, accepted or indorsed by him on behalf of the company ; and he is not to be liable on such bills or notes, otherwise than he would have been on any other contract, signed by him on behalf of the company (h). A manager, or other officer to per- form the duties of a manager, must be appointed imder this statute [i). The duties of the manager, who is not personally hable on contracts signed by him on behalf of the company, are the following only, as limited by the statute. Bills of exchange or promissory notes on behalf of the company may be made, accepted or indorsed, in any manner specified in the deed of partnership, provided they are signed by the manager (or one of the dii-ectors), and by him expressed to be so on behalf of the com- pany {k). Services of notices, \aits, or other proceedings at law or in equity, or otherwise, on the manager or any director, by lea^dng them at the principal office of the company, or if the company has suspended or discontinued business, by servmg personally the manager or director, or by leaving the same with some inmate at the usual or last abode of the manager, is good service on the com- pany (/). There must be holden once at least every year, at an appointed time and place, an ordinary general meet- ing of the company {m). Extraordinary general meetings must be held upon the requisition of nine shareholders or more, having in the whole, at least twenty-one shares {m). The deed of part- nership must contain provisions for the yearly audit of the accoimts by two or more auditors chosen at a general meeting of the shareholders, and not being directors (di). The deed of partnership must contain provisions for the (/i) 7 & 8 Vict. c. 113, s. 22. (i) Id. s. 4. (k) Id. 8. 22. . (/) Id. s. 43. {m) Id. s. 4. y02 JOINT STOCK BANKS. publication once at least in every month of the assets and liabilities of the company, and for the yearly communica- tion to every shareholder of the auditor's report, of a balance sheet, and profit and loss account {in). These are the several regulations prescribed by the Act of 1844, and apply still to banks fonned imder its provisions, except so far as they may be affected by regis- tration, as afterwards mentioned. 3 & 4 Will. Joint Stock Banks n-ithin Sixty-five Miles of London. — IV. c. 98. ^,j^^ o ^^ 4 -^Yiii, iY_ e. 98, s. 3, as already shown («), enabled banking companies of more than six members to carry on business within sixty-five miles from London, but they were not empowered by any Act of Parliament to sue or to be sued by a public ofiicer. The 7 & 8 Vict. c. 113, therefore, conferred upon these companies, which were established on the Gth of May, 1844, tlie powers and privileges of suing and being sued in the name of a public officer, and enacted that judgments, decrees and orders might be enforced, as under the 7 Geo. IV. c. 40, with respect to banking companies carrying on business beyond sixty-five miles from London, provided they made out and delivered the several accounts required by tliat act {o) . The act, however, was repealed in 1857 {])), but the last- mentioned x^ro^isions as to banking companies existing within sixty-five miles of London, suing and being sued, and making the returns, were re-enacted in 1862 (q). 20 & 21 Vict. Registration of Joint Stock Banks.— In 1857, the com- ''• ^^- panics formed under the 7 & 8 Vict. c. 113, were required to be registered under the Joint Stock Banking Companies Act of that year (r) ; and legal proceedings commenced (»i) 7 & 8 Vict. c. 113, s. 4. («) Ante, p. 330. (o) 7 & 8 Vict. c. 113, 8. 47. (p) 20 & 21 Vict. c. 49, s. 12. {(/) 25 & 20 Vict. c. 89, s. 205, Third Schedule, Tart 2. (r) 20 & 21 Vict. c. 49. REGISTRATION. 393 by or against a company when registered, or public officer, might be continued as if registration had not taken place, but execution was not to be issued against the effects of individual shareholders or members upon any judgment, decree or order obtained against the company (s) ; for, in the event of the property and effects of the company being insufficient to satisfy sucli judgment, order or decree, an order might be obtained for winding-up the company (s). The jDrocedm-e prescribed by the 7 & 8 Vict. c. 113, s. 9, for obtaining execution against individual members was practically abolished, and the right of contribution from all the shareholders by proceedings against the company was established and enforceable. If these companies neglected to register before the 1st of January, 1858, they were incapacitated from suing either at law or in equity, though they might be sued, nor could any dividend be payable to their shareholders, and the dii'ectors or managers incmTcd a penalty of 5/. for every day the registration was delayed {t) . The omission to register did not however render the company illegal {t). The act also enabled banking companies, which were not formed mider the 7 & 8 Yict. c. 113, consisting of seven or more persons, having a capital of fixed amount and divided into shares also of fixed amount, and legally carrying on the business of banking at the time of the passing of the act, to register themselves, having first obtained the assent of a majority of their shareholders (i/). When registered, the provisions contained in any act of parliament, letters patent, or deed of settlement, consti- tuting or regulating these companies when inconsistent with the Joint Stock Companies Acts of 1856 and 1857, or with the act itself, were no longer to apply to them («). Eegistration was not to take away or affect any powers previously enjoyed by the companies of banking, issuing (.■;) 20 & 21 Vict, c, 49, 8. 10. {t) Id. 8. 5. («) Id. 8. 6. 394 JOINT STOCK BANKS. notes payable on demand, or of doing any other tiling {u). A banking company constituted imder the 7 Greo. IV. c. 46, became insolvent, and stopped payment, but no resolution was passed for dissolving it. It was registered under the 20 & 21 Vict. c. 49, in pursuance of a resolu- tion come to after the stoppage of the bank. Lord Justice Turner held, that the registration was valid, for that, in order to bring a company wthin the 6th section of that statute, it was not necessary that it should continue to carry on business up to the time of its registration (ip). Upon these companies being registered, the articles of Table B., prescribed by the Act of 1856, relating to shares, theu' transmission and forfeitm-e, numbered one to nine- teen, were, subject to the power of alteration conferred by the Acts of 1856 and of 1857, to be deemed the regula- tions of these companies (//) . The act also repealed the 7 & 8 Vict. c. 113, as to banking companies to be formed after the 17th of August, 1857 (s). With respect to the formation of new companies it provided, that seven or more persons, associated for the pm-pose of banking, might register themselves other than as a limited company, subject to the condition that the shares into which the capital of the company was divided were not to be of a less amount than 100/. each; but that more than ten persons after the 17th of August, 1857, should not form themselves into a partnership for the purpose of banking, or, if so formed, carry on the business {u) 20 & 21 Vict. c. 49, s. 6. [x) In re KorthumherlaHd and Durham Bintrkl Banking Companij, 2 Dc G. & J. 357 ; 27 L. J., Chanc. 356. In au actiou by a banking- companj-, registered under the 20 & 21 Vict. c. 49, s. G, the Court allowed the de- fendant to plead a traverse of the registration of the company ; that the company was carrying on business until registration ; that before regis- tration the company had stopped payment, and ceased to carry on busi- ness, and uul tiel corporation ; but disallowed a plea, that before regis- tration the company bad lost its reserved fund, and more than onc-hfth of its paid-up capital, whereby the bank had ceased to carry on legally its business. Liverpool UuroiK/Ii Bank v. McUor, 3 II. & N. 551. (y) 20 & 21 Vict. c. 49, s. 12. \z) Id. 8. 12. The section repealed the 9 & 10 Vict. c. 75, as to Irish and Scotch banking companies, and sect. 4 reqmrcd them to register imder the act. UNDER THE COMPANIES ACT, 1862. of banking unless registered as a company under that act (a). Limited Banks. — Before treating of limited liability banking companies, wbicb, on account of the novelty of the princij)les under which they may be established, de- mand a separate consideration, the legislation affecting the companies mentioned in this Chapter remains to be noticed. Joint Stock Banks under the Comjmm'es Act, 1862. — All banking companies which were, or were required to be, registered under the 20 & 21 Vict. c. 49, except those having the liability of their members limited by act of parliament or by letters patent, are to register imder this act (b) . Until registration, they cannot sue, although they may be sued, nor can they pay dividends, and the directors or managers are liable to a penalty of not less than o/. per diem [c). Upon complying with the directions of this act, as to registration, they are entitled to become an incorporated company {d) , and a certificate of incoi-^^oration to which the company is entitled, will be conclusive evidence that the requisitions of the act in respect of registration have been complied with {d). The provisions contained in any act of parliament, deed of settlement, or letters patent, constituting or regulating these companies, are still to apply to them (e) . The Companies Act of 1862 repeals the 20 & 21 Vict. c. 49, but re-enacts the provision of the 12th section of («) 20 & 21 Vict. c. 49, s. 13. {b) 25 & 26 Vict. c. 89, ss. ITo, 176, 178, 179. [c) Id. ss. 209, 210. (d) Id. ss. 191, 192. The certificate of registration is conclusive evi- dence that all the requirements of the act relative to registration have heen complied with, and the incorporation of the company cannot after the grant of the certificate be impugned, even on the ground of miscon- duct of the registrar in reference to the registration. In re Barncd^s Banldnq Company, 36 L. J., Chanc. 757. {e) id. s. 196. 396 . JOINT STOCK BANKS. that act, legalizing private banking firms of not more tlian ten members. Private banks may consequently consist of ten partners (/), or of any less number. With respect to the foi-mation of new companies, it ex- pressly enacts, that no company, association or partnership consisting of more than ten persons shall be formed after the 2nd of November, 1862, for banking purposes, unless it is registered as a company under the act, or is formed in pursuance of some other act of parliament or of letters patent [g) . It provides, however, that seven or more per- sons may, by subscribing their names to a memorandum of association and complying with the requisitions of the act in other respects as to registration, form an incorporated banking company with or without limited liability (//). Since the facilities given to form companies upon the prin- ciple of hmited liability, and the popularity which such companies have nov/ attained, it is not likely that banking companies will henceforth be established with unlimited liability. It is therefore deemed unnecessary to enter into the law applicable to their formation. We now proceed to consider the subject of limited banking companies. (/) 2o & 26 Vict. c. 89, s. 205, Thkd Schedule, Tart 2. iff) Id. s. 4. (/() Id. a. 6. ( 397 ) CHAPTER XLIV. LIMITED BANKTXG COMPANIES. Prior to the year 1858, banking companies could not be legally formed with limited liability except by special acts of parliament {a) , or by royal charters, or by letters patent, imder the 7 Will. IV. & 1 Yict. c. 73 {b). In 1858, the 21 & 22 Vict. c. 91 repealed so much of 20 & 21 Vict. c. 49, as prohibited banking companies from being registered ■with limited liability, and first authorized the formation and registration of banking companies of seven or more persons with limited liability. Converting Unlunited into Limited Liability under 21 l^ 22 21 & 22 Vict. Viet. c. 91. — The latter act also enabled existing unlimited banking companies to register themselves as limited bank- ing companies (c) . But banking companies claiming to issue notes in the United Kingdom were not entitled to limited liability in respect of such issue, their liability re- maining unlimited (c) . Previously to a company obtaining a certificate of registration with limited liability under this act, it was necessary to give notice to its customers, or otherwise the certificate of registration, as to them, was wholly inoperative and unavailable. Before commencing business, and also on the 1st of February and the 1st of August in each year of its operations, every banking company, registering as a limited banking company, was bound to publish, in a prescribed form, a statement of its (ff) The Bank of England is an instance. The liability of the stock- holders is limited to the amount of theii- subscriptions or shares: see 5 & 6 WiU. & M. 0. 20, s. 26. (*) Sect. 4 enables the crown to restrict by the letters-patent or chai-ters the liability of the members to the amount of their .shares. (c) 20 & 21 Vict. 0. 49. LIMITED BANKING COMPANIES. liabilities fiud assets {h). In 18G2, tlie 21 & 22 Yict. c. 91 was repealed by tbe Companies Act of that year (c) ; but its provisions have been substantially re-enacted by the latter act. Convciiing into Limited Liahility under Companies Act, 18G2. — By sect. 179, banking companies, consisting of seven or more members, whose liability is unlimited, may become limited banking companies by registering under the provisions of the act. Before registering as limited banking companies they must fii'st obtain the assent of a majority of the members present or represented by proxy at a general meeting summoned for the purpose {d). The following documents must also be delivered to the Eegistrar of Joint Stock Companies (e), viz. : — 1. A list showing the names, addresses and occupations of all persons who, on a day named in the list, which must not be more than six clear days before registration, were members of the company, v/ith the addition of the shares held by each member, distinguishing each share by its specific number. 2. A copy of the deed of settlement, royal charter, letters patent or other instrument constituting or regulating the company. 3. This list and copy must be accompanied by a state- ment of the following particulars, viz. : The nominal capital of the company, and the number of shares into which it is divided ; the nimiber of shares taken, and the amount paid on each share ; and the name of the company, (b) 20 & 21 Vict. c. 49. \c) 25 & 26 Vict. c. 89, s. 205, Third Schedule, First Part. By the Bame act it is made lawful for any number of persons, not exceeding ten, to carry on the business of banking in the same manner and ujion the same condition as any company of not more than six persons could before the act (Schcd. 3, Part 2). {d) Id. 8. 179. Eegistration of existing limited banking companies under the act, is made compulsory ; and until registration they are liable to certain pecuniary penalties and subject to disabilities (sects. 209, 210). {,) Id. s. 18:5. LIMITED LIABILITY UNDER COMPANIES ACT, 1862. 399 with the addition of the word '" limited," Jis the last word thereof. Where the whole or a portion of the capital has been converted into stock, the company must, instead of a state- ment of its shares, deliver a statement to the registrar of the amount of its stock, and of the names of the persons who were holders of stock, on some day to be named in the statement, not, however, being more than six clear days before registration (./). The list and particulars must be verified by a statutory declaration of the directors of the company, or of two of them {g) . A banking company may, for the purpose of obtaining registration with limited liability, change its name by the addition of the word " limited " {h). A banking company, registering as a limited banking company, must, at least thirty days previously to obtain- ing a cei-tificate of registration with limited liability, give notice that it is intended so to register, to every person and partnership firm having a banking accoimt with the company, and the notice must be given either by delivering the same to such person or firm or leaving the same or putting the same into the post, addressed to him or them at such address as shall have been last communicated or otherwise become known as his or their address to or by the company (?). In case the company omits to give this notice, the act provides, " that as between the company and the person or persons only who are for the time being interested in the account in respect of which the notice ought to have been given, and so far as respects such account and all varia- tions thereof down to the time at which the notice is given, (/) 25 & 26 Vict. c. 89, a. 185. {g) Id. s. 186. By tlie Stamp Act, 1870, a statutory declaration made under the provisions of the 5 & 6 Will. 4, c. 62, requires to be stamped with a duty of 2s. 6d. {h) Id. s. 190. {i) Id. s. 188. 400 LIMITED BANKING COMPANIES. but not further or otlierwlse, the certificate of registration with limited liability" is to be inoperative. Banking companies issuing notes in the United King- dom are not entitled to limited liability in respect of such issue {I). These companies continue subject to unlimited liability in this respect, and, if necessary, the act provides, that the assets shall be marshalled for the benefit of the general creditors and the members liable for the whole amount of the issue, in addition to the sum for which they would be liable as members of a limited company (/). Upon these provisions being complied vnth., the company Tvill become an incorporated limited bankmg company, having a common seal and a perpetual succession, with power to hold lands (m) . In the case of a banking com- pany in Scotland, it becomes, by virtue of the registration, a bank incorporated, constituted or established by or imder act of parliament {})i). The cei-tificato of incorporation, when obtained, will be conclusive evidence of the company having complied with the provisions of the act in respect of registration, and of being authorized to be registered as a limited company. The date of incorporation mentioned in the certificate will be considered as the date of its incorporation (;?). IJff'ecf. of Rccjkti'cition loidcr Ad of 1862. — On regis- tration, the provisions in the act of parliament, deed of settlement, letters patent, or other instrument constituting or regulating the company, will apply to the limited com- pany, as well as the provisions of the Companies Act of 18G2, and to the members, contributorics and creditors, as if the company had been originally formed under that act (o). {/) 25 & 26 Vict. c. 89, s. 182. {m) Id. fl. 191. The section also prescribes the fees payable on regis- tratiou of uiiliiaitcd banking companies. See Table of Fees, post, 400, n. {») Id. s. 192. But see sect. 188. (.>) Id. 8. 19G. LIMITED LIABILITY UNDER COMPANIES ACT, 1879. 401 All the property of the compaii}^ its interests and rights existing at the date of its registration, pass to and vest in the incorporated company (p). Registration is not to affect or prejudice the liabiKty of the company to have enforced against it, or its right to enforce, debts, obligations or con- tracts entered into by, to, with or on behalf of such com- pany previously to such registration (q) . Actions and suits and other legal proceedings pendiiig against the company, or its members or the public officer, at the time of its registration, may be continued. Execution, however, is not to issue against the effects of an individual member upon any judgment, decree or order ; but, in the event of the property and effects of the company being insufficient to satisfy these liabilities, an order may be obtained for winding up the company (r) . The mode of winding up, and the liabilities of its members, will form the subject of a separate Chapter. Coinrrfiiig info Limited Liabilitij under Comjxinies Act, Act to be 1879 (.s). — This act, so far as is consistent with the tenor ^th 2T& 2G thereof, is construed as one with the Companies Acts, 18G2, Vict. c. 89, ' 30 & 31 Vict. 1867, and 1877 (0- c i3i, aud By sect. 4 it is enacted that, subject to what is men- ^°<,'^'*^ ^^^'^*- tioned in the act, any company registered before or after Registration its passing as an unlimited company may register under ^^«^^ °* '=*^™" the Companies Acts, 1862 to 1879, as a limited company, 25 & 26 Vict. c. 89, 30 & 31 [p) 25 & 26 Vict. c. 89, s. 193. \q) Id. s. 194. This section does not apply to the case of a pui-e con- trlhuton/. And if a company originally unlimited, but subsequently limited," is wound up, member.s of the unlimited company cannot be made liable as contributories beyond the limit of their shares for debts con- tracted before the company became limited. Aliter, under the Act of 1856, see sect. 116. Sheffield mid HaUamshire, ^r. Societij, Fountahi's case, 34 L. J., Ch. 593 ; Garneit Mining Company v. Sutton, 34 L. J., Q. B. 118. Quecre, whether they could not be made liable on the obligation attaching to the partnership at common law. Lanyon v. Smith, 2 N. E,. 118. See Buckley, 341. (r) Id. s. 195. See Lmujon v. Smith, ante. {s) 42 & 43 Vict. c. 7. (0 Sect. 3. The act does not apply to the Bank or England (sect. 2). G. I> D 402 LIMITED BANKING COMPANIES. Vict. c. 131, or any company already registered as a limited company c^26 ^2 &^43 ''^^y I'e-i'egister under the provisions of the act. Vict. c. 76. The registration of an unlimited company as a lunited company in pursuance of this act is not to affect or preju- dice any debts, liabilities, obligations, or contracts inciuTed or entered into by, to, Avith, or on behalf of such company prior to registration, and such debts, liabilities, contracts, and obligations may be enforced in manner provided by 25 & 26 Vict. Pai-t VII. of the Companies Act, 1862, in the case of a ^' ' company registering in pm'suance of that part {ti). Reserve By sect. 5, an unlimited company may, by the resolution company* passed by the members when assenting to registration as a how provided, limited company under the Companies Acts, 1862 to 1879, 25 "^26 Vict. Qj^^ fQj. ^]^Q purpose of such registration or otherwise, c. o9, 30&31 . , .,,. Vict. c. 131, increase the nommal amoimt of its capital by mcreasmg c^'T6 W&°43 ^^6 nominal amount of each of its shares. Vict. c. 76. Pro\dded always, that no part of such increased capital shall be capable of being called up, except in the event of and for the purposes of the company being woimd up. And, in cases where no such increase of nominal capital may be resolved upon, an unlimited company may, by such resolution as aforesaid, provide that a portion of its uncalled capital shall not be capable of being called up, except in the event of and for tlie pm-poses of the company being wound up. A limited company may by a special resolution declare tliat any portion of its capital which lias not been ah'eady called up shall not be capable of being called up, except in the event of and for the purpose of the company being wound up ; and thereupon such portion of capital shall not be capable of being called up, except in the event of and for the purposes of the company being wound up (x). 25 & 26 Vict, By sect. 6, section one hundred and eighty-two of the re^cal^d^and Companies Act, 1862, is repealed, and in its place it is liability of enacted as follows : — A bank of issue registered as a («) See ante, p. 101. (.r) Sect. 5. LIMITED LIABILITY ITXDER COMPANIES ACT, 1879. 403 limited company, either before or after the passing of this bank of issue act, shall not be entitled to limited liability in respect of ^,p™t*o^ ^^ its notes ; and the members thereof shall continue liable in i^otes. resjDect of its notes in the same manner as if it had been registered as an unlimited company ; but in case the general assets of the company are, in the event of the company being wound up, insufficient to satisfy the claims of both the note-holders and the general creditors, then the members, after satisfjing the remaining demands of the note-holders, shall be liable to contribute towards pay- ment of the debts of the general creditors a sum equal to the amoimt received by the note-holders out of the general assets of the company. For the purposes of this section the expression "the general assets of the company" means the funds available for payment of the general creditor as well as the note- holder. It shall be lawfid for any bank of issue registered as a limited company to make a statement on its notes to the effect that the limited liability does not extend to its notes, and that the members of the company continue liable in respect of its notes in the same manner as if it had been registered as an unlimited company {//). (y) The following pro^-isions are inserted respecting tlie auditing of accounts of banking companies. By sect. 7 (1), Once at the least in every year the accounts of eveiy banking company registered after the passing of the act as a limited company shall be examined by an auditor or auditors, who shall be elected annually by the company in general meeting. (2.) A director or officer of the company shall not be capable of being elected auditor of siich company. (3.) An auditor on quitting office shall be re-eligible. (4.) If any casual vacancy occurs in the office of any auditor the sur- viving auditor or auditors (if any) may act, but if there is no siu'viving auditor, the directors shall forthwith call an extraordinary general meet- ing for the purpose of supplying the vacancy or vacancies in the auditor- ship. (5.) Every auditor shall have a list delivered to him of all books kept by the company, and shall at all reasonable times have access to the books and accounts of the company ; and any auditor may, in relation to such books and accounts, examine the directors or any other officer of the company : Provided that if a banking company has branch banks beyond the limits of Eiu-ope, it shall be sufficient if the auditor is allowed access to such copies of aiul extracts from the books and accounts of any such ud2 404 LIMITED BANKING COMPANIES. Application of 25 & 26 Vict. c. 89, 30 & 31 Vict. c. 131, and 40 & 41 Vict. c. 26. 25 & 26 Vict. 0. 89, 30 & 31 Vict. c. 131, 40 &41 Vict. c. 26, and 42 & 43 Vict, c. 76. Privileges of act available notwithstand- ing constitu- tion of com- pany. By sect. 9, on the registration, in pursuance of tlie act, of a company wliicli has been abeady registered, the registrar shall make provision for closing the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of ^^'hich he was fur- nished on the occasion of the original registration of the company ; but, save as aforesaid, the registration of such a company shall take place in the same manner and have the same effect as if it were the first registration of that com- pany under the Companies Acts, 1862 to 1879, and as if the provisions of the acts under which the company was previously registered and regulated had been contained in different acts of parliament from those under which the company is registered as a limited company. By sect. 10, a company authorized to register under the act may register thereunder and avail itself of the privileges conferred by this act, notwithstanding any provisions con- tained in any act of parliament, royal charter, deed of settlement, contract of copartnery, cost book regulations, letters patent, or other instrmnent constituting or regu- lating the company. Limited Banks under the Companiefi Act of 1862. — As already stated, banking firms consisting of seven or more persons may register under the act with limited liability. branch as may have been transmitted to the he;id office of the banking company in the United Kingdom. (0.) The auditor or auditors shall make a report to the members on the accoimts examined by him or them, and on every balance-sheet laid before the company in general meeting during his or their tenure of office; and in every such repoi't shall state whether, in his or their opinion, the balance-sheet referred to in the report is a full and fair balance-sheet properly drawn up, so as to exhibit a true and correct view of the state of the company's affairs, as shown by the books of the com- pany, and such report shall be read before the company in general meeting. (7.) The rcmimcration of the auditor or auditors shall be fixed by the general meeting ajipointing such auditor or auditors, and shall be paid by the company. And by sect. 8 every balance-sheet submitted to the annual or other meeting of the members of every banking company registered after the passing of the act as a limited comjiany shall be signed by the auditor or auditors, and by the secretary or manager (if any), and by tlie directors of tlio romjiaTiy, "r tlirec of such directors at tlie least. UNDER THE COMPANIES ACT, 1862. 405 Since the 2iid of November, 1862, when the Companies Act of that year came into operation, limited banking companies can only be legally formed and registered under its provisions. It is the act at present in force on the subject {>/). When, tlierefore, it is proposed to establish a banking company in England, Ireland or Scotland, on the principle of having the liability of its members limited to the amount of theu* shares, or, in the words of the statute, a eomiiany limited by shares (z), seven persons at the least must subscribe a memorandum of association {a), containing the following particulars : — 1. The name of the company, with the addition of the word " limited " at the end of the name. 2. The part of the United Kingdom, whether England, Scotland or Ireland, in which the registered office of the company is situate. 3. The objects for which the company is established. 4. A declaration of the liability of the members being limited. 5. The amount of its capital divided into shares of a fixed amount. Each subscriber cannot take less than one share, and must write his name opposite to tlie number of shares which he takes {b). The memorandum must be stamped as a deed, and signed by each subscriber, in the presence of a witness, who must attest his execution {b). A company may modify or alter the memorandum, if authorized by its regidations or by special resolution, so as to increase the capital by the issue of new shares, or to consolidate and divide the capital into shares of larger («/) The Companies Act, 1879, provides for the re-registration of com- panies formed and registered under this act. See ante, p. 401. (z) 25 & 26 Vict. c. 89, s. 8. {a) Id. s. 6. See a form of a memorandum of association of a limited hank in Shelford's Law of Joint Stock Companies, 1st edit. p. 481. {b) Id. 8S. 8, 12. 40G LIMITED BANKING COMrANIES. amount than tlie existing shares, or to convert the paid- up shares into stock {c). With these exceptions, and of changing the name, as mentioned hereafter, the act pro- vides, that no other alterations shall be made by any com- pany in the conditions contained in the memorandum (c). In the case of a limited banking company, the memo- randum is usually and necessarily accompanied with articles of association prescribing and defining the constitution, business and capital of the company, the amount, allot- ment, transfer and forfeitui-e of shares, the calls, the meet- ings of members, the number of their votes, the appoint- ment, qualification, remuneration, powers and duties of du-eetors and of officers, auditing the accounts, and such other regulations as the subscribers of the memorandum may deem expedient (c/). The company may adopt, modify or exclude all or any of the provisions of Table A. given by the Companies Act{d). These provisions are usually embodied in the articles. The articles must be separately paragraphed and numbered arithmetically {d), printed and stamped as a deed, and signed by each sub- scriber in the presence of a witness (e) . The memoran- dum and articles must be delivered to the registrar for registration (./") . Upon registration they bind the company {(■) 25 & 20 Vict. c. 89, s. 12. On this section, sec the notes thereto in Buckley, p. 10 ; and Irvine v. Unio)/ Bniik of Anstralla, 2 App. Ca. 3GG ; 46 L. J., P. C. 87 ; Ashbim/ v. Eiche, L. R., 7 H. L. 0-33 ; Ander- son'' s case, 7 Ch. D. 75; MaxircWs case, L. E., 20 Eq. 585; M'Kewan's • rase, 6 Ch. D. 447. By the Compiinics Act, 1867, s. 9, a company limited by shares may, by special resolution, so far modify the conditions con- tained in its memorandum of association, if authorized so to do by its regailations as originally framed, or as altered by special resohition, as to reduce its capital ; but an order of the Court is necessary for its con- firmation. (fl) Id. s. 14. See a form of articles of association of a limited banking company in Shelford's Law of Joint Stock Companies, page 483, 1st edit. ; and Vroskcy v. Bank of Wales (Lunilcd), 4 Gift'. 314; and an epitome of a deed of settlement of an uiilinutcd banking company in Wordsworth's Mining, Banking and Insurance Companies, Appendix of Forms, 202, Gth edition. Sec a form in the Appendix to this work. (e) Id. s. 16. (/) Id. ss. 10, 17. Sect. 17 prescribes, in Table B., the fees paj'ablo on registration of the memorandum and articles, ^-iz. : — For registration of a company whose nominal capital docs £ s. d. not exceed 2,000/., a fee of 2 UNDER THE COMPANIES ACT, 1862. 407 and its members as if eacli member bad executed tbese instruments as deeds {g) . The registrar thereupon grants a certificate of the incorporation of the company by the name contained in the memorandum of association, as a banking company, limited, whose members, in the event of its being wound up, will be liable only to the anioimts remaining unpaid upon their respective shares. The cer- tificate is conclusive as to the fact of the company having complied vath. the requii'ements of the act with regard to registration {/i). The company may, by passing special resolutions in general meetings, from time to time, add to or alter the regulations contained in its articles, and these regulations are to be deemed of the same validity as if they had been originally in the articles of association. These regulations may be altered or modified by subsequent special reso- lutions (i). For registration of a company whose nominal capital ex- £ s. d. ceeAs 2,000?., the fee of 2/., with the following additional fees, regulated according to the amount of nominal capital ; (that is to say,) For every 1,000/. of nominal capital, or part of 1,000/., after the first 2,000, up to 5,000/ 1 For every 1,000/. of nominal capital, or part of 1,000/., after the fii-st 5,000/., up to 100,000/ 5 For every 1,000/. of nominal capital, or part of 1,000/., after the first 100,000/ 1 For registration of any increase of capital made after the first registration of the company, the same fees per 1,000/., or part of 1,000/., as would have been payable if such increased capital had formed part of the original capital at the time of registration. Provided that no comjaany shall be liable to pay in re- spect of nominal cajiital on registration, or afterwards, any greater amount of fees than 50/., taking into account in the case of fees payable on an increase of capital after registration the fees paid on registration. For registration of any existing unhmited banking com- pany, the same fee as is charged for registering a new company. For registering any document reqiiired or authorized to be registered, other than the memorandum of association . . 5 For making a record of any fact authoidzed or required to be recorded by the registrar, a fee of 5 [fj) 25 & 26 Vict. c. 89, s. 16. [h) Id. s. 18. ((') Id. s. 50; Ashhurtj Compcavj v. Itiche, L. K., 7 H. L. 653; 44 408 LIMITED BANKING COMPANIES. It would seem a power to borrow may be given by special resolution (/.•), but it is otherwise as to issuing preference shares {/). A copy of the memorandum, Avith the articles of asso- ciation, must be forwarded to every member at his request, on the payment of Is., or a less sum, if prescribed by the regulations of the company, for the copy. If the company neglects to forv/ard a copy, it will incur a penalty not ex- ceeding one pound (in). Name. Xamc. — A banking company must not assume or adopt the name, or what is practically the name, of an existing company, or be registered in a name identical with the name of an existing company. If by inadv'erteuce a com- pany is so registered, it may, with the sanction of the registrar, change its name, and the registrar is to enter the new name on the register, and issue a certificate accord- ingly («). Should a banking company wish to change its name after incorporation, provision is made for enabling it to do so by passing a special resolution, and obtaining the approval of the Board of Trade (o). Special provisions are made for the widest possible pub- lication of the name. The company must paint or affix, and keep painted or affixed, its name on the outside of every office or place in which it carries on business, in a conspicuous position, in letters easily legible, and must have its name engraven in legible characters on its seal, and its name mentioned in legible characters in all notices, advertisements and official publications, and in all bills of L. J., Ex. 185; A/idcn:o/i''s case, 7 Ch. D. 75, 78; Teasdalc^s case, L. R., 9 Ch. App. 51 ; Hope v. International Society, 4 Ch. D. 327, and notes to sect, in Buckley, p. HO; Lronfield SUkstone Coal Companii, 17 Ch. D. 76. (/•) Ihjron V. Metropolitan Saloon Omnibus Companii, 3 J)e G. & J. 123. (/) Jlutton V. Hearhoronqh Hotel Company, 13 W. 11. 1059. {»0 25 & 20 Vict. c. 89, s. 19. (;/) Merchant Bunking Company of London v. Merchant Joint Stock Bank, W. N., 1878, ICO; Lawson v. Bank of London, 18 C. B. 81; Hendricks v. Montague, 17 Ch. D. G38. (o) 25 «fc 2G Vict. c. 89, s. 13. i5ee Shackleford ^- Company v. Danger- field, L. R., 3 C. P. 407. CAPITAL. 409 exchange, promissory notes, indorsements, cheques and orders for money, purporting to be signed by or on behalf of the company, and in all its receipts and letters of credit {p). A penalty not exceeding 5/. will be incurred by a com- pany for non-publication of these particulars in the mode prescribed (q) . A director, manager or officer, or any person on the behalf of the company, using any but its engraved seal, or issuing any notice, advertisement, or official publication, or signing, on behalf of the company, any bill of exchange, promissory note, indorsement, cheque, order for money or letter of credit, in which the name of the company is not mentioned, will incur a penalty of 50/. He will also be personally liable to the holder of such bill, note, cheque or order for the full amount, unless duly paid by the company (r) . Registered Office. — The company must also have a registered office of business. A company not having one will incur a penalty not exceeding 5/. for every day busi- ness is carried on (s). Notice of the situation of the registered office, as well as of an}' change, is to be given to the registrar, and recorded by him. Until such notice, the company will not have complied with the act (/). Capital. — The shares of the members are personal estate, transferable according to the regulations of the company, and distinguishable by appropriate numbers {u) . But shares of deceased members may be transferred by their personal representatives, although not themselves members (.r). Notice of an increase of the registered capital of the com- {p) 25 & 26 Vict. c. 89, s. 41. [q) Id. s. 42. [r) Ibid. {s) Id. s. 39. See British Fon-ign Gas Compauy, 13 W. R. G49 ; Fur- tune Mining Company, L. R., 10 Eij. 390 ; 40 L. J., Ch. 43. (0 Id. s. 40. {ii) Id. s. 22. See notes thereto in Buckley, p. 18; TJ'cston's case^ L. R., 6 Eq. 238; Gilbert's case, L. R., o Gh. "559 ; 39 L. J., Ch. 837; Moffat V. Farqukar, 7 Ch. D. 591 ; 47 L. J., Ch. 355. {x) Id. s. 34. See London and Provincial Telegraph Compamj, L. R., 9 Eq. 653; 39 L. J., Ch. 419. 410 LIMITED BANKING COMPANIES. pany, whether the shares are converted into stock or not, must be given to the registrar within fifteen days after the resolution authorizing the increase {y). The registrar is to record the amount of the increase (//). So a company that has consolidated or divided its capital into shares of larger amount than its existing shares, or converted any portion of its capital into stock, is required to give notice thereof to the registrar (s). A company which neglects to give notice of increasing its capital within the time mentioned, and a director or a manager authorizing the same, will incur a penalty not exceeding bl. for every day of the default {a). Notice of trusts, ex- pressed, implied or constructive, cannot be entered on the register, or be receivable by the registrar {h). A certificate under the seal of the company of the shares or stock held by a member will be prima facie evidence of his title (c). Members. Mcmhcn. — The act defines the members to be subscribers of the memorandum of association, and every other person, who has agreed to become a member, and whose name is entered on the register required to be kept by the com- pany icl). The articles of association generally prescribe that a -wTitten application for shares, followed by an allot- ment, shall be deemed an acceptance of the shares. An aecei^tance in this form will be binding, and a sufficient authority for placing the name of an allottee on the re- gister. A person, who is induced to sign the articles upon a promise that is not fulfilled, or to take shares by decep- tion, is still a shareholder, and his remedy vaW be against .those who deceived him, and not against the company (e). [y) 25 & 2G Vict. c. 89, s. 34. [z) Id. 8. 28. (a) Id. 8. 34. \b) Id. 8. 30. See notes to section in Bucklej^, p. 72. (f) Id. s. 31. . {d) Id. s. 23 ; Buckley, p. 35. (c) Fdqatc's case, 11 L. T., N. S. 613; 2 Do G., J. & S. 456; ChalUs's case, L. E., 6 Ch. 266; 40 L. J., Ch. 431 ; lUshoj/s casr, L. K., 7 Ch. 296 ; 8ee, also, Oakes v. Tioqi'.aitd, L. K., 2 II. L. 325 ; and Biaqcss^s case, loCh. D. 513. ANNUAL LIST OF MEMBERS. 411 The liability of members as contributories will be sepa- rately considered. Register of Members. — The register required to be kept Register, by the company must contain the following particulars (/), viz. : — (1.) The names and addresses and the occupations, if any, of the members of the company ; a state- ment of the shares held by each member, dis- tinguishing each share by its number ; and the amount paid or agreed to be considered as paid on the shares of each member : (2.) The date at which the name of any person was entered in the register as a member : (3.) The date at which any person ceased to be a member. A company, director or manager acting in contravention of these provisions mil incm* a penalty not exceeding bl. for every day of non-compliance [g). When any portion of the shares of the company has been conveiied into stock, the register must show the amount of stock held by each member instead of shares {g) . The register will be prima facie evidence of its con- tents [h). Annual List of Members. — An annual list of all persons, who are members on the fourteenth day succeeding that on which the first of the ordinary general meetings of the company is held, must be made out, containing their names, addresses and occupations, and the number of shares held by each, and the follo\^'iug summary of par- ticulars («), viz. : — (1.) The amount of the capital of the company, and the number of shares into which it is divided : (/) 25 & 26 Vict. c. 89, s. 25. [g) Id. s. 29. (A) Id. s. 37. (i) Id. 8. 26. See Sirmz/er^s case, L. E,., 4 Ch. 475 ; Kaiice^s case, L. R., 6 Ch. 104 ; 40 L. J., Ch. 277 ; Si/fce's case, L. R., 13 Eq. 255. 412 LIMITED BANKING COMPANIES. (2.) The number of sliares taken from the commence- ment of the company up to the date of the summary : (3.) The amount of calls made on each share : (4.) The total amoimt of calls received : (5.) The total amount of calls paid : (6.) The total amount of shares forfeited : (7.) The names, addi-esses and occupations of the per- sons who have ceased to he members smce the last list was made, and the number of shares held by each of them. This list and summary must be in a separate part of the register, and completed within seven days after the day mentioned for its being made out ; and a copy forthwith forwarded to the registrar (/.•) . A company neglecting to forward the list or summary will incur a penalty not exceeding 5/. for every day, and a director or manager permitting the same a similar penalty (/) . Where any of the shares of the company have been converted into stock, the list must show the amoimt of stock held by each member instead of the amount of his shares {iii). Beef if// in (J Reejifitcr. — In case of any errors or misstate- ments being introduced into the register, provision is made for their correction. If the name of any person is entered in or omitted from the register (//), or default is made, or unnecessary delay takes place in entering the fact of any person having ceased to be a member, the person or member aggrieved, or any other member, or the company itself, may apply to a superior Court of law or equity for an order to rectify the register. The Court may refuse the application with or without costs ; or, if satisfied of its justice, may order a rectification of the register, the (A-) 25 & 2G Vict. c. 89, s. 20. (0 Id. a. 27. (in) Id. 8. 29. (>i) Id. s. 35. Sec Buckley, S0--113. ISSUING NOTES AND BILLS. 413 company to pay the costs and any damages the party aggrieved may have sustained (n). The Com-t may also decide questions relating to the title of the applicant, or arising between two or more members or alleged members {n). When the Court orders the register to be rectified, notice must be given to the registrar of the amendment or alteration (o). Inspection of Uegister. — A register of members, com- mencing from the date of the registration of the company, must be kept at its registered office for inspection by the members gratis, and by other persons on the payment of Is., or a less sum if prescribed by the company, for each inspection. A member or any other person may require a copy of the register, or of the list of members or sum- mary of particulars on the payment of QcL for every hun- dred words copied. Should an inspection or a copy be refused, the company, director or manager will incur a penalty not exceeding 2/., and an additional penalty not exceeding 21. for every day the refusal continues {})). In addition to these penalties, a judge at chambers may order an immediate inspection. The company may, by giving notice in any newspaper circulating in the district where its registered office is situate, close the register for a period not exceeding thii-ty days in each year {j)). Issuing Proniisiionj Notes and Bills of Exchange. — With respect to these instrmnents, the act provides that they are to be deemed to have been made, accepted or indorsed on behalf of the company, if made, accepted or indorsed in the name of the company by any person acting under the authority of the company, or if made, accepted or indorsed by or on behalf or on account of the company by any per- son acting under the authority of the company (y). A bill (^0 25 & 26 Vict. c. 89, s. 35. See Buckley, 80—113. (o) Id. s. 36. {p) Id. ss. 32, 33. {q) Id. s. 47. 414 LIMITED RANKING COMPANIES. Statement of assets and liabilities. of excliange addressed to a company and signed " A. B., C. D., directors of the company," was held to bind the company, and not the directors (r) . Bnt where a pro- missory note was signed by persons describing themselves as directors of a limited company, and countersigned by the secretary of the company, as follows : — "London, December 31, 1856. — Three months after date we jointly promise to pay Mr. Frederic Shaw or order 600/. for yakie received in stock, on account of the London and Birmingham Hardware Company, Limited : " it was held, that the directors who signed it were not per- sonally liable on the note (s) . A person advanced money for the purposes of a company in which he was a share- holder, and received a promissory note in the following form : " "We, the directors of the Isle of Man Slate and Flag Company, Limited, do promise to pay to Mr. J. Dutton 1,600/., with interest at the rate of 6/. per cent, per annum until paid." It bore the seal of the company and was signed by foin- directors. The lender had stated that he would advance the money to the directors only, and the Court held that the directors who had signed the note were personally liable upon it (/). Statement of Assets and Liabilities. — As a protection to creditors and others, the act imperatively requires the publication of a statement of its capital, assets and liabili- ties twice a year, and a register of the company's mort- gages to be kept. With respect to the statement, tlie act enacts, that every limited banking company shall, before it commences business, and also on the first Monday in February and first Monday in August in every year, make a statement in a form prescribed (/^), or as near thereto (>•) Olull V. Clun-lrs, 31 L. T. 822. (a) Ziiidus V. Melro.<:c, 3 H. & N. 177 ; 27 L. J., Exoh. 326. {/) Dill/on V. Marsh, 40 L. J., Q. B. \7'). Sec, also, CoriauhJ \. San- ders, 1") W. K. 90G ; Ex parte Af/ra Bank, L. E., Eq. 725. (u) Eonn (B.), Avliicli is as follows: — The capital of the company is , divided into shares of each. •REGISTER OF MORTGAGES. 415 as circumstances will admit. A copy of tlie statement is to be put up in a conspicuous place in the registered office, and in every brancli or place where the business of the company is carried on. If default is made in compliance with these provisions, the company is liable to a penalty not exceeding 5/. for every day of default ; and a director or manager permitting the same incurs a similar penalty {^v). Members and creditors are entitled to a copy of the state- ment on payment of a sum not exceeding sixpence (x). Bcgisfer of Mortgages. — All mortgages and charges sjjc- ciJicaUy affecting property of the company must be kept in a register. A short description of the property, the amount of the charges created and the names of the mortgagees or persons entitled to the charges must be entered. If these entries are not made, every director, manager or other officer, who Inioicinghj and n-UfulJij (g) authorizes or permits the omission, will incm' a penalty not exceeding 60/. (s). It would seem then the above section is du'ectory merely, and non-registration will not invalidate the mort- gage («). The iiiimber of shares issued is . Calls to the amount of pounds per share have been made, under which the sum of pounds has been received. The liabilities of the company on the first day of January (or July) were — Debts owing to sundiy persons by the company : — On judgment, £ On specialty, £ On notes or bills, £ On simple contracts, £ On estim.ated liabilities, £ The assets of the company on that day were : — Government securities \_siating them'], £ Bills of exchange and promissory notes, £ Cash at the bankers, £ Other securities, £ A deposit company is also boimd to make the above statement, (.r) 25 & 2G Vict. c. 89, s. 44. (y) Borough of Haclcneg Xeuspaper Compaynj, 3 Ch. D. 669. (z) 25 & 26 Vict. 0. 89, s. 43 ; In re Borough of Hackneg Newspaper Company, 3 Ch. D. 669. («) Ex parte Valpy, L. E., 7 Ch. App. 289. As to their right to avail themselves thereof as against creditors, see International Palp Company, Krmdes Mortgage, 6 Ch. D. 55G ; 46 L. J., Ch. 625 ; Wynn Hall Coal 416 LIMITED BANKING COMPANIES. A company deposited deeds with bank as collateral security for bills under discount, but the deposit was not accompanied with the formalities required by its articles of association upon making a charge or a mortgage, nor was the security registered. At the time of the winding up of the company it was indebted to the bank for a bill of exchange which had been discounted for the company, but which had been deposited with the bank to secure ad- vances made to various persons. The secmities comprised in the deeds had been realised; these remained in the bank's hands, after satisfying the bill which had been discounted for the company itself ; it was decided that the deposit of the deeds constituted a valid mortgage, and that the bankers, not being officers of the company within the meaning of the Companies Act, 1862, s. 165, were not bound to see that the formalities required by the articles of association had been complied with (/>). Shareholders who have mortgages made to them by the company are not bound to see that they are registered (c). This register is to be open to the inspection of creditors and members at all reasonable times. Should an inspection be refused by any officer, director or manager, a penalty not exceeding 5/. is incm-red, and a further penalty not exceedmg 21. for every day of continued refusal. A judge at chambers may order an immediate inspection of the register {d). Mcet'nujH and Minutes. — A general meeting of the com- pany must be held once at the least in every year {e). The minutes of all resolutions and proceedings of general Company, L. R., 10 Eq. 515; Kative Iron Ore Company, 2 Ch. D. 345; Ex parte National Bank, infra; In re f'iouth Durham Iron Company, 11 Ch. D. 579; 48 L. J., Ch. 4X0. (i) Ex parte National lSa}il\ L. R., 14 Eq. 507; 41 L. J., Ch. 323. As to what is sufficient registration, sec Native Iron Ore Company, 2 Ch. D. 345; 45 L. .1., Ch. 517. And as to company's power to mortgage, see I'atent File Company, L. R., G Ch. 83 ; liat/i's ease, 8 Ch. D. 334, (c) General South American Company, 2 Cli. D. 337. (rf) 25 & 2G Vict. c. 89, s. 43. (e) Id. s. 49. SPECIAL RESOLUTIOXS. 417 meetings of the company, and of tlie directors or managers, must be duly entered in books provided for the purpose (/). These minutes, if purporting to be signed by the chairman of the meeting at which the resolutions were passed or proceedings had, or by the chairman of the next meetings, will be receivable as evidence in legal proceedings (/). These minutes, when made, will be prima facie evidence of the due holding of the meetings, passing of the resolu- tions and proceedings, the appointment of directors, and the validity of their acts, notwithstanding the discovery of any defects in their appointments or Cjualifications after- wards (/). Special Hefiolutioiis. — A resolution is special when passed by a majority of not less than three-fourths of the members, entitled according to the regulations of the company to vote either in person or by proxy, at a general meeting, of which notice to propose the resolution has been given, and confirmed by a majority of such members at a subsecjuent general meeting, held at an interval of not less than fourteen daj's nor more than a month from the first meeting (y). Unless a poll is demanded by at least five members, a declaration of the chairman at the meeting-, that the resolution has been carried, is conclusive evidence of the fact, vathout proof of the number or proportion of the votes recorded in favour of or against the resolution. Notice of meetings will be deemed duly given, and the meetings duly held, whenever the notice has been given and the meetings are held in the manner prescribed by the regulations of the company. In computing the ma- jority when a poll is demanded, reference is to be had to the number of votes to which each member is entitled by the regulations of the company (g). A copy of every resolution in force must be annexed to or embodied in every copy of the articles of association if) 25 & 26 Vict. c. 89, s. G7. (ff) Id. s. 51. G. E E 418 LIMITED BAN'KTXG COMPANIES. Notices and legal pro- ccedinsrs. issued after the passing of tlie resolution (//). A company making default will incur a penalty not exceeding 1/. for each copy so issued ; and a director or a manager know- ingly and wilfully authorizing or permitting the issue will incur a similar penalty (/?). Registry of Spccicd Resolutions.— K copy of every special resolution must be printed, and forwarded to the registrar, in order to he recorded by him. If a copy is not forwarded within fifteen days after the confirmation of the resolution, the company mil incm- a penalty not exceeding 27. for every day afterwards ; and a director or a manager will incur a similar penalty (/). Notices and Legal Proceedings. — Notices, summonses, and other documents may be served by delivering, leaving or posting the same, in prepaid letters addressed to the company at their registered office (/.•) . A writ of summons cannot be so served upon the com- pany or a director, but only upon the manager or secretary of the company (/). Proof that the notices were posted in time, properly addressed and stamped, will be sufficient {m). A summons, notice or other docmnent requiring to be authenticated by the company, may be signed by any director, secretary or other authorized officer; and it is not necessary to be under the seal of the company, and may be in writing or in print, or partly in writing and partly in print {n). In actions or suits brought by the company against any member, to recover calls or moneys due from such member in his character of member, it will not be necessary to set forth the special matter, but it will bo sufficient to allege {h) 25 & 2G Vict. c. 89, s. 54. (0 Id. s. 53. [k) Id. 8. G2. (/) Toicne v. London and Lhncnck Steamship Compami, 5 C. B., N. S. 730. (w() 2.') & 26 Vict. c. 89, s. 6.'J. (>0 Id. s. G4. EXAMINATION OF AFFAIRS BY INSPECTORS. 419 that the defendant is a member of the company, and is indebted to the company in resjteet of a call made or other moneys due whereby an action or suit has accrued to the company (o) . If it appears in such action, by any credible testimony, that there is reason to believe that if the defendant be successful in his defence the assets of the company will be insufficient to pay his costs, a judge may require security for costs to be given by the company, and stay all pro- ceedings until security is given {])). The pecuniary penalties imposed by the act may be summarily recovered before justices of the peace (q). Examination of Afalrs hij Inspectors. — An examination into the affairs of a banking company maj^ often be desir- able, in cases of rumours of losses or delinquencies of directors. The act gives power to the Board of Trade, or to members, to appoint inspectors for the piu'pose of reporting thereon. In the case of the Board of Trade, the application must be made by members holding not less than one-third of the entire shares of the company (r). It must be supported by such evidence as the Board of Trade may require, for the pm'pose of showing that the applicants have good reason for demanding the investiga- tion, and that they are not actuated by malicious motives in instituting the inquiry. The Board of Trade may require secm-ity for costs to be given before appointing the inspectors (s) . It will be the duty of the officers of the company, on the inquiry, to fm-nish the inspectors -with all information (o) 25 & 26 Vict. c. 89, s. 70. \p) Id. s. 69. See Moscow Gns Company v. Inteniational Financial Society, L. E.., 7 Ch. 225; Xorthampion Coal Company \. Midland Waggon Company, 7 Ch. D. 500. {q) Id. s. 65. [r) Id. s. 56. («) Id. s. 57. E E 2 420 LIMITED BANKIXO COMPANIES. ill tlieir power, and to produce their books and documents, and the officers may be examined on oath (t). If an officer should refuse to produce the books or docu- ments, or to answer questions relating to the affairs of the company, he will incur- a penalty of not less than 61. for each offence (t). Upon the conclusion of the examination the inspectors are to report their opinion, which may be either waitten or printed, to the Board of Trade (u). A copy of the report is to be forwarded l)y the Board of Trade to the registered office of the company, and to the members at whose in- stance the inspection was demanded, if they require it. These persons will have to defray the expenses of the in- vestigation, unless the Board of Trade otherwise directs them to be paid out of the assets of the company {>(). In the case of a company being authorized by a special resolution, it may appoint inspectors to examine into the state of its affairs (.r) ; the inspectors being clothed with the same powers and entrusted with the same duties as the inspectors appointed by the Board of Trade, with this ex- ception, that their report is to be made in such manner and to such persons as the company in a general meeting of its members directs. Their officers will incur similar penalties by refusing to produce books or documents, or to answer questions, as under an examination conducted by the inspectors of the Board of Trade {.r). A copy of the report, authenticated by the seal of the company, will be admissible in legal proceedings as evi- dence of the opinion of the inspectors in relation to any matter contained in the report {//). (0 2o & 2G Vict. c. 89, 8. o8. (m) Id. 8. 59. {x) Id. s. 60. (y) Id. s. Gl. ( I'-'l ) CHAPTER XLY. CHARTERED BANKS. Banks may be formed under the 7 AVill. IV. & 1 Viet. 7 Will. iv. & c. 73, by royal charters or letters patent. The charters are ^ ^^^^' ^' ""^' obtained by petitioning the Queen in council. The petition and draft of the proposed charter are left at the Council OfSce and afterwards referred to the Board of Trade. The Colonial Office and India Office are also referred to if the proposed company falls within their departments. If it is determined that a charter shall be granted, it issues under the great seal {a) . The liability of the members is usually limited by the letters patent to the amount of their respective shares {b), and legal proceedings by or against the companies are directed to be taken and prosecuted in the name of a public officer appointed for the purpose (c). The charters are generally for limited periods, but they are renewable (d). Previously to an application to the Board of Trade for a charter, notices must be inserted in the Gazette and other newspapers (e). A bank incorporated under this act cannot be registered under the Companies Act of 1862 as an unlimited company (_/'), or, when regis- tered as a limited company, alter any provision contained in the letters patent relating to the company-, without the sanction of the Board of Trade {[/). Of recent years it has not been the policy or the practice of the government to advise the Queen to grant charters for the establishment of banking companies in the colonies or in India, preferring to leave these matters to the free action of the Colonial or Indian governments themselves. (a) Wordsworth's Joint Stock {(/) 1,1. s. 29. Companies, page 235, 6th edition. {>■) Id. a. 32. (//) 7 Will. 4 & 1 Vict. c. 73. {f) Id. s. 179. (r) Id. 8. 3 (y) Id. s. 19G. ( 422 )' CHAPTER XLYI. IRISH AND SCOTCH BANKS. With respect to Irish Banks, tlie 6 Geo. IV. c. 42, which is still in force as to banking copartnerships or societies established in Ireland under its provisions, enables them to sue and to be sued in the names of theii^ public officers, and requires a return of their members to be made to the Stamp Office. That act has not repealed the Act of the Irish Parliament, 33 Geo. II. c. 14 {a). The Irish act does not relate exclusively to persons carrying on the business of banking in the way of banks of issue, but to all bankers in Ireland (i). A memorandum accompanying a deposit of deeds made as a security for a debt, and made by a person carrying on the ordinary business of a banker is Avithin the statute, and ought to be registered to be avail- able as against creditors under a trust deed executed pursuant to the provisions of the act (/;). A deposit of deeds as security for a debt, accompanied by a memoran- dum specif}dng the purpose of such deposit, constitutes a conveyance under that statute, and might, and ought to, have been registered, even though the stoppage of pay- ment by the banker took place within one month after its date (b) . la) Contrary to the opinion of L<;rd 8t. Leonards, expressed in (/Fla- herty v. 31'JJoweU, 6 H. L. Cas. 185. Coplaml v. Bavks, 3 Ir. Eq. R. 31 ; L. R., 5 H. L. Cas. 358 ; 21 W. R. 1. The act is unrepealed, except as to" such specific matters contained in it as have been the suhjcct of special Ico-islation. The previous uuperial acts of parliament atl'ecting banking- institutions in Ireland are the 8 Geo. 1, c. 14; 33 Geo. 2, c. 14; 21 & 22 Geo. 3, c. IG ; 40 Geo. 3, c. 22; 1 & 2 Geo. 4, c. 72; and 5 Geo. 4, c. 73. The provisions of the 1 & 2 "Vict. c. 96, made perpetual by 5 «& 6 Vict. c. 85, apply to banking copartnerships established in Ireland under the G Geo. 4, c. 42. Wiicre judgment was obtained in Ireland against a public officer, a Avarrant of attorney, luider 6 (ico. 4, c. 42 s. 12, to confess judgment in England for a less sum than that for whicii judgment was obtained in Ireland, is a nullity. Walker v. M'Jhnrall, 3 Jur., N. S. 1078. The G Geo. 4, c. 42, above mentioned, is similar to' the 7 Geo. 4, c. 4G, regulating English banking copartnerships. Ih) CopUnid V. Thirks, L. R., 5 H. L. Cas. 358 ; 21 W. R. 1. IRISH AND SCOTCH BANKS. 423 The 8 & 9 Vict. e. 37, s. 30, enables banking com- panies established within fifty miles of Dublin to sue and to be sued in the name of their public officer. The 7 Greo. IV. c. 67, enabled banking copartnerships established in Scotland to sue and to be sued by public officers, and the returns of the names of theii' firms, members and officers are required to be made to the Stamp Office by these copartnerships. An omission to make these retm^ns does not, however, disentitle them to sue in this coimtry {c). In 1846, the provisions of the 7 & 8 Vict. c. 113, giving the crown powers to grant letters patent of incorporation to English joint stock banks for a term of years not exceeding twenty, were extended by the 9 & 10 Vict. c. 75, to both Irish and Scotch joint stock banks. Subsequently the 19 & 20 Vict. c. 3, fm-ther extended the provisions of the English statute in favour of Scotcli joint stock banks existing before the 9th of August, 1845, by enabling the crown to grant to them letters patent of incorporation, in perpetuity, in lieu of a liniited maximum of twenty 3^ears only. But by 17 & 18 Vict. c. 73, s. 1, banks formed under these acts, as to Scotland, the right of retention or lien over shares of partners was not to be affected, and banks may, by sect. 2, sell shares acquired by virtue of lien. By sect. 3, bills or notes were not to be signed in the manner prescribed by the 7 & 8 Vict. c. 113. In 1857, banks, which had been formed in Scotland or in Ireland under these statutes, were required by the 20 & 21 Vict. c. 49, to register under that act, and, in default of registration, they were subject to certain penalties and disabilities (f/). That act also repealed the 9 & 10 Vict. c. 75, and prohibited the future formation of banking companies either in Scotland or in Ireland, except under its provisions. In 1858, limited banking companies might be formed in Scotland or in Ireland mider the 21 & 22 {(■) Bomn- V. Mitchell, 5 Exch. 41.3 ; 10 L. J., Exch. 302. [d) 20 & 21 Vict. c. 19, s. 5. 424 IRISH AND SCOTCH BANKS. Yiot. 0. 91. In 1862, this act was afterwards repealed Ly the Companies Act, 1862(e). The latter act im- peratively requires banking companies, formed under the provisions of the repealed act, to register under the new act (/). The issue of bank notes in Ireland is regulated by the 8 & 9 Yict. c. 37, and in Scotland by tlio 8 & 9 Yict. c. 38, as abeady mentioned (g). As the provisions of the new act for the formation, regu- lation and registration of banking companies of limited or unlimited liability in Scotland and in Ireland are the same as in England, it will be only necessary to refer the reader to the previous Chapters on these subjects. {e) 25 & 26 Vict. c. 89, s. 20.3, Third Schedule, First Part. (/) Sects. 180, 209, 210. (ff) Ante, p. 326. The statute is set out in Appendix. ( 425 ) CHAPTER XLYII. COLONIAL, INDIAN AND FOREIGN BANKS, Banking institutions are generally establislied in the colonies and in India by virtue of charters from the crown, or under the authority of local laws, corresponding in a great measure with the English laws on the subject. By an act of a colonial legislatui-e, it was provided that a banking company should sue and be sued in the name of its chairman, and that execution on any judgment against the company might be enforced against the property of any member for the time being, in like manner as if the judg- ment had been obtained against such member personally. In an action against a member in this country, on a judg- ment obtained in the colony against the chairman, it was decided that the colonial legislature had authority to pass the act, and that there was nothing repugnant to the laws of England or to natural justice in enacting that actions on contracts made by the company in the colony, instead of being brought against the members individually, should be brought against the chairman whom they had appointed to represent them, and that a judgment recovered in such an action, after service of process on the chairman, had the same effect beyond the territorial limits of the colony which it would have had if the defendant had been per- sonally served with process, and, he being a party to the record, the judgment had been personally against him («). So, by an act of the Indian legislature, a banking company established at Calcutta might be sued in the name of its secretar}', and a judgment against him was to have («) Bank- of AKslralasia v. yias, 16 Q. B. 717; Bank of Australasia v. Harding, 9 C. B. 661. See Henderson \. Henderson, 6 Q. B. 288 ; Dc Cosse Brissac v. Rathhonc, 6 H. & N. 301. 426 COLONIAL, INDIAN AND FOREIGN BANKS. the same effect against the property of the bank as if reco- vered against all the members as parties on the record; and it was provided that, if an execution issued against the pro- perty of the bank proved ineffectual, execution should issue against the members successively, and if that were also ineffectual, then against any person who was a member at the time when the contract sued upon was entered into, but no execution was to be issued against any other person than the actual party to the suit without the leave of the court and notice given to the person to be charged : a creditor, having recovered a judgment in India against the secretary of the bank for a breach of contract entered into by the company there, took no further proceedings in India, but immediately brought an action against a mem- ber who was so at the time the contract was entered into, and recovered judgment in this country on the judgment and the contract, and it was held that he was entitled to do so, and to recover in respect of both causes of action {b). " It has been ui-ged," said the Court in delivering judg- ment, " that, when the defendant consented to be bound by a judgment recovered, not against himself in his own name, but against another who represented him, he should be considered as having consented only on condi- tion that proceedings on the judgment were pursued in tlie manner appointed by the act. But he must have known that that act would have no effect in this country. He therefore consented to be sued in the name of the public officer in India, and to be liable to all the consequences which might arise out of it in tliis country " (c). The production of bankers' books with the entries of the items constituting the demand, kept according to the established custom of mahajuns in India, is not of itself sufficient evidence to establish such a claim, strict proof of the debt being required {d). (b) Kehall v. Marshall, 1 C. B., N. S. 2 tl ; 26 L. J., C. P. 10. (f) Id., 26 L. J., C. P. 23, per Crcsswell, J. [d) lUii Sri Kiir!li>i V. r„!rnt, 1 1 M. (S: W. 1 1 ; 1 1 L. J., Exeli. 375. {l>) Sec auto, 1). 111. BHAXCH BANKS. 429 clieque except at that branch where he keeps his account (o) . The following cases will illustrate this rule. The holder of a promissory note presented it at the head office of the bankers of the makers for payment. They sent it to their liranch at the place where the note was payable, where the clerk cancelled the signature, wrote "paid" on the note, and transmitted a draft in respect of it to the head office. Held, that the head ofiice and branch were for this pm-- pose one and the same bank, and that the act of the clerk in transmitting the draft did not operate to charge the bank with money had and received to the use of the holder (d). But where a bill of exchange was indorsed to a Branch Bank of the National Provincial Bank of Ens'- land established at Port Madoc, who sent it to another branch established at Pwllheli, who indorsed it to the head establishment in London : it was held, in an action upon the bill by the indorsee against the drawer, that each of the branch banks was to be considered as an independent indorsee, and each entitled to notice of dishonour (f). So, where there was a banking company having branches at many places, amongst others at Grlastonbury and Bridg- water, and each branch had a separate manager, and kept sej)arate accounts with its respective customers, whom each supplied with cheque books headed with the name of the place at which it respectively carried on business, and a customer, who kept an account with the Glastonbury branch, made a payment of a debt, which he owed the de- fendant, by giving him a cheque for the amount of it on that branch, which he presented the same day at the Bridgwater branch, where he was known and where he got cash for it, and it was sent by that branch by the first post to the former branch, and delivered to them next day, but in the meantime the customer's balance with them had been drawn out, and the cheque was accordingly refused {c) Prince V. Oriental Bank Corporation, 3 App. C'a. 325 ; 47 L. J., P. C. 42. (d) Und. (<•) Clodc V. Bayhi/, 12 M. k W. 51 ; aucl linnoi v. Lnndun and Xorih Western Baihvay Company, 4 B. & S. SoO. 337. 430 BRANCH BANKS. payment, and notice of dishonour given to the defendant, who was obliged to refund in an action for money had and received brought against him by the public officer of the banking company ; it was held that the drawer of the cheque did not stand in the relation of customer to the Bridgwater branch, that the giving cash for the cheque did not amount to a purchase of the cheque by that branch, but only amounted to changing it, and that the cheque was not drawn on the company generally (/). In the absence of any special agreement or arrangement there is no obligation on a banking company to honour the cheque of a customer presented at one of its branches where he has a balance standing to his credit, v/hen he has overdrawn his account at another branch to an amount greater than such balance, so that the company is not in fact indebted to him upon the whole account. Neither is there any obligation on a banker to give notice to his customer, that he intends to transfer a balance against the customer from an account at one branch to an account at another branch (r/). "Where a firm paid a cheque into a branch bank in India to their current account after the stoppage of the parent bank in England, but before the branch had any notice of the stoppage, and afterwards, on the same da}', the branch received notice of the stoppage of the bank in England, and stopped itself, an application by the firm to be paid the amount of the cheque was refused ; but per- mission was given for a renewal of the application, if the firm should find that the cheque had not been cashed until after the branch had received notice of the stoppage of the bank in England (//). The subject of brancli banks established by tlie Bank of England has already been considered (/). (/) Woodland v. Fear, 7 El. & El. TjIO ; 26 L. J., Q. B. 202. (V/) Garndt v. M'Kexvan, 42 L. J., Excli. 1 ; L. R., 8 Exch. 14; ante, p. 199. (/*) In re Aqra and Masterinan's B/oiI:. F.x parte TFariiif/, 30 L. J., Chaue. 161; W. N. 1800, j). :?09. . ((■) Antp, p. 300. ( 431 ) CHAPTER XLIX. SHARES, CALLS AND SHAREHOLDERS. S/utres. — The shares of the momhers of banking copartner- ships or companies, whether formed under deeds of settle- ment or under articles of association, are personal property, and are generally subject to all the legal incidents which attach to personal property. The shares of a banking copartnership, established in conformity with the 7 Gfeo. lY. c. 46, the property of which consisted in part of freehold and of copyhold es- tates, and mortgages for terms of years, have been held, both at law {a) and in equity (a), to be personalty and not realty, and to be legally bequeathable to charitable pm*- poses, within the Mortmain Act, 9 Geo. II. c. 86. The shares or interests of members in companies formed under the Companies Act of 1862 are expressly declared to be personal estate, transferable in the manner provided by the regulations of the companies, and not real estate (b). The shares in all banking copartnerships are usually numbered, as they should be before being issued or allotted by limited banking companies (b) ; and the shares are represented by certificates corresponding with the numbers and amounts of the shares. A. purchased some shares in a banking company, and had them transferred into the joint names of herself and B. B. survived A., and there was clear evidence to show that A. intended the shares for B. absolutely. By the regulations of the company, however, there was no benefit of survivorship between shareholders. It was {a) Myers v. IWujal, 2 De G., Mac. & G. COO ; 11 C. B. 90 ; AMon v. Lord Lanqdale, 4 De Gex & Sm. 402. (4) 25 & 2G Vict. c. 89, s. 22. 432 SHARES, CAT.I.S AND SHAKEHOI.DERS. nevertheless held that the legal title was complete in B., and that she was entitled to them by survivorship (c). Equitable Mortgage. — Certificates for shares may be de- posited or pledged with bankers for advances (f/), but notice must be given to the company to guard against the risk of losing their lien in the event of bankruptcy ; shares not being choses in action within the Bankruptcy Act, 1869 [e). See further on this subject, p. 161, Scrip Certificate. — As to the nature of and law respecting scrip certificate, see p. 167. Sale of shares. Purchase or Sale of Shares. — By 30 Vict, c, 29, s, 1, a contract or an agreement for the sale or transfer of shares in any joint stock banking company in the United King- dom, constituted under or regulated by the provisions of anv act of parliament, royal charter or letters patent, issuing shares or stock transferable by deed or written in- strument, Vv'ill be null and void, unless the contract or agreement shall set forth and designate in writing such shares or stock by the respective numbers by which they are distinguished at the making of the contract or agree- ment on the register or books of the banking company, or where there is no such register of shares or stock by dis- tinguishing numbers, then unless the contract or agree- ment shall set forth the person or persons in whose name or names such shares or stock shall at the time of making the contract stand as the registered proprietor thereof in the books of the banking company; and every person, whether principal, broker or agent, who wilfully inserts in the contract or agreement any false entry of the numbers of the shares or stock, or any name or names other than (c) Garrick v. Taijlor, 29 Bear. 79; 30 L. J., Clianc. 211; affinned ou appeal. 31 L. J., Chanc. G8. See Hill's case, L. R., 20 Eq. 585. {d) Ex parte fiargent, L. R., 17 Eq. 273. (e) Ex parte Union Bunk of ^Lauchester, L. R., 12 Eq. 351 ; 40 L. J., Bank. 57. PURCHASE OR SALE OF SHARES. 433 that of the person or persons in whose name they stand, vdll be guilty of a misdemeanor. Joint stock banking companies are bound to show their lists of shareholders to any registered proprietor during business hours, from ten to four o'clock. These provisions do not apply to shares or stock of the Bank of England or of Ireland (,/'). A contract for the sale of shares in a banking company is not a contract for the sale of " goods, wares or mer- chandise," within the 17th section of the Statute of Frauds, so as to require a written memorandum {g) . But a note or memorandum of the contract for the sale or purchase of such shares, when to the amount or value of 51. or upwards, requires a penny stamp {/i). A person who is induced to become a purchaser of shares in a banking company under false or fraudulent representations made by the directors or others, as to the financial position and circumstances of the bank, may refuse to perform his contract (/). But if he has accepted the shares, or registered the transfer, and the bank afterwards fails, he cannot repudiate his liability as a shareholder, unless in the meantime he has avoided the contract or done that which is equivalent to avoiding it before (/). His remedy will be against the parties deceiving him for the recovery of the purchase-money and the calls which he has paid (/r). When shares, however, have been fraudulently sold by a banker vnth. whom they have been deposited for secmity, and a forged transfer regularly executed and registered, the owner has a right to have the shares delivered up to him by the purchaser, and (/) This act is printed in the Appendix. iff) Hnmblc v. Mitchell, 11 A. & E. 205. (h) Stamp Act, 1870, Sched., tit. Contract Note. By sect. 69 (1), the stamp may be denoted by an adhesive stamp, which is to be cancelled by the person by whom the note is first executed. A broker cannot recover his commission imless the contract note is so stamped. (j) Ex parte Mchol, 3 De G. & J. 387; 38 L. J., Chanc. 2.57; Oakes v. Turquand, L. K., 2 H. L. 325 ; Venezuela BaUwa'i Conipain/ v. Kisch, L. R., 2 H. L. 99 ; Stone v. Cifij and Comitij Bank, "S C. P. JD. 282 ; 47 L. J., C. P. 681. See also Arlrnght v. Kewbold, 17 Ch. D. 301. [k] Scott V. Dixon, 29 L. J., Exch. 62, n. ; Felrjatc's case, 11 L. T., N. 8. 613 ; 2 De G., J. & S. 456 ; Oakcs v. 'furquaiid, supra, and ante, p. 410. G. F F 434 SHARES, CALLS AND SHAREHOLDERS. the transfer and entry of it in the company's "books can- celled (/)• A power of attorney to sell shares does not, without express words, give authority to pledge (/»). By the regu- lations of most banking copartnerships, the consent of the directors is necessary before a shareholder can transfer his shares to a purchaser (»). It follows, therefore, when such is the case, that no con- tract can be made between a shareholder and the intended purchaser for the sale of shares, except conditionally, that is to say, the contract must be made, either in terms or impliedly, contingent on the event of the directors consent- ing to the proposed transfer; also the deed of transfer must be considered to be executed provisionally ; and the purchase-money can only be safely paid to the vendor after the transfer is registered (o) . But when the shares are bought through a stockbroker, the practice is for him to pay for the shares before that event, and he may recover the amount and stamps and commission from his employer, though the bank stops pay- ment in the interval (p). Transfer of Shares. — The 7 Geo. IV. c. 46 does not pre- scribe any form of transfer of shares. Shares in co-part- nerships established under the provisions of that statute are transferable only according to the particular mode pointed out by the deeds of settlement (^7) . Shares in bank- ing companies, formed under the 7 & 8 Vict. c. 113, are (1) Johnston V. JReafon, L. R., 9 Eq. 181 ; 39 L. J., Chanc. 390. (w) Duncuft V. Alhrccht, 12 Sim. 199. («) Ex parte Walton, 2G L. J., Chauc. 545, 518. Wlicre the consent of the directors is required it must nfit bo improperly ■withliekl, Jlobiiison v. Chartered Hank of India, L. R., 1 Eq. 32. See Kv parte Pinney, L. R., 8 Ch. 446. Qiarij, who has to procure the consent, the vendor or vendee, see Bcidcrman v. Stone, L. R., 2 C. P. 504. It is the duty of the pur- chaser to register, Coles v. Bristotve, L. R., 4 Ch. 3. Sec Marsteadv. Fu'we, L. R., 6 Ex. 132. (o) Taylor v. Stray, 26 L. J., C. P. 185, 287. \p) Stray v. Rusacll, 1 El. & Bl. 888. Iq) Bosanquct v. Shortridgc, 4 Exch. 699. MEMBERS OR SHAREHOLDERS. 435 transferable by a deed duly stamped, and in a given form, as already shown. Shares in banking companies, formed or registered under the 20 & 21 Vict. c. 49, or the 21 & 22 Vict. c. 91, on registration imder the Companies Act of 1862, are transferable in the manner hitherto in use, or in such other manner as the companies may direct (r). But shares in limited banking companies, formed and registered under the Companies Act of 1862, are transferable ac- cording to the regulations prescribed by the articles of association. The form usually prescribed is a deed attested by witnesses. Members or Share/ioldcrs. — Let us next inquire who are meant by members or shareholders. With respect to banking companies formed under articles of association, the Companies Act of 1862 defines members to be the subscribers of the memorandum of association and all persons who have agreed to become members and whose names are entered on the register of members {s). This register will be prima facie evidence of membership (t). The register, though informal, is prima facie evidence that a person whose name appears on it is a shareholder {u). The returns of theii- members which banking companies in England and Wales are required by the 8 & 9 Vict. c. 32, s. 21, to make annually to the stamp office (x), will be also admissible in evidence to establish the fact. The articles of association generally provide that proof shall be furnished to the satisfaction of the directors of the title of persons claiming shares on death, on bankruptcy and on marriage of females. Until this proof is produced, a transfer cannot be made or enforced. In copartnerships, established under the 7 Greo. IV. c. 46, the deeds of settle- ment define the persons who are or may be shareholders, (r) 25 & 26 Vict. c. 89, s. 178. (s) Id. 8. 23. See tlie notes to this section in Buckley, pp. 35 — 69. {t) Id. s. 37. See ante, pp. 410, 411. (m) Henderson v. Moijal Britiih Bank, 20 L. J., Q. B. 112, ante, p. 411. (.r) See ante, p. 332. F f2 436 SHARES, CALLS AKD SHAREHOLDERS. and prescribe certain modes and forms by wliich tbey are to become so. Therefore, where the deed requires that a transferee of shares shall be approved of by a board of directors, the approval certificate, although signed by a proper proportion of directors, is insufficient, if not given at a board, and the transferor still remains a share- holder {y) . Where the deed of settlement of the company requires certain acts to be done by persons marrying female share- holders, and certain other acts to be done by the executors of deceased shareholders, before they can respectively be- come members of the company, it is necessary that they should be shown to have performed the prescribed acts (~). The general principle, as established by numerous cases, is, that where the deed of settlement prescribes certain for- malities for effecting a transfer of shares, yet, notwith- standing the omission of these formalities, a transfer may be held binding, provided some act is done by or on behalf of the company, by which a transferee is recognized and treated as a shareholder instead of the transferor [a). But where by the deed of settlement and tlie charter of a banking company, it was provided that, upon a transfer of shares taking place, seven days' previous notice in writing of the proposed transfer should be given to the directors before any transfer could be made, and that, after the consent of the directors had been given, the transfer should be executed and delivered to the secretary to be registered, whereupon a new cei-tificate, sealed with the seal of the company, was to be delivered to the trans- feree, and the company had departed from this form, and had allowed the practice to grow up for the secretary to deliver out a blank foim of transfer without any previous notice, which was returned, after having been filled up and ((/) Bosanquet v. Shortrld(/c, 4 Exch. G99. (s) Lodgson v. Bell, 5 Exch. 9G7 ; iNm v. Armstrong, 4 Exch. 21; Kess V. Bertram, id. 19o ; Ness v. Anijas, 3 Exch. 805. (rt) Mai/]tcw''s case, 5 De G-., Mac. & G. 837 ; Gordon's case, 3 De G. «& S 249 ; Mafiuirv'scasc, 3 DcG. & S. 31 ; Watson v. Hales, 26 L. J., Chanc. 3(il ; Minra,, v. Hush, L. R., G 11. L. 37 ; 12 L. J., Ch. 586. HUSBAND AND -SVIFE, 437 executed, and laid before the court of directors, and on their giving their consent to the transfer, the transfer was registered in the proper book, and the registration indorsed on the deed of transfer, and the seal affixed to the new certificate, which was delivered to the transferee, and certain shareholders had executed transfers of their shares, but the transfers had not been registered, it was considered that the practice above njentioned operated to waive the seven days' notice only, but not the consent of the directors, and that therefore these intended transferors were still shareholders {b). Under the Companies Act, 1862, executors of a deceased Executors. holder, so long as the shares remain untransferred, are liable to be made contributories as executors (c), and are also liable as executors for calls in respect of the shares held by the deceased {d). By the Companies Act, 1862, s. 24, also, it is enacted that a transfer of a deceased member's share in a company formed under that act, made by his personal representative, is to be of the same validity as if he had been a member at the time (c). Husband and Wife. — Where a wife having separate Husband and estate contracts to take shares in her own name and on the credit of such separate estate, and there is nothing in the company's deed of settlement to exclude married women becoming shareholders, she will, on the company being woimd up, be liable to be placed on the Kst of contribu- tories in her o^^^l right, so as to bind her separate estate (./'). It would seem, however, that the husband also would be liable to be put on the list, unless by the company's rules the husband is excluded from being a shareholder in (J) Ih re Roi/al British Bank, 26 L. J., Chanc. 545. (e) See BaircVs case, L. R., 5 Ch. 725. (d) See Baird's case, supra; Souldswortk v. Evans, L. E., 3 H. L. 2G3. See sect. 76, Table A. (12.) [e) See London and Provincial Telegraph Company, L. E., 9 Eq. 653. (/) In re Leeds Banking Company, Ilathewman'' s ease, L. R., 3 Eq. 789. See, however, Pugh's case, L. E,., 13 Eq. 566 ; 41 L. J., Ch. 5S0. 438 SHARES, CALLS AND SHAREHOLDERS. As to a mar- ried woman's property in a joint-stock company. respect of the shares held by his wife, and the wife has, with the knowledge of the company, been accepted as shareholder without any intervention on the part of her husband {(j) . A husband may also be made liable where his wife has purchased shares, even although he was not aware of the purchase, and declined all along to sanction ii{h). By the Married Women's Property Act, 1870, s. 4 (/), " Any married woman, or any woman about to be married, may apply in writing to the directors or managers of any incorporated or joint-stock company that any fully paid-up shares, or any debenture or debenture stock, or any stock of such company, to the holding of which no liability is attached, and to which the woman so applying is entitled, may be registered in the books of the said company in the name or intended name of the woman as a married woman entitled to her sej)arate use, and it shall be the duty of such directors or managers to register such shares or stock accordingly, and the same upon being so registered shall be deemed to be the separate property of such woman, and shall be transferred and the dividends and profits paid as if she were an unmarried woman ; provided that if any such investment as last mentioned is made by a married woman by means of moneys of her husband without his consent, the Court may, upon an application under section nine of this Act, order such investment and the dividends and profits thereon, or any part thereof, to be transferred and paid to the husband." Spiritual persons. Spiritual Persom. — With regard to persons who may be members of banking companies ; the trade or business of banking was held to be witliin the 57 Greo. III. c. 99, "w^hich restrained spiritual persons from being occupied in [g) Sec ZiKird's case, 1 D. F. & J. 633 ; Xcss v. Angas, 3 Ex. 805 ; Buckley, p. 66 ; but see In re Loudon, Bombay and Jlaliierranean Bank, 18 Ch. D. 581. (/() Svarsbrick'scasc (Eur: Arb:), L. T. 137. (<•) 33 & 34 Vict. 0. 93. CALLS. . 439 any trade or dealings; and in the ease of Hall v. Franlilyn (J), this disability was held to extend to banking partnerships under 7 Greo. IV. c. 96, in which two of the partners happened to be clergymen. Contracts with banking copartnerships, however, of more than six persons were rendered valid, although there might be clergymen among the shareholders or partners, by an act (A-) which was shortly afterwards repealed, but was substantially re-enacted by the 4 Vict. c. 14, by which clergymen may be members, partners, or shareholders in these copartnerships, but cannot be directors, or managers, or take part in person in the business. But the law remains the same with regard to the disability of clergy- men being partners in private banks. Calls. — The deed of settlement constituting a banking company, and the articles of association, provide for the making of calls by the directors. The particular provi- sions in this respect should be strictly observed, or other- wise the calls may be invalid and incapable of being enforced. It is a usual provision that shares cannot be transferred while the calls remain unpaid on the shares. Payment of a deposit on an application for shares, or an allotment, is not a call. A call cannot properly be made until shares have been allotted (/). A call made in pur- suance of a deed of settlement of a banking company, under the 7 Geo. IV. c. 4G, was held payable before the simple contract debts of a testator {m). And under sect. 16 of the Companies Acts money due by way of calls is to be deemed to be in the natm-e of a specialty debt (n). {J) 3 M. & W. 259, 268. The 57 Geo. 3, c. 99, was repealed by 1 & 2 Vict. c. 106, s. 1 ; but the prohibition against clergymen trading is re- enacted by sect. 29. (k) 1 Vict. c. 10. {l) Croskcy v. Bank of Wales, Limited, 4 Giff. 314 ; 9 Jur., K S. 595. [in) Henderson v. GUeJnist, 17 Jiir. 570. («) 25 & 26 Vict. c. 89, s. 16. See Snek v. Eobson, L. R., 10 Eq. G29, 631 ; 39 L. J., Ch. 821. Priority of specialty debts in the administration of assets of a deceased person is now abolished, see Judicature Act, 1875, s. 10. 440 SHARES, CALLS AND SHAREHOLDERS. Where the deed of settlement of a banking company defined a shareholder and member to mean the owner of a share or interest in the capital of the company, and pro- vided that the shares should be transmissible to personal representatives, but that no executor should, as such, be a member, but that every executor might either sell his testator's shares, or constitute himself a member in respect of them by a mode pointed out by the deed, and that the directors might declare the shares forfeited, in case execu- tors did not constitute themselves members, and the deed provided for the payment of calls by shareholders, and a transferee of shares, having covenanted in the transfer deed with the trustees of the company to perform the stipula- tions of the deed of settlement, died, and his executor took no step to become a member : in a suit in equity against the executor, it was held that the company was entitled to prove as creditor in respect of a call made after the death ; for, that under the provisions of the deed, executors were placed in the position of holders of shares in the company, although not having all the rights which be- longed to an owner of shares (o) . "Where shares were specifically bequeathed to infants, and were transferred into the names of the executors of the will, and several years afterwards a call was made, it was held that it must be paid by the legatees, and not out of the testator's residuary estate (;j). The question whether a specific legatee of shares or the residuary estate is liable to calls depends iipon whether the calls are actually made before the shareholder's death. A testatrix bequeathed shares in a banking company ; before her death three calls were authorized at stated intervals, but she died before two of the periods : it was held, under the circumstances and from the practice of tlie company, tliat tlie calls were not to be considered as really made, until a call letter had been (o) Ilciiard v. V'hcalln/, 3 Dc G., Mac. &: G. G28. Sec Baird's casej L. B., 5 Ch. 725; Uonldsworth v. Evav^, L. R., 3 H. L. 263. (;;) Armdrong v. Bimictt, 20 Bcav. 421 ; 21 L. J., C'hauc. 173. CHARGING SHARES. 441 sent to the shareholders, and as to those sent after her death, the specific legatee, and not the residuary legatee, must bear the calls ((/). But it has been said, that the right principle is, that if any payments were necessary at the testator's death to constitute him a complete share- holder, they must be borne by his estate ; but if he was a complete shareholder, all calls made after his death ought to be borne by the specific legatee (;■). A shareholder in a banking company, established under the 7 Geo. IV. c. 46, devised his real estates and appointed an executor. The dividends were paid to the executor, and the shares continued in the name of the testator. After the lapse of eleven years, the company being in com^se of winding up, the testator's estate, including his devised realty, was held liable for the amount of unpaid calls (s). Charging Shares. — Shares in a banking copartnership are shares in a public company, chargeable by a judge's order, on a judgment being recovered against the pro- prietor of them, within the 14th section of the 1 & 2 Vict. c. 110, which empowers a judge at chambers to grant an order charging shares in public companies, whether incor- porated or unincorporated, provided that no proceedings shall be taken to have the benefit of such charge, imtil after the expiration of six calendar months from the date of the order. The effect of the charge by the order is the same as if the judgment debtor had himself charged the shares {t). 3 & 4 Vict. c. 82, s. 1, enacts, that the provisions of the previous act shall be deemed to extend to the interest of any judgment debtor, " whether in possession, remainder {q) Adams v. Fcrich, 26 Beav. 384 ; 28 L. J., Chanc. 514. \r) Baxi V. Bay, 1 Drew. & Sm. 261 ; 29 L. J., Chanc. 466, per Kin- dersley, V.-C. See Bevan v. Waterhead, 3 Ch. D. 752. (a) Turquand v. A'irl»/, L. R., 4 Eq. 123. [t) 1 & 2 Vict. c. 110, s. 14; per Parke, B., Graham v. ConncU, 19 L. J., Exch. 362. 442 SHARES, CALLS AND SHAREIIOLDEllS. or reversion, and whether vested or contingent "(?^), as well in any such stocks or shares as aforesaid, as also in the dividends, interest, or annual produce of such stock, &c. {v). In an action, under 1 & 2 Vict. c. 110, s. 15, for per- mitting the transfer of shares after notice of a charging order nisi, and before the making of it absolute, it is a good answer to show that the judgment debtor in whose name the shares stood had no beneficial interest in them («•) . A charging order when made absolute operates as from the date of the order nisi, and binds the stock charged as from that date (.r). Shares may be charged by a judge's order, under the 1 & 2 Yict. c. 110, s. 14, with a judgment debt, although the deed of settlement of the company provides, " that the shares should not be transferable, except by the consent of the directors :" and " that if any order or decree was made against any proprietor, by which his shares became charged, they should be forfeited to the company." This appears, from a case where the company was empowered to sue and to be sued by a public officer, vmder the 7 & 8 Yict. c. 113, s. 47, and where the Court of Exchequer, holding it to bo somewhat doubtful, whether the body was a "public company" witliin the meaning of the 1 & 2 Vict. c. 110, s. 14, refused to set aside the order which had been made (y). However, the same company, the Union Bank of London, has since been held by Lord Cranworth, V.-C, to be a public company, within the («) See Craffff v. Taylor, L. E., 2 Ex. 131, as to wliat lias been held a contingent interest within this enactment, and see also JJakcr v. Ti/iitc, 2 E. &E. 897. (i') An order under these acts may be made by any divisional court or any judge, Jud. Acts, Ord. XLVI. r. 1, who must also for tlic future recognize equitable rights incidentally appearing, Jud. Act, 1873, s. 21, subs. 4. («•) GUI V. Continental Gas Cowpamj, L. E,., 7 Ex. 332 ; Coates' case, 35 L. T. G17. (x) Hale V. Barn/, L. R., 3 Ch. 452. (V) Gra/iam v. Council, 19 L. J., Exch. 364 ; 1 L., M. & P. 438, CHARGING SHARES. 443 1 & 2 Vict. c. 110, s. 14 {z), and it may bo considered to be clear, that shares in similarly-constituted com- panies are chargeable with judgment debts of the pro- prietors. Hence shares in all copartnerships, formed under the 7 Geo. IV. c. 46, are chargeable; for the 7 & 8 Vict, c. 113, s. 47, which is still in force (a), dii-ects all judg- ments, orders and decrees to be enforced in like manner as is provided with respect to such companies carrying on business hcyond sixty-five miles from London, and the shares of companies carrying on business u-ithin sixty-five miles from London have been decided to be chargeable, it is evident the others are so also ; or, in other words, all shares in these co-partnerships are chargeable. The regis- tration of banking companies under the Companies Act of 1862, constitutes them as well public as incorporated companies, and consequently the shares of the proprietors will be chargeable under the 1 & 2 Vict. c. 110, s. 14, and 3 & 4 Vict. c. 82, s. 1 (^'). {z) M'Intijre v. Connell, 1 Sim., N. S. 225; 20 L. J., Claanc. 284; 15 Jur. 529 ; see XichoUs v. Eoseivarnc, 6 C. B., N. S. 480. («) 25 & 26 Vict. c. 89, s. 205, Tliircl Schedule, 2nd Part. [h] As to a banker's lien on shares, and as to the law relating to shares deposited with him by way of equitable mortgage, see pp. 163 ct scq. ( 444 ) CHAPTEH L. DIRECTORS. Qualification. — It is frequently prescribed in the articles of association of a company that the taking of a minimum number of shares shall be necessary to entitle a person to hold the office of director ; and questions frequently arise as to how far the acceptance of such an office amounts to evidence of an agreement to take shares under section 23 of the Companies Act, 1862. The following passage, taken from Mr. Justice Lindley's book on Partnership [a), will help to summarize the law on this subject : — " Where," he says, " by the constitution of the company a quali- fication is necessary to enable a person to hold the office of director, the acceptance by a person of that office, with knowledge that a qualification for it is necessary, justifies the inference that he has agreed with the com- pany to obtain the shares necessary to qualify him to fill the office ; and if he has not obtained such shares from some other quarter, and shares necessary to qualify him have been registered in his name, he will be a contri- butory in respect of them, although he may not actually have applied for them, or known of their allotment to him. Moreover, a person who accepts the office of director, and acts as such, must be taken to know whether any qualification for the office is necessary or not ; and such a person cannot, therefore, repudiate shares allotted to him and registered in his name in order to qualify him" {a). But where, on the other hand, he neither knows of the existence of any such qualification, and does not act as {a) See p. 1387 ; Miller's case, 3 Cli. D. GGl ; EincarcVs case, L. R., 11 Eq. 192; Fouicr's case, 14 Eq. 316; Ilarwanl's case, L. R., 13 Eq. 30; 41 L. J., Ch. 283 ; sec Buckley, p. 40. Tlioro is no presumption of law however, that a director knows the contents of the books of the company. llallmark'n case, 9 Ch. Div. 329. POWERS. 445 director, or take shares, lie is not as a general rule liable as a contributory (/>). Powers. — In inquiring as to tbe authority, powers, and liabilities of directors of a banking copartnership, it will be proper, in the first place, to premise that, in construing a deed of settlement or articles of association of one of these copartnerships or companies, the Court will, while collecting the extent of the authority intended to be con- ferred on the directors, construe it with reference to the nature of the business to be transacted, and the purposes contemplated, in order to judge what powers and authori- ties the law will imply from the nature of the office, and how far those powers and authorities are enlarged or re- stricted by any of the provisions of the instrument (c). A company is bound by the acts of its directors, pro- vided such acts are within the scope of theu" real or apparent authority. All persons dealing with banking companies must ascertain the limitations imposed by the deed of settlement, statute or articles of association, but they are not bound to draw any but direct or obvious inferences from the provisions they find there, nor is there any obligation cast upon them to see that such directors have been properly appointed, or that they have acted exactly in accordance with the manner prescribed there- in (^). Should the person, however, have knowledge of the irregularity, the company, it need hardly be said, will not be bound {e). Where the deed of settlement of a banking company expressly invested the directors with full power and autho- (5) Lindley, p. 1387. Marquis of Abercorn'' s case, 4 De G., F. & J, 78 ; Brown's case, L. E., 9 Ch. 102. {c) jBa)ik of Australasia V. Breillat, 6 Moore, P. C. 190; 12 Jur. 189. See also, as to the general principles governing the powers of directors, Spackman v. Eimns, Xi. R., 3 H. L. 171, 244. {d) Eoijal British Bank v. Tnrqmml, 5 E. & B. 240 ; 6 E. & B. 327 ; County Life Assurance Companij, L. R., 5 Ch. 288 ; Mahoney v. East Holy- ford Miniug Compan}/, L. E.., 7 H. L. 8G9 ; Bank of Australasia y. Willan, L. R., 5 P. C. 417.' {e) Iri-ine v. Union Bank of AudraUa, 2 App. Cas. 366 ; 46 L. J., P. C. 87. 446 DIRECTORS. ritj to superintend, order, conduct, regulate, and manage all and singular the affairs and business of the company, to the best of their discretion and judgment, and provided that the board of directors should, and lawfully might, from time to time, devise and make such provisions, rules, orders, and regulations, touching the government, carrying on, and management of the affairs of the company, the same not being repugnant to the general rules and regu- lations in the deed contained, as they should think ex- pedient, and that the concern should continue for 100 years : it was held, that the directors had the powers of managing partners in an ordinary banking partnership, amongst which was the power of borrowing money for the purpose of discharging the existing liabilities of the bank, till the assets could be realized ; and of discontinuing the bank, if they thought such a step essential to the interests of the shareholders ; and that their having raised a loan which they had undertaken to repay, and accompanied the engagement with other stipulations, some of which were ultra fires, did not discharge the bank; the only effect being, that such stipulations could not be enforced {g). But it seems hardly necessary to point out, that directors of a banking copartnership, whether with or without the consent of the majority of the shareholders, have no autho- rity to convert their banking company into a company for different purposes : and that money borrowed for the pur- pose of effecting that transmutation, with notice on the part of the lender, will not constitute a debt of the com- pany, for the recovery of which it can be sued (//). Nevertheless, dii'ectors may, undoubtedly,, at their dis- cretion, either discontinue altogether the business of the concern, or restrict the business to certain portions of that in which it was originally intended the bank should em- ploy its funds, if tlioy think such steps essential to the interests of the shareholders. Such a power seems neees- {g) Bank of Australasia v. DrciUat, G Moore, P. C. 152. (//) G Moore, P. C. 197. POWERS. 447 sarilj implied in the exclusive power of management, and in the power of determining what transactions should be entered into, what notes issued, what deposits received, what bills discounted, or loans made (/). The deed of settlement of a banking company provided, that when one-fourth of the capital was lost, the directors should call a meeting, and the company should be dis- solved. Considerably more than one-fourth of the capital was lost, and a meeting was called, at which the share- holders resolved to continue the bank. Further losses were made, but no such meeting was called again, but as the shareholders knew that the bank was going on after more than one-fourth of the capital was lost, the directors were not liable for continuing the bank (/ ) . But, though directors may restrict, it does not seem that, even with the sanction of a majority of the members, they have the same power to extend, the business ; e. g., if the copartnership were constituted to carry on banking business in England, they could not extend the business to India or the colonies (A-). In articles of asso- ciation, however, ample powers are now generally reserved to directors for establishing branch banks in defined loca- lities and extending agencies, as well as for amalgamating with other companies, and pui'chasing other businesses within the objects contemplated by the memorandum and articles of association (/). Although the directors of a banking company may be empowered by the articles of association to purchase or acquire the business of any other company, and to amalgamate with any other company can-ying on business with similar objects, such amalga- mation is not binding upon shareholders who do not assent to the arrangement, as neither the 161st section of the Companies Act of 1862 (;;?), nor any such provision con- (j) 6 Moore, P. C. 198. \j) Tnrqitand v. Marshall, L. R., 4 Ch. 37G. {k) See 10 Hare, 54, 55, Gl. {I) See Simpson v. Westminster Falace Hotel Company, 10 H. L. Cas. 712. \m) 25 & 26 Vict. c. 89. 448 DIRECTORS. tained in the articles of association, can have tlie effect of authorizing the directors to render their shareholders liable for the engagements of another company (ii) . But in articles of association, incorporating a banking company, the directors will not be authorized in changing materially the nature of the objects of the company as pro- posed in their prospectus (o). The following case illustrates, in some degree, the ques- tion of the nature of the business that is within the scope of banking copartnerships : — A deed of settlement of a banking copartnership pro- vided that the directors should not be fewer than five or more than seven ; that three, or more, should constitute a board, and be competent to transact all ordliuiry huniness; that the directors should have power to compound for any debt owing to the company, and accede to and execute any deed of composition, or conveyance, or assignment of his estate or effects, made by any debtor of the company, whether a shareholder or not, for the benefit of his creditors, and to give time to any debtor for the payment of his debt, either upon or without security ; and to abandon any debt which might seem bad or desj^erate. A. had purchased of the bank a colliery, of which they were mortgagees, for a sum, of which he had paid part in cash and for the balance had accepted bills which had been renewed, and of which some were in circulation, and others overdue, in the hands of persons with whom they had been negotiated by the company. He was also largely indebted to the company on the balance of his account current. Afterwards the nimiber of directors having become reduced to f om*, these four executed a deed, compounding the debt on the account cui-rent and for the (w) In re Bank of ITindiidan, Cliina and Japan, Limited, IUggs' case, 13 W. R. 937 ; 2 H. & M. GGG ; Ex parte Bafishaive, L. E.., 4 Eq. 341. See Bank of Hindustan v. Alison, L. R., 6 C. V. 54, 222. (o) In re Scottish and Unirnsnl Finance Bank, limited, iS/iip\i case, 13 "W. R. 450; aftinncd on appeal, 2 De G., J. & S. 544. Sco Uounes y. /Ship, L. R., 3 II. L. 313. CONTRACTS UNDER THE COMPANIES ACTS. 449 remainder of the purchase-money, on payment of 1,000^. by A., and his agreeing to abandon the colliery to the bank ; the directors also covenanted " on behalf of the company, so far as they could lawfully bind the company, but not further or otherwise," to indemnify A. against all such bills of exchange as had passed through the com- pany's hands. A. brought an action for not indemnifying him, when it was held that the covenant did not bind the copartnership ; for that this was not ordinary business; and no smaller number than five directors were competent to transact it ; and it was made a question whether a board of three directors could transact even ordinary business, unless it was a board of three out of five directors (7^). Contracts under Companies Act. — Banking companies incorporated under the Act of 1862, whether as limited or as unlimited companies, were legally bound only by con- tracts made by deed under their common seal ( (7). But since the Companies Act, 1867 (>•), s. 37, (1), any contract which, if made between private parties, would be by law required to be in writing, and if made according to Eng- lish law to be under seal, may be made on behalf of the company, and such contract may be in the same manner varied or discharged; (2), any contract which, if made between private persons, would be by law required to be in writing and signed by the parties to be charged therewith, may be made on behalf of the company in writing, signed by any person acting under the express or imphed autho- rity of the company, and such contract may be varied or discharged; (3), any contract which, if made between private parties, would by law be valid, although made by parol only, and not reduced into writing, may be made by {2)) Eirh X. Bell, 16 Q. B. 290. See also Mahoney v. East Hohjford Mining Compamj, L. R., 7 H. L. 869 ; 33 L. T. 383. {q) McArdhi v. Irish Iodine Companf/, 15 Ir. C. L. Rep. 146. (/■) 30 & Sl'Vict. c. 131 ; Stvift V. Wintcrhofham, L. R., 8 Q. B. at p. 251 ; Beer v. London and laris Hotel Company, L. R., 20 Eq. 412. G. G G 450 DIRECTORS. Bills and notes drawn by directors. Neoflisrence. Fraud. parol on behalf of the company by any person acting nnder tlie express or implied authority of the company, and such contract may, in the same way, be varied or dis- charged. And all contracts made according to the above provisions will be effectual in law, and be binding upon the company and their successors, and all other parties thereto, their heirs, executors or administrators, as the case may be. Bills and Notes. — Bills and notes drawn by directors on behalf of a company should appear on the face of them to be drawn on its behalf, for if there is nothing on the note or bill itself to exclude their personal liability they will be held liable. The fact that the company's seal has been affixed is not sufficient to exclude their personal liability {s) . By the Companies Act, 1862 {t), s. 42, directors of a limited company are liable to a penalty of 50/., if they sign or authorize to be signed on behalf of such company bills of exchange, promissory notes, &c., wherein its name is not mentioned as in the manner prescribed in the act. Register of Mortgages, s. 43. — Bankers do not stand in the position of officers of a company for the purposes mentioned in this section (»). Negligence. — In order to make directors personally liable for imprudence in the exercise of powers conferred upon them, it must appear that such imprudence was so great as to amount to crassa negligentia (.r). Fraud. — Directors of a company, like other agents, will be compelled to make good the truth of their representa- tions, if they induce persons to deal with them by means of («) Dutton V. Marsh, L. R., G Q. B. 361. (0 25 & 20 Vict. c. 89, s. 12. ante, p. 409. («) Kx parte Xat'wnal Banh, L. R., 14 Eq. 507, 515. See ante, pp. 415, 41G. (.r) Ovcnwl, nurncij ^- Co. v. Oibh, L. R., 5 11. L. 480. APPROPRIATING SHARES, 451 untrue representatious as to matters of fact. This rule, however, does not apply to representations as to matters of law {y). A director of a company is not liable for fraud (such as the issue of a fraudulent prospectus), committed by his co-directors, or by any other agent of the company, unless he has either expressly authorized or tacitly per- mitted its commission (s). Notice affecting Company. — The operation of the acts Notice. of parliament, relating to copartnerships established under the 7 Geo. IV. c. 46, is such as to render them qium corporations to this extent, that notice to one of the members, or even to one of the directors, provided he has, by the constitution of the company, no share or con- trol in the management of the accounts of the company, is not notice to the company {a). So knowledge of a particidar fact relating to the accounts by one director of a banking company, is not notice to the company, where that director has no voice in the management of the accounts, and the money transactions of the company are conducted exclusively by a manager under three directors, of whom the director possessing the knowledge is not one (6). But where one of the directors is clad with authority to act on behalf of the company, notice of mat- ters coming within the scope of that authority is notice to the company (c). Approimating Shares. — A transaction entered into by du-ectors, as the appropriation to themselves of shares, may be incapable of being sustained (having regard to the (v) Beattie v. Lord Ebnnj, L. R., 7 Ch. 777; 41 L. J., Clianc. 804 ; 27 L. T. 398; Feck v. Gimiey, L. R., 6 H. L. 377; 43 L. J., Chanc. 19; 22 W. E. 29. As to what amounts to frauckJent knowledge, see JFeirx. Bell, 3 Ex. D. 32, 238 ; 47 L. J., Exch. 704. {z) Cargill v. Bower, 10 Ch. D. 502 ; 47 L. J., Chanc. 649; 26 W. R. 716; Wcir\. BcU,svvpva. {(() rouch V. Page, 3 C. B. 25 ; 15 L. J., C. P. 217. [b) In re Carcw, 31 Beav. 39. (c) British and American Telegraph Companij v. Albion Bank, L. R., 7 Ex. 119; 41 L. J., Exch. 67; £x parte Agra Bank, L. R., 3 Ch. 555. G G 2 DIRECTORS. provisions of tlie deed of settlement or tlie principles of equity governing the administration of trusts) as a trans- action binding on the company, unless brought before the shareholders and confii-med by them; yet, nevertheless, the directors by the transaction, although not confirmed and notwithstanding the irregular nature of it, may bo bound as between themselves and the company. Thus, a director in a banking copartnership had regu- larly, before 1840, become owner of twenty shares, which number of shares each director was by the deed of settle- ment obliged to hold, as a qualification for the office. The deed of settlement provided, that the shares of the com- pany should be vested in the coui-t of directors, who should have full power to allot, appropriate, reserve for, or dispose of the same, to such parties, and upon such terms, and in such manner, as they might think fit : and that the execu- tor of any proprietor should not, as such, be a proprietor in respect of such shares, but he should be at liberty to dispose of them ; or the company might, upon an executor giving notice, and complying with the provisions of the deed, permit him to become the proprietor, and personally chargeable. The directors, on the 7th of August, 1840, resolved, without the privity of the shareholders, to appropriate to themselves a certain amount of additional shares— or, as they called them, " credit shares"— for wliieh they were severally to pay, by giving their promissory notes, payable to the trustees of the bank, for the amount for which each subscribed. A director agreed to take (and he gave a promissory note in payment for) one hundi-ed of these shares; he also signed a letter binding himself to pay the deposit and calls on them, but did not execute the deed of settlement in respect of them. He died in 1848, eight years after the giving the promissory note, never having paid any interest on, or any part of the principal of, the promissory note; in the books of the company, however, credit was given to APrROrRIATlNG SHARES. 453 liini in respect of dividends on the credit shares, and he was charged with interest on the promissory note. His executor was held to be rightly placed on the list of contributories, not only in respect of the twenty shares, but also in respect of the one hundred " credit shares," although the creation of the " credit shares " was not war- ranted by the deed, nor were they, in fact, ever issued or allotted. The directors, it was said, " clearly were not entitled to allot to themselves a very large proportion of the capital of the company without bringing in a single shilling in aid of that capital, only giving promissory notes, payable at some distant period, debiting themselves with interest, as it became payable on their several notes, and taking credit for the dividends to which they would properly have been entitled if they had actually made the pay- ments" {((). In another case, which arose under the same deed of settlement, a director was regularly owner of twenty shares ; he, subsequently, in pursuance of the resolution of the court of directors, took five hundred of the credit shares and gave his promissory note, payable in five years, for the amount ; he also signed a letter binding himself to pay the deposit and the calls, but did not execute the deed of settlement in respect of the five hundred shares. Three ' months after this he died. Within one month of his death his executors applied to the directors to ascertain the ex- tent of his interest in, or liability to, the company. In answer they were informed, on behalf of the directors, that their testator held twenty shares. These were, there- upon, duly transferred to a purchaser, and the directors afterwards cancelled the five hundred sliares, and the pro- {d) Ex parte Bobinson, 2 De G., Mac. & G-. 517, 520. Por cases where persons have been put on the list of contributories, notwithstanding that certain formalities rendered necessary by the deed of settlement or articles of association have not been complied with, see Bunh's casr, L. R., 6 Ch. 246; Murray v. Bush, L. R., 6 II. L. 37; 42 L. J., Ch. 586; Keene's Executors' case, 3 De G., M. & G. 272. 454 DIRECTORS. missory note for tlie amount. Eight years after tlie death of the testator, it was held that the executors ought not to be placed upon the list of contributories, for, although his estate might have been bound, if the claim had been promptly asserted at the instance of the shareholders, yet, that so long after the distribution of his assets, the loss arising from the misrepresentation of the directors must fall upon themselves and the company and not upon the estate {c). The same deed of settlement further provided and re- quired that the capital of the company should be one million sterling, divided into 20,000 shares of 50/. each, and that the proprietor of each share should bring in and pay to the company the full sum of 50/. in respect of such share, as and when called upon so to do, in manner there- inafter {i. e. in the deed of settlement) provided. The Court, therefore, gathered the intention of the parties to the deed to be " that all the shares should be actually boud fide subscribed for as upon money payments, depending no doubt upon the periods when the directors should think it right to make calls (/). The clause, that the directors were to appropriate or reserve shares, the Court thought might be considered, perhaps, as giving power to the directors " to appropriate or reserve," not in terms, but in substance, for f/iei/isclrcs and their friends, the whole of the shares ; the words are, " to such parties, and upon such terms as they shall think fit," which rather looked as if they were to deal with third parties ; but, whoever might take them, the shares could only be taken subject to a general liability to pay for them as a money transaction, altliough tho payment was to be deferred, in the shape of calls, till wanted {(j). The whole amount of the " credit shares" taken by the directors formed an enormous sum in the aggregate, and a {e) Metix's case, 2 Do G., Mac. & G. 522. (/) 2 De G., Mac. & G. 529. (•) Burnes v. Fcnndl, 2 H. L. Cas. 497, 509 ; it', v. AxpinaJI, 1 Q. B. D. 730 ; 2 Q. B. D. -IG ; and sec 21 & 26 Vict. c. 9G, s. 31, and post, Chap. LIII. 460 DIRECTORS. thereby, all assisting in the fraud are personally liable to the purchaser, though the report was signed only by the directors (s) . The criminal liability of directors and officers for issuing false reports and balance sheets will be considered in Chapter LIII. Surrender of Surrcndc)' of Shares. — Grenerally, directors have no power to accept a surrender of shares on behalf of the company. Even where the deed of settlement provides that in all cases not provided for by that or any other supplemental deed of settlement the directors may act in such manner as to promote the interest and welfare of the company, this does not enable them to cancel a retiring director's shares, so as to exempt him from liability (/). But where the deed of settlement or articles of associa- tion expressly gives such a power to the directors they may accept a siuTender (?^). A sm'render, also, may become valid by ratification by the company {x), or by all the shareholders acquiescing in the arrangement (y). But the cancellation of shares by du"ectors, where the shareholder has valid grounds to claim cancellation, is good and effectual, although the shareholder claimed such cancellation on invalid grounds, not being at the time aware of the existence of valid grounds (c), as where there («) Cullcn V. Thompson, 4 Macq. H. L. Cas. 431; 9 Jiir., N. S. 85; Feck V. Gurncy, L. E,., 13 Eq. 79 ; 43 L. J., Ch. 19. (/) Stanhope s cnsc, 3 De G. & S. 198 ; Spack)nnn v. Erans, L. R., 3 H. L. 171; M'alkvrs case, 6 Eq. 30; London and I'/wincial Coal Com- pany, h Ch. D. 52.5. By the Companies Clauses Act, 1863 (26 & 27 Vict. c. 118), s. 9, Avhich applies to all companies liaving a special act and incorporating that act, it is enacted that a company may from time to time accei)t, on such terms as they may think fit, surrenders of any shares Avhiuh have not been fully paid uji. Wee also 40 & 41 Vict. c. 26, 8 5. ' (it) See Gradifs case, 1 De G., J. & S. 488 ; SnclVs case, L. R., 5 Ch. 54 ; In re Bronfield HUkstone Coal Company, 17 Ch. D. 76. (.r) Sec Brotherhood's case, 31 Beav. 3G5 ; 8 Jur., N. S. 926; Phosphate lime Co. V. Green, L. R., 7 C. P. 43. (y) Smallcombc v. Erans, L. R., 3 H. L. 249; Uonldsworih v. Evans, ib. 263. (r) In re London and Mediterranean Bank, L. R., 7 Ch. 55. FORFEITING SHARES. 461 has been a misrepresentation as to the number of shares alleged to have been subscribed for (s). Forfeiting S/iares. — A power to forfeit shares must be Forfeiting expressly conferred by the deed of settlement or articles of association, it cannot be implied or inferred {a) . By a clause in a deed of settlement, it was provided that if a proprietor became indebted to the company in respect of cash advances or otherwise, the directors might cancel and declare forfeited, or sell, his shares, either wholly or in part, as the case might require, towards the liquidation of such debt, and such person should thenceforth cease to be a proprietor. A holder of 1,000 shares being indebted to the bank for cash advances, a notice was given to him that unless he redeemed the 1,000 shares by payment of the balance of his account within fourteen days, the directors would on that day cancel and declare his shares forfeited, and would place the value of the shares on that day to the credit of his account. The balance not having been paid, the directors passed a resolution declaring the shares to be cancelled and forfeited. The value of the shares on that day was considered by them to be 10,000/., and it was resolved that credit should be given to the proprietor for that amount in his account. He afterwards filed a bill to set aside the cancellation. The market price of the shares, on the day of the resolution, slightly exceeded that allowed by the directors, although if the shares had been carried into the market, the price would have been reduced greatly below tha,t amount. A Court of Equity decided that the directors having placed themselves in the position both of vendors and purchasers were bound to allow the highest market price which could be obtained for the shares, with- out speculating upon what might have been the effect of {z) In re London and Mediterranean Bank, L. E., 7 Cli. 55. {a) Clarke v. Hart, 6 H. L. Cas. 633 ; Hope v. International Financial Society, 4 Ch. D. 327 ; 46 L. J., Chanc. 200. As to forfeiture of shares under the Companies Act, 1862, yeo Table A, CI. 17 — 22; and as to companies governed by 8 & 9 Vict. c. 16, see sects. 29 — 35. 462 DIRECTORS. tlirowiug tlie 1,000 sliares into the market, and tlie cancel- lation was declared to be void (h) . The power to forfeit, where it exists, must be strictly construed (c) . Paying divi- Fciijinfj Bivulcnds out of Profits. — The payment of divi- profits!^" ^ dends derived from other som'ces than the profits of the company is a fraud on the part of the directors : for divi- dends are supposed to be paid out of the profits onlj^, and when directors order a dividend to any given amount, they, without expressly saying' so, yet, impliedly, do declare to the world that the company has made profits which justify such a dividend. This is a gross fraud, for whicK they are liable to be punished. In case any one, in consequence of sucli uniylied mis- representations, buys shares, and, it appearing that the concern is failing, he is injured, he may proceed against the directors by action ; they are liable, also, to be indicted in such case : even if no one can be shown to have been injm-ed, as a matter of strict law, they are liable to an indictment for a conspiracy (r/). The directors of a banking company in February, 1864, issued a report declaring a dividend of fifteen per cent, upon the shares, and a bonus of ten per cent., and a large addition to the reserve fund. In June, 1864, they offered to the shareholders the option of taking (according to the proportion of shares held by each shareholder) a certain number of reserved shares at a considerable premium. The executors of a deceased shareholder accepted some of these reserved shares. The report of February, 1864, was, in fact, utterly erroneous, and in September the bank stopped payment. No evidence of wilfulness on the part of the directors in misrepresenting the aifau-s of the com- pany was adduced. The House of Lords held, that there (i) SiiMs V. Lister, 1 Y. & C. N. C. C. 81. (c) See Clarke v. Hart, supra ; Johnson v. Lythe's Iron Agency, f) Cli. D. G87. (d) liurnes v. Pennell, 2 II. L. Cas. 524, 525; i?. v. AsplnaU, 1 Q. B. D. 730; 2 Q. B. D. 48. ANSWERING INTERROGATORIES. 463 was not enough on this state of facts to constitute a misre- presentation to avoid the acceptance of the shares, and so prevent the executors from being put personally upon the list of contributories {c). A bill was filed by a shareholder against directors of a banking company to restrain them from paying a dividend ah'eady declared, and from declaring or paying any future dividends, except out of the profits of the bank, but the other shareholders were not before the Court. The Court granted an injunction as to future' dividends, but refused to restrain the payment of the dividend that had been declared, on the ground that the declaration of the dividend gave the shareholders a legal right to the payment of that dividend, and the Court would not, in the absence of a representation by all the shareholders, interfere with that right (/). Ansicering Interrogatories. — The effect of a compulsory winding up is to take all control over the affairs of the company out of the hands of its directors, but they may still be considered to continue officers of the company, and may be ordered to answer interrogatories in an action begun after the commencement of the winding up {g) . (e) Jackson v. Turquand, L. R., 4 H. L. 305. (/) Faiccctt V. Laurie, 1 Drew. & Sm. 192. Ig) Madrid Ba»k v. Baileij, 36 L. J., Q. B. 15. ( 4G4 ) CHAPTER LI. MANAGER. Banking copaiinersliips and companies, wliere their busi- ness is extensive, or branclies are established, appoint managers. In deeds of settlement of joint stock banks formed under the 7 & 8 Vict. c. 113, a specific provision as to the appointment of a manager, or other officer to perfomi the duties of manager, is necessary [a). That statute requires the manager to make out, verify, and deliver to the stamp office, the annual returns of the title of the company, the names and places of abode of the members, directors, and manager, and the names and places of the local banks established by the principal bank {b). Legal proceedings and notices may be served upon him (c). The duties imposed by this statute upon managers of joint stock banks formed under its provisions and still in operation must be continued to be discharged by them. The subsequent acts regulating the formation of banking companies do not specifically require the appointment of managers. But when these companies appoint managers, then the penalties which the Companies Act of 18G2 imposes upon managers of limited banking companies omitting or neglecting to affix the name of tlieir company on the outside of its several places of business and branches, to sign instruments, official documents, and notices with the seal of the company, to publish the state- ments of its capital, assets, and liabilities (r/), to notify to the registrar every increase of the capital of the companj' {f) , {(i) Sect. 4, unci ante, pp. 390, 391. (i) Id. 8S. 16—18, ante, p. 385. {(■) Jd. s. 43, ante, p. 391. ((/) Ante, pp. 408—415. (<•) Ante, pp. 409, 410. DUTIES AND POWERS. 46-5 to keep the register of its members (./'), to make out and forward to the registrar the annual list of its members and summary of particulars (/), as required by that act, or refusing an inspection of the register (g), will be incrn'red by the managers. It will be their office to attend to the proper discharge of these different duties. A manager may carry on a separate business, as a mer- chant or otherwise, by the permission of the company, which is, however, unusual, and generally inconvenient; but by his so doing, he is not entitled to grant himself the same accommodation in respect of his separate trade, which he might obtain from an independent banker. It would be necessary for him, in order to sustain such a proceeding, to show that he had brought the whole cir- cumstances most fully and fairly before the directors ; it would not be enough to show merely that he had not concealed any thing ; such a proceeding, if the whole had been brought before the dii-ectors and had been assented to by them, might be permitted to stand, but only in that case (h). A manager of a banking copartnership, then, has no right to grant himself accommodation out of the funds of the bank without tlie consent of the directors, given with a full knowledge of all the circumstances. This, however, though it will prevent the company from repudiating the transaction, will, in many cases, as of course, fail to save them from loss. Thus, the manager of a branch bank, and also the exe- cutor of a testatrix, had lent 1,500/. on the security of a ship. The manager afterwards shifted the security from this ship to another ship, and in his character of executor borrowed 1,600/. from the bank, and also lent it to the owner of the latter ship, and took a mortgage of that ship, for the 1,500/. lent by the testatrix, and also for the 1,C00/., (/) Ante, p. 411. {o) Ante, p. 413. {■/i) Gu-aUcin v. Camphdl, 1 Juv., N. S. 131. G. H n 466 MANAGER, wliich lie had lent as executor. As security for the money lent to him by the bank, he, several months after the ad- vance by the bank, assigned to them this mortgage, and the mortgage debts. The last-mentioned ship was sold for 1,150/. In a suit by the residuary legatees of the testatrix against him and the bank for the recovery of this sum, the executor was held to have no right to pledge the assets ; and as he was also the agent of the bank, the bank was considered as having had notice of his inability to pledge the assets, and so could stand in no better position than he did, and the legatees were entitled, in preference to the bank, to the 1,150/. (/). Bills. Bilk. — Where a bill is drawn, accepted or indorsed by a manager of a bank, with the y^foxih per procuration, the legal eif ect of these words is to give an express intimation to every one, that the acceptance or indorsement was made under a special or limited authority, binding every one, therefore, to ascertain, before he takes such a bill, that the indorse- ment is agreeable to the authority given, according to a well-known rule respecting all such acceptances or indorse- ments. A party taking such a bill, therefore, without inquiry, if it turns out that the manager accepting or indorsing exceeded his authority, must suffer for his temerity {h). It is customary with many banking companies to com- municate, by circular to their agents and correspondents, the fact of the appointment of their manager, and his authority to sign drafts on their account, with a specimen of his handwriting. A promissor}^ note, to secure an account at a branch bank at Birmingham, of a banking copartnership, called (i) CoUinsonv. Lister, 25 L. J., Chanc. 38; 20 Bear. 356; 7 De G., Mac. & G. 634. As to a manager suing for percentage or commission against the company, see Law v. TItompson, 15 M. k W. 511. ik) Jlcxainlrr v. Macke)izic, 6 C. B. 7^6 ; Sh'fjq v. Elliott, 12 C. B., N. S. 373 ; 31 L. J., C. P. 200. Sec further, pp. 300, 301. BILLS. the National Provincial Bank of England, was given in this form: — £1,000. Birmlmjham, March 24, 1836. Three months after date we promise to pay to the Manager of the National Provincial Bank of England the sum of One thousand poiuids. A. E. C. D. E. F. At this time the National Provincial Bank of England carried on business in other places as well as in Birming- ham bj means of branch banks, but had a general board of management at London, under a board of directors, at which Eobertson was manager. Ebich was the local manager at Bhmingham-. In an action against A. B. and C. D. on this note by Eobertson, who declared, as manager of the National Pro- vincial Bank of England not styling himself public officer, it was objected, that the action should have been brought by the bank, suing by their public officer ; 'but it Avas ruled, that the facts stated were distinct evidence to go to the jmy that the plaintiff was the manager intended in the note, and that it was not open to the defendants to con- tend that the bank ought to have sued by its public officer. Judgment accordingly was given against the defendants (/) . A banking company, being the holder of bills indorsed to them in blank, may authorize their manager to sue upon such bills {m). An instrmuent, in the form of a bill of exchange, drawn on the head office by the manager of a branch bank by order of the directors, but expressed in the body of it thus, *' pay, without acceptance," may be treated as a promissory note, and the directors may be sued as makers by an indorsee or a holder (»). Duties and Aid honfij. —The pubhc officer is not neces- il) Robertson v. Sheward, 1 M. & G. 511. (;«) Law V. Farncll, 7 C. B., N. S. 282 ; 30 L. J., C. P. 17. (h) MtUcr V. T/wiiisoii, 3 M. & G. 570. II TI 2 468 MANAGER. sarily manager of the affairs of the copartnership (o), though one person may discharge both offices. Whether in any given case that is so or not, must depend, in general, upon the terms of the deed of settlement or of his appointment, which also is the source to ascertain whether any act is within the scope of the authority, or not, of the manager, or public officer. What is the authority and the extent of it are c^uestions of fact, and the answer is to be sought for in the deed of settlement, in the first instance ; if that is silent on the subject, then, evidence of what acts are usually performed by managers, or what acts the manager of the particular company has been used to per- form, as the case may be, must be resorted to (p). It will be most convenient to define in the articles of association, as carefully and fully as possible, the duties and powers of the manager, especially as regards external acts, such as the extent to which, and the form in which, he may bind the company by accepting or indorsing bills, taking up or advancing loans, &c. The situation of manager is one of high trust, but the trust becomes still greater, and the responsibility much enhanced, in the case of a local manager of a branch esta- blishment of the bank. For many purposes ho is looked upon by the law and is treated as if he were the whole body, whom he has power to bind even by his tortious acts, although he may not be a partner. For instance, if a local manager of a brancli bank gets into his hands the money of a customer of the bank by inducing the customer to consider that he is acting in the transaction as agent of the bank and is invested with au- thority to effect the purposes for which the customer con- fides the money to him, and then appropriates the money to his own purposes, the customer's loss will fall upon the copartnership. To hold the bank not to bo liable in such case would be, it has been said, to hand over the public to (o) Alexander v. Mackenzie, 6 C. B. 706. \)j) Eyre v. M'ThvclL \\ Ir. Com. Law Rep. 3U. DUTIES AND AUTHORITY, •169 the mercy of tlie clerks employed by tliese banks. The principle seems to be, that the manager is a servant whom the bank, for the puq)oses of their trade, virtually accredit and hold out to the world as invested by them with general authority to act for them in the affairs of the branch bank, and the public has no power or means to discriminate what is, and what is not, in any particular case, within the legitimate scope of the agent's powers or in accordance with the directions of his principals ; and, therefore, when a customer, in a matter connected with his relations with the branch bank, confides in the servant, he, in fact, trusts the masters and they are liable even for the fraud of the servant whom they have appointed, if committed in the course of his service {q). It is usual for customers of a bank to make inquiries through their bankers as to the commercial credit and solvency of persons with whom they intend to have mone- tary transactions, as a measure of precaution to themselves. It is within the scope of a manager's general authority to make these inquiries and to afford the requisite informa- tion. If the information is given in writing and it turns out to be false or untrue, whereby the party for whose benefit it is supplied suffers loss, the banking company will be liable as well as the manager if they are both sued together (r). Thus, the plaintiff sued the public officer of the Grloucestershire Banking Company, established under 7 Geo. IV. c. 46, and their manager at one of its branches, for a false representation with respect to the solvency of Sir William Russell. It appeared that the plaintiff was a customer of the Sheffield and Hallamshire Bank, and had requested the manager of that bank to inquire for him as to Sir William Russell's credit. The {q) Thompson v. Bell, 10 Exch. 11. See Ficker'mg v. Bml; 15 East, 53 ; Barwickv. London Joint Stock Bank, L. R, 2 Ex. 259; Mackay v. Gom- mercial Bank of Xew Brunswick, L. E., 5 P. C. 394; McGowan v. Di/cr, L. E,., 8 Q. B. 141 ; Addic v. Western Bank of Scotland, L. R., 1 H. L. 145 ; Houldsworth v. City of Glctsgow Bank, 5 App. Cas. 317. (V) Hosegood v. Bull and Kingdom, 36 L. T. 617 ; Swift v. Winterbotham, L. R., 8 Q. B. 244. 470 MANAGER. manager wrote a letter addressed to the manager of the Grioucestershire Banking Company, requesting information whether Sir William Russell was -responsible to the extent of 50,000/. The manager of that company wrote a letter, in which he signed himself as manager, giving a favour- able reply as to Sir William Russell's responsibility. The plaintiff in consequence of this letter supplied Sir William Russell with goods, for which he never was paid in eon- sequence of Sir William Russell's insolvency. The state- ment made by the manager was false to his knowledge. This company, however, had no knowledge, otherwise than through theii" manager, that such a letter liad been written, and gave him no express authority to write the letter, but the writing of such a letter Avas an act within the scope of the general authority conferred on him as manager by the company ; the Court of Queen's Bench upon this state of facts held, first, that his signature as manager was not merely that of an agent but of the banking company itself, and therefore the signature of the party to be charged within 9 Greo. IV. c. 14, s. G (s), so as to make the banking company liable for the false representation ; secondly, that the letters showed that the communications were between the two banks, and the representation was not merely the representation of the manager personally but of the banking company ; thirdly, that inasmuch as it is usual for customers of a bank to make inquiries of the description made by the plaintiff, it must be taken to have been witliin the contemplation of the banking company that the inquiry as to Sir William Russell's solvency miglit have been made on belialf of a customer of the Sheffield bank, and that the representation might be com- (s) By this Rtatutc, -wliicli is commouly cnllcd Lord Tcutcrdcn's Act, it is enacted, "That no action shall bo broug-ht ■\vhcreby to charge any person upon or by reason of any representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade or dealings of any other jicrson to the intent or pui'posc that such other persf)n may obtain credit, money or goods upon {aic in the original section), unless such representation or assurance be made in vriting, signed by the party to be charged therewith." DUTIES AND AUTHORITY. 471 mimicated to liim, aud that the banking company and their manager were liable to the plaintiff, he being tlie customer who had made the inquiry, and for whose benefit it was intended ; fourthly, that the banking company was liable for the false representation of its manager, made in the course of conducting the business of the bank; and lastly, that as all persons dii^ectly concerned in the commis- sion of a fraud are to be treated as principals, the banking company and their manager might be sued jointly {t). So again, where the plaintiff — having for some time, on the guarantee of the defendant, supplied J. D,, a customer of theii's, with oats, on credit, for carrying out a govern- ment contract — refused to continue to do so unless he had a better guarantee, the defendant's manager thereupon gave him a written guarantee to the effect that the cus- tomer's cheque on the bank in plaintiff's favour, in payment for the oats supplied, should be paid, on the receipt of the government money, in priority to any other payment, " except to this bank." J. D. was then indebted to the bank to the amount of 12,000/., but this fact was not known to the plaintiff, nor was it communicated to him by the manager. The plaintiff thereupon supplied the oats to the amount of 1,227/. ; the government money, amounting to 2,676/., was received by J. D., and paid into the bank, but J. D.'s cheque drawn on the bank for the price of the oats in favour of the plaintiff was dishonoured by the defendants, who claimed to retain the whole sum of 2,676/. in payment of J. D.'s debt to them. The plaintiff having brought an action for false representation, and for money had and received : — Held, first, that there was evidence to go to the jury that the manager knew and intended that the guarantee should be unavailing, and fraudulently concealed fi-om the plaintiff the fact Avhich would make it so ; secondly, that the defendants would be liable for such fraud in the agent; thirdl}^, that the {t) Su-lft V. Wintcrbotham, L. K., 8 Q. B. 244. 472 MANAGER. fraud was properly charged in the declaration as the fraud of the defendants {u). The arrest, and still less the prosecution, of an offender does not come within the ordinary routine of a hanking business, and is consequently not within the ordinary scope of its manager's authority (x). A manager and cashier of a bank obtained the signature of B. to a document in the form of a cheque, purporting to be drawn upon the bank by B., imder the pretence that it was a receipt for a private debt due to him from the manager. B. was an illiterate person, and unable to read, and the manager then paid B. his debt with the banker's money. The transaction was entered in the bank books, as a loan by the bank to B., upon his cheque. B. was not a customer of the banker ; it was held that the banker was not entitled to recover back the money from B., for the cheque was obtained by the fraud of the banker's agent, and that he must suffer the loss, if the manager was unable to make it good (//). That the manager of a branch bank must necessarily have a larger authority than usually attaches to agents is apparent from this : an agent, in general, has no authority implied by law independently of his particular instruc- tions to borrow money for the service of his principals in the business he conducts for them : to obtain deposits, that is, to obtain loans of money for his employers, is one principal part of the business of a manager of a branch bank ; his power, in this respect, is unlimited ; and thus he makes them responsible for every shilling which he receives from a customer of the bank. So, if he advances money on loan, the loss, if any, must fall on the shareholders of the bank : thus, in a case where the manager of a branch bank had advanced money to the agent of a mining concern, to pay the wages of the laboui-ers («) Barxvick v. English Joint Stoclc Bank, supra. {x) Bank of New South ll'ales v. Otcston, 4 App. Cas. 270. (y) Foster V. Green, 1 II. & N. 881 ; 31 L. J., Exch. 158. DUTIES AND AUTHORITY. 473 in the mine, which were in arrear, and for which they had obtained warrants of distress upon the materials, &c., in the mice, the copartnership of the bank was unable to recover the amount of the advances, by action, against a shareholder in the mine, on the ground that an agent, in general, has no implied authority to borrow money for the service of his employers, and there was no evidence of any special authority having been given by the shareholders, although the money had been applied in payment of the wages due from the shareholders to the labourers (z) . In respect of any contract into which the manager may enter on behalf of a branch bank (provided it falls within the usual course of banking business), although, under the deed of settlement, or otherwise, the manager may be restricted from entering into contracts of that particular class, there being no proof that the party, with whom the contract was entered into, was cognizant of such restriction, the copartnership will be liable (a) . Where in an action by a banking company against their late manager and cashier to recover moneys belonging to the bank, alleged to have been improperly applied, in dis- counting bills for his own advantage, for the benefit of persons and companies with whom he was connected, and in which he was interested, it appeared that such trans- actions were all in the ordinary course of the business of the bank, that he had not exceeded the power and autho- rity with which he was entrusted, and that no case of bad faith could be established against him, the Privy Council held that the action was not maintainable (b). The criminal liability of managers will be mentioned in Chapter LIU. (;) Hawtayne v. Uourne, 7 M. & W. 59.5. (a) Hauken v. Bourne, 8 M. & TV. 709 ; see Ex parte Chippendale, 4 De G., Mac. & G. 19. [b) Bank of Upper Canada v. Bradshaiv, 4 Moore, P. C. C, N. S. 406 ; L. R., 1 P. C. 479 ; and see Ward v. Greenland, 19 C. B., N. S. 527. ( 474 ) CHAPTER LII. PUBLIC OFFICER. Appowfmoif.— The 7 G-eo. lY. c. 4G (1826), which legalized the establishment of banking copartnerships in England, exceeding a radius of sixty-five miles from London, re- quired them to nominate and appoint two or more public officers, being members and resident in England, and empowered them to sue and to bo sued in the name of one of such public officers {a). The duties which this act imposes upon a public officer are the making out, verifying on oath, and delivering to the stamp office the several annual returns in the forms prescribed, as pointed out in a former Chapter (b). These provisions apply only to banking companies established beyond sixty-five miles from London. The 3 & 4 Will. lY. c. 98, which enabled banking companies to establish themselves n-ithin sixty- five miles of London, did not confer upon them the power or privilege of suing or being sued in the name of a public officer. The 7 et 8 Yict. c. 113, s. 47, first conferred this power or privilege upon these banking companies, if esta- blished before the 6th of May, 1844, provided they made out and delivered, from time to time, to the Board of Inland Eevenue, the retui^ns required by the 7 Geo. lY. c. 46, and all the provisions of such act are to apply to the accounts or returns so made out and delivered by such companies, as if they had been originally included in the provisions of the 7 Geo. lY. c. 4G. The Companies Act, 1862(f), although it repeals the 7 & 8 Yict. c. 113, ex- pressly re-enacts tlie 47th section. The appointment of (a) 7 Geo. 4, c. 46, s. 9. {b) Ante, pp. 370, 377. (V) 2.5 &. 2Q Vict. c. 80, s. 20.3. Tliird Schedule, Part II. ACTIONS AND SUITS BY AND AGAINST. 475 public ofllcers by banking companies, formed under tne provisions of the 7 & 8 Vict. c. 113, became altogether unnecessary on their obtaining charters of incorporation ; neither are public officers required to be appointed by banking companies established imder the Companies Act of 1862, as on registration these companies become entitled to all the privileges of incorporated bodies (d). The appointment of public officers, when required, is regulated by the terms of the deed of settlement of the company, and should generally be made by a deed. The appointment may be proved by a certified coj)y of the official retm'n to the stamp office, or by the production of the instrument appointing them, or even by parol evi- dence {c). Banking copai-tnerships smrendering their right to issue their own bank notes, by agreement with the Bank of England, do not lose the privilege of suing or being sued in the name of their public officer (/'). Actions and Suits. — In respect of banking companies governed by 7 Geo. IV. c. 40, all actions by or against the company must be brought by or against its pubKc officer, and not otherwise {g). In an action by a public officer, it is usual, though not essential, to allege, in the declaration, that he, at the commencement of the suit (/?), has been named and duly appointed one of the public officers of the copartnership ; but it is not necessary to state that he is a member of the company, or that he has been duly registered (/), or that he has been duly named and appointed as the nominal plaintiff on behalf of the copartnership (A-). {(1) 25 & 2G Vict. c. 89, s. 18. (t-) Edwards v. Biichauan, 3 B. & Ad. 788. (/) 27 & 28 Vict. c. 32, s. 1. \g) Steward \. Greaves, 10 M. & W. 721 ; Todd x. WrUjht, IG L. J., Q. B. 311 ; Chapman v. Milvain, b Exeh. 61. {h) Esdaile v. Maclean, 15 M. & W. 277; M'Intyre v. Miller, 13 M. & W. 725. (i) Spiller v. Johnson, 6 M. & W. 570. (V) Christie v. Peart, 7 M. & W. 491. 476 PUBLIC OFFICER. Notwithstanding the change of name of the copartner- ship, and the accession of fresh proprietors, the increase of their capital, and the addition of fresh directors, the public officer of the new copartnership is the proper person to sue on a guarantie given to the company before the alteration (/). The public officer may sue after the copartnership has suspended payment, and the establishment is kept open only for the purpose of winding up {m) . A copartnership having become insolvent, and ceased to carry on business, the public officer instituted a suit in equity, charging some of the directors with losses, by reason of unauthorized speculations in shipping, and of a fraudulent transaction by a deed of arrangement with a debtor to the company, praying relief in respect of all these matters, and to have the deed set aside. The suit was considered to have been properly instituted by the public officer, although the company had ceased to carry on business ; that directors and trustees, not charged with improper transactions or fraud, need not be made parties to the suit ; but the manager, who, it appeared, was mixed up in these transactions, ought to be made a party ; and that tliough there wore several distinct transactions, they were properly comprised in a single suit (>?). So, when a wan*ant of attorney has been given to the trustees of the copartnership to secui'C a debt due to the co- partnership, the judgment thereon can only be entered up in the name of the public officer (o) . So the public officer is to sue on a breach of covenant with trustees of the copartnership to pay calls (p), and, in general, is the only proper party to sue on all covenants in the deed of settlement ; although the covenants are made with trustees (q). (/) Wihon V. Craven, 8 M. & W. 584. {m) Davidson v. Cooper, 11 M. & W. 778. hi) llarrisun v. Brotcn, 5 Do G. & S. 733. \o) lldlv. Fish, 12 C. B. 493. (>) Wills V. Sutherland, 4 Excb. 211. (ij) Chapman v. Milvain, 5 Exch. 61. LIABILITIES. 477 But a note payable to tlic order of a person who is a trustee for the comjDany must, if unindorsed, be sued upon by the payee, and not by the public officer of the com- pany (;•). The company will not be bound by a judgment in an action by a person not at the time their public officer (-s-) . If a defendant, in an action pm^j^orting to be brought by a public officer of a a company, traverses his appoint- ment as public officer, and has a verdict on that issue, it is a good defence (s). * The public officer may file a petition for adjudication of bankruptcy or sue out a judgment debtor summons against a debtor indebted to the copartnership, provided, in the declaration signed by him, he declares that he is such public officer, and entitled to sue {t). So he may prove on a bankrupt's estate in like manner {i<). Both the public officers cannot sue together ; but if they are joined, an amendment by striking out the name of one will be allowed (x) . Liabilities. — In an action in which a public officer sues on behalf of the company, interrogatories may be admi- nistered to him, and he must answer them {>/). When an action is brought against the public officer of a copartnership, as such, he will not be permitted to plead that he has become bankrupt, for he is a mere parlia- mentary defendant ; he represents the interests, j)erhaps, of several hundred persons, and, if he were to be allowed to {)■) M'Dowcll V. Doffle, 7 It. Com. Law Rep. 598. {s) Jiarneivall V. Sutherland, 19 L. J., C. P. 292. See Patcrson v. Iron- side, 14 Jul'. 722. {t) Bankruptcy Act, 1869, s. 80, par. 7. {>() Id. s. 144. See a form of affida\dt of proof of debt by a public officer in. Schedule of Forms, p. 212, Roche & Hazlitt's Bankruptcy Act, 1869. {x) Holmes v. BUuieij, 6 Scott, 346 ; 4 Bing. N. C. 454. As to suing both, 16 M. & W. 669. (y) M'Knu/a v. Holt, 28 L. J., Exch. 380; 4 H. & N. 738. See Judicature Acts, Ord. XXXI. r. 4. 478 rUBLIC OFFICER. plead such a plea, of a matter merely personal to himself, in bar of the action, he would confer the benefit of that defence on all those whom, as a matter of form, he repre- sents as defendants. In such a case, however, the plaintiff would be restrained from issuing execution against the defendant, or his estate (y). Nor does attachment lie against him (s). Accordingly, it has been held that where a deed of settlement provided, that if any of the public officers became bankrupt he should become disqualified, and his office should become vacant, the proper construction was not that the person should cease to be public officer abso- lutely, but only at the election of the company {a). If bankruptcy, per se, disqualified, the company could have had no election. So, a person sued as public officer will not Ije allowed to plead that he is not public officer, iocjether with other pleas going to the merits of the action. He may rely on that plea as his sole defence, if it is capable of proof ; but, as the company are the real defendants, they must rely on such defence as they have to the merits of the action ; they cannot be allowed to turn the plaintiff round on so mere a matter of form as whether the defendant was public officer at the commencement of the suit [h). But in an action by a public officer, a plea denying that the copart- nership was at the commencement of the action carrying on the trade or business of bankers, in addition to pleas of non assumpsit and of accord and satisfaction, will be allowed (c). Death, Resignation or Removal. — The death, resignation, or removal of a public officer will not abate any action, (y) Steward V. Lunn, 11 M. & W. C3. (2) Corpe V. Ghjyi, 3 B. & Ad. 801. («) Steicard v. Duuii, 12 M. & W. 6.>5. (b) Xeedham v. Law, 11 M. & W. 400. Qiicvrc, whethor tlii.s is so now under the powers of alternativo pleading given by Ord. XIX. r. 8, of the Judicature Acts, 1873, 187o. Sec also rule 11 of that Order. (f) Itoew Fuller, 7 Kxch. 220; 21 L. J., Exrh. 101. JUDGMENT AGAINST. 479 suit, or proceeding commenced by or on the behalf of or against the copartnership, but the same may be continued, prosecuted, and carried on in the name of any other of the public officers of the copartnership for the time being ((/). If the public officer dies during the progress of an action, a suggestion of his death, and of the appointment of his successor, should be entered on the proceedings before the next step is taken, otherwise they may be set aside for informality (c). A cognocit actionem, given to a public officer, was con- sidered to be sufficient, after his removal,- to authorize a succeeding public officer to enter up judgment in his own name (/). To enter it up in the name of the officer, in whose time the cognovit was given, would be erroneous (^). "When the public officer dies after judgment obtained in an action, and after the issuing of a writ of ca. sa., but before its execution, this does not cause the action, or the proceedings consequent on it, to abate, and, therefore, it was held, a defendant could be taken in execution {//). In equity, it was ruled, as there was no change of interest, it was unnecessary to file any supplemental bill, in order to make a new registered public officer a party to the suit (/). Judgment against. — When a plaintiff obtains judgment against a public officer, he may issue execution against him without first suing out a scire facias, for he is already a party to the record (Ic) . {(I) 7 Geo. 4, e. 46, s. 9. And see now Jud. Acts, Ord. XIX. r. 13, and Ord. L. rr. 1, 4. (e) BarneicaU v. Sutherland, 19 L. J., C. P. 290; 14 Jur. 720; 9 C. B. 380 ; Faterson v. Ironside, 14 Jur. 722, n. See Jud. Acts, Ord. L. and Crane v. ZoftKs, 24 W. R. 93. (/) This seems to be the effect of the judgment in Webb v. Taylor, 1 I). & L. 676. But a judge's order by consent has now almost entirely superseded the practice of cognovits. See Archibald's Practice, pp. 248, 249. [g) See 1 D. & L. 687 ; rrohbi v. Loeo'clc, 1 Dowl., K S. 197. [h) Toddy. Wright, 16 L. J., Q. B. 311; Ellis v. Griffiths, 16 M. & W. 106. (0 Butchart v. Dresser, 18 L. J., Chanc. 198 ; 10 Hare, 453. [k] Haruood v. Law, 7 M. & W. 203. 480 PUBLIC OFFICER. Indemnitij. — A public officer, in whose name any suit or action has been commenced, prosecuted or defended, sustaining any loss, damages, costs, or charges will be entitled to reimbursement out of the funds of the copart- nership, or, in failure thereof, to contribution from the other members, as in a case of an ordinary partnership (/). Criminal Proceedings. — Prosecutions by public officers on behalf of the company, and their criminal liability, will be treated of in the next Chapter. (/) 7 Geo. 4, c. 4G, s. 14. ( 481 ) CHAPTER LIII. CRIMINAL LIABILITY OF MEMBERS AND OFFICERS OF BANKING COMPANIES. The members of the copartnerships either established beyond sixty-five miles from London under the 7 Geo. 4, c. 46, or established in London, or within sixty-five miles of London imder the 3 & 4 Will. 4, c. 98, s. 3, may be prosecuted in the name of their public officer for any mis- demeanor' or felony committed by them against these co- partnerships as if they were actually strangers {a) . A clerk may therefore be convicted of embezzling or stealing the property of one of these copartnerships, although he is a shareholder {b) . The property may be alleged in an indictment for larceny or for embezzlement to belong to one of the public officers or of one of the members named and others (c). The members of banking companies formed under the 7 & 8 Yict. c. 113, or registered under the 20 & 21 Yict. c. 49, or the Companies Act, 1862 (d), committing fraudulent or other criminal acts against theii' company will be liable to prosecution at the suit of and in the registered or corporate name of that particular company. The legislature has created certain specific acts of directors, members, managers and public officers, misde- meanors, to which it will be necessary to refer in detail. It may be mentioned that banking co-partnerships formed under the provisions of the 7 Geo. 4, c. 46, are public companies {c) ; and banking companies registered (ff) 3 & 4 Vict. c. Ill, s. 2 ; made perpetual by 5 & 6 Vict. c. 85. {b) Req. V. Atkinson, Car. & M. 525 ; 2 Mood. C. C. 278. (c) 7 Geo. 4, c. 64, s. 14; Meff.v. Fritchard, 30 L. J., M. C. 169 ; 8 Cox. C. C. 461. {d) See sect. 18. (e) See 3I'Iiityre v. Conndl, 20 L. J., Clianc. 284; Graham v. Conncll, 19 L. J., Exch.361. G. II 482 CRIMINAL LIARILITY OF MEMBERS AND OFFICERS. under the Companies Act, 1862, are bodies corporate witliin tlie scope of tlie following enactments. Fraudulenthj (qyproijriating the Property of the Com- pa)vj. — A director, member or public officer of a body corporate or public company who fraudulently takes or applies for his own use or benefit, or for any use or pur- poses other than the use or purposes of the body corporate or public company, any of the property of the body corporate or public company, will be guilty of a misde- meanor (/). Keeping Fraudulent Accounts. — A director, public officer or manager of a body eor[iorate or public company, who receives or possesses himself of any of the property of the body corporate or public company, otherwise than in payment of a just debt or demand, and with intent to defraud omits to make, or to cause or direct to be made, a full and true entry thereof in the books and accounts of the body corporate or public company, will commit a mis- demeanor (r/). Falsifying or destroying Accounts or Documents. — So a director, manager, public officer or member of a body corporate or ];)ublic company who, Avith intent to defraud, destroys, alters, mutilates or falsifies any book, paper, writing or valuable security belonging to the body corporate or public company, or makes or concurs in the making of any false entry, or omits or concurs in omitting any material particular in any book of account or other document, will be guilty of a misdemeanor {It). Publishing fake Statements or Balance Sheets. — A di- rector, manager or ]iublic officer of a body corporate, or (/■) 21 & 2.') Vict. c. '.((I, s. Kl. (//) hi. s. s-j. (/,) /,/. s. ,s:!. PUBLISHING FALSE STATEMENTS OR l^.A LANCE SHEETS. 483 public company, making, circulating or publishing, or con- cm-ring in making, circulating or publishing any written statement or account which he shall know to be false in any material particular, with intent to deceive or defraud any member, shareholder or creditor of the body corporate or public company, or with intent to induce any person to become a shareholder or partner therein, or to intrust or advance any property to the body corporate or public company, or to enter into any seeiuity for the benefit thereof, will be guilty of a misdemeanor (/) . A false representation by an* officer or a servant of a company, even though when made at the bank, is not for criminal pui-poses the representation of the company (/.•). A false representation, in order to be the representation of the company, must be made by a report adopted at a general meeting, and put forth to the public either inten- tionally or circulated in the ordinary course of business (A-) . The directors of a bank are liable also to be indicted for a conspii'acy to defraud by publishing false balance sheets, and circulating false reports as to the condition and solvency of their bank, and issuing new shares to the public, at a time when they know the bank to be in a state of insolvency. The manager will be equally liable with the directors under such circumstances, where he has the chief control and management of all the affair's and trans- actions of the bank [l) . When the manager and the secretary of a banking com- pany were indicted for making and publishing false state- ments of the affairs of the bank, and conspiring together to do so, the prosecutors were put to their election as to the counts on w^hich they would rely, and having elected to rely on the counts for conspiracy, it .-^^as not enough to (i) 24 & 25 Vict. c. 96, s. 84. (/.•) Ex parte Froicd, 9 W. R. 328 ; 3 L. T., N. S. 843. (/) Hpff. V. i:sdaile, 1 F. & F. 213 ; 7 Cox, C. C. 442, and tlie report of the trial of The Aftornci/- General v. Brown and others, coram Lord Camp- hell, C. J., Feb. 1858, "by J. C. Evans, Esq., and published by Messn?. Stevens & Norton, BeU Yard. See also R. v. AxninaH, 1 Q. B. D. 730 ; 2 Q. B. D. 48 ; 46 L. J., M. C 145. I T 2 CRIMINAL LIABILITY OF MEMBERS AND OFFICERS. prove that they made and put fortli statements intended and calculated to deceive, unless they had entered into a precedent and fraudulent conspiracy to do so {>u). With respect to the foregoing misdemeanors, it is pro- vided, as in the case of bankers fraudulently misapplying or disposing of securities or property intrusted to their care, that the parties are not to be privileged from answer- ing questions in relation to the charges in any civil pro- ceedings, but on making disclosm-es in any compulsory proceeding they are not liable to a criminal prosecution {n). Neither is any criminal prosecution for the commission of any of these misdemeanors to affect or to prejudice any remedy or right at law or in equity against the delinquent parties (»). Comdctions (o) are not, however, to be admis- sible in evidence in civil proceedings (p). The Companies Act of 1862 provides for the prosecution of dii-ectors and other officers, found, on the winding-up of a company, to be delinquents. The following are the provisions relating to this subject : — Poicer of Court to assess Damages. — If, in the com-se of winding-up proceedings, it should appear that a past or present director, manager or officer, has misapplied or re- tained or become liable or accountable for any moneys of the conipan}', or has been guilty of misfeasance or breach of trust in relation to the company, the Court may, on the application of a liquidator or of a contributory or of a creditor, notwithstanding that the offence is one for which the offender is criminally responsible, examine into the conduct of the director, manager or officer, and compel him to repay the moneys so misapplied or retained, or for (;«) Reg. V. Binrh, 4 F. & F. 407. («) 24 & 25 Vict. c. 9G, ss. 8o, 86. See R. v. Skcen, 28 L. J., M. C. 91, and ante, p. 289. (•). Prosecution of Delinquent Directors. — "Where there is an order for winding up a company by the Court, or subject to the supervision of the Com-t, if it should appear in the course of such winding-up that a past or present director, manager, officer or member, has been guilty of any offence in relation to the company for which he is criminally responsible, the court ma}", on the apphcation of any person interested in the winding-up or of its own motion, direct the official liquidator or the liquidator (as the case may be) to institute and conduct a prosecution or prose- cutions for such offence, and may order the costs and expenses to be paid out of the assets of the company (s). This application must be made by petition {f). Prosecution of delinquent Directors, Officers or Members, under a voluntary Winding-n}). — Where the winding-up is {q) 25 & 26 Vict. c. 89, s. 165. Bankers of a company are not officers of the company -within the terms of this section. In re Imperial Land Company of Marseilles, 39 L. J., Ch. 331. (»•) Id. s. 166. («) Id. s. 167. (0 Gen. Orel. 1 1th November, 1862, r. 51. 486 CRIMINAL LIAI'ILITY OF iMEMRERS AND OFFICERS. altogether voluntary, if it should appear to the liquidators that a past or present director, manager, officer or member, has been gnilty of any offence in relation to the company for which he is criminally responsible, it shall be lawful for the liquidators, with the previous sanction of the Court, to prosecute such offender, and all expenses pro- perly incun-ed in the prosecution will bo payable out of the assets of the company, in priority to all other lia- bilities (?/)• The application to the Court for the purpose of insti- tuting the prosecution must be by petition (,r) . In the above provisions a liquidator abusing his trust or office is included {//). («) 25 & 2G Vict. c. 89, s. 168. (.'■) Glen. Ord. 11th November, 1862, r. ol. (y) 25 & 26 Vict. c. 89, s. 165. ( -i^r ) CHAPTER LIV. ATTACHING FUNDS IN TJANKEr's HANDS. By the Judicature Act, 1875, Orel. XLY. r. 2, it is enacted that " the Court or a judge may, upon the ex parte appli- cation of a judgment creditor, either before or after oral examination, and upon afhdavit by himself or his solicitor stating that judgment has been recovered, and that it is still unsatisfied, and to what amount, and that any other person is indebted to the judgment debtor, and is within the jurisdiction, order that all debts owing or accruing from such third person (hereinafter called the garnishee) to the judgment debtor shall be attached to answer the judgment debt ; and by the same or any subsequent order it may be ordered that the garnishee shall appear before the Court or a judge or an officer of the Court, as such Court or judge shall appoint, to show cause why he shoidd not pay the judgment creditor the debt due from him to the judgment debtor, or so much thereof as may be suf- ficient to satisfy the judgment debt." This is taken from sect. 61 of the C. L. P. Act, 1854. A customer's balance may be attached by a judgment creditor of the customer to answer his judgment debt {a). By Pule 8, " Service of an order that debts due or accruing to the judgment debtor shall be attached, or notice thereof to the garnishee, in such manner as the Court or judge shall direct, shall bind such debts in his hands" {b). (a) Sojmour v. Brecon Corporation, 29 L. J., Ex. 243 ; In re Fritchard, 2 De G-., r. & J. 354. See also judgments in Mayor of London v. London Joint Stock Bank, 6 App. Cas. 393. A garnishee order nisi does not create a charge until service of it on the garnishee. Jfaincr v. Gihs, 11 Ch. D. 942; 48 L. J., Chanc. 508. (A) The debt must be an absolute and not a conditional one. ItoueU V. Jfcfrojio/ifaj/ iJi^'tr'rt BaHa-ai/, 19 Ch. D. 508. 48S ATTACHING FUNDS IN HANKEu's IIANUS. By Rule 4, "If the garnishee does not forthwith pay into Court the amount due from him to the judgment debtor, or an amount equal to the judgment debt, and does not dispute the debt due or claimed to be due from him to the judgment debtor, or if he does not appear upon summons, then the Court or judge may order execution to issue, and it may issue accordingly, without any pre- vious writ or process, to levy the amount due from such garnishee, or so much thereof as may be sufficient to satisfy the judgment debt." By Rule 8, " Payment made by, or execution levied upon, the garnishee under any such proceeding as aforesaid shall be a valid discharge to him as against the judgment debtor, to the amount paid or levied, although such pro- ceeding may be set aside, or the judgment reversed" {a). In the city of London funds in the possession of bank- ing partnerships, other than banking corjiorations, are liable to the process of foreign attachment, as existing in the Mayor's Court, though the process must be strictly pur- sued according to the custom. Fictitious summonses and returns, as formerly resorted to, will render the suit invalid {b) . This process is much more extensive in its operation within the ambits of the city jurisdiction, than an attachment of debts under the provisions of the Judi- cature Act already mentioned (r). Under that statute, it will be observed, debts cannot be attached until judgment has been obtained ; Avhereas, under the custom of the city, debts are attachable for the purpose of compelling the defendant to appear and put in bail to the action in the Lord Mayor's Court (r). Until a city attachment has been dissolved or withdi'awn, a banker cannot part with or pay away funds belonging to his customers {c) . As regards banking corporations, the recent case decided in the House of Lords {h) has now clearly settled that this process is a (a) See Jfotvdl v. Mtfropolitaii District Bailwaij, supra. {b) Mai/or of London v. London Joint Stock Bank, supra, (r) See Braiidon on ForeinTi Attachment. ATTACHING FUNDS IN BANKER's HANDS. 489 personal one, and cannot be applied to a corporation aggre- gate. Funds of foreign governments, in the hands of bankers as their agents for the payment of the dividends on foreign bonds or stocks, are not attachable at the suit of the creditors of such governments (r/). Accounts kept by collectors or receivers of government taxes with bankers may be seized under a writ of extent at the suit of the Crown against the bankers {c). So, an extent may be issued against a banker, with whom a col- lector has deposited promissory notes or bills of exchange taken by him in payment of taxes {e). If a collector pays moneys received by him for taxes to a third party who pays the same into his private account with his bankers, and the bankers have knowledge of the fact that the moneys are the moneys of the Crown, an extent may issue against the bankers for the recovery of such moneys (./) . If by the terms of the deposits interest is payable by the bankers, that is also recoverable by the Crown (e). Recently it has been alleged that there is a custom among bankers who have discounted their customer's bill of ex- change, upon the acceptors suspending payment before their maturity, to call upon their customers to take them Tip, or, failing to do so, to retain their balances in their hands to meet the liability on the cmTcnt bills (g). The custom has been denied, and its validity in point of law may be open to considerable doubt. The case in which the custom was alleged to exist was compromised and apparently in favour of the customer and against the claim, and consequently no decision was given (g). By the National Debt Act, 1870, consols and other public stock are not liable to foreign attachment by the custom of London or otherwise {h) . (d) Wadsworth v. The Queen of Spain, 17 Q. B. 171. \e) Reg. v. Adams, 2 Exch, 299. (/) Reg. V. Ward, 2 Exch. 301, n. {g) Agra and Mastermaii''s Bank, Limited v. llnffman, 13 W. R 22G ■ 11 L. T., N. S. 701; 34 L. J., Chanc. 28.5, coram Stuart, V.-C. (A) 33 & 34 Vict. c. 71, s. 10. ( 490 ) CHAPTER LV. WINDING-UP AND DISSOLUTION OF BANKING COMPANIES. AVe propose in this chapter to state the general outline of the law applicable to the winding-np of banking copart- nerships and companies, unable to meet their engagements or to cany out the objects for which they were promoted. For more detailed information, and for the cases decided on the various sections of the Comj)anies Act, the reader must be referred to those works expressly dealing with Company law. Banking copartnerships constituted under the 7 Greo. lY. c. 46, or under the 3 & 4 "Will. IV. c. 98, or, as to Ireland, under the 6 Geo. IV. c. 42, and not registered as limited or unlimited banking companies under the Com- panies Act of 1862, must be wound up under the provi- sions of that statute as unregistered companies {a) . And bauldng companies formed under the 7 & 8 Vict. c. 113, or mider the 21 & 22 Vict. c. 91, as limited, and registered under the 20 & 21 Vict. c. 49, or formed and registered under the Companies Act of 1862, must be wound up under the provisions of the last-mentioned act (b). The winding-up will be by a compulsory process, imder the direct action and control of the Court of Chancery (c), or by a voluntary process aided by liquidators appointed by the companies (f/). But companies which have not been registered as limited or unlimited banking companies, under the Companies Act of 1862, cannot avail themselves («) 25 & 26 Vict. c. 89, n. 199. (/>) Id. 8S. 179, 196. (r) Id. s. 79. ('/) Id. H. 129. AviNuixci-rr a>;d DissuLurioN. 491 of the voluntary process of wdndiug-up — they must he "vvouiid up hy the Court of Chancery (e) . Reversing the order of time in wliich these banks were estabhshed, we will first consider the winding-up of the companies fonned and registered under the Companies Act of 1862, as many of its provisions will tend to eluci- date the principles applicable to the winding-up of pre- viously existing companies ; secondly, companies formed under the 7 & 8 Vict. c. 113, or under the 21 & 22 Yict. c. 91, as limited, registered under the 20 & 21 Yict. c. 49, and re-registered under the Companies Act of 1852 ; and thirdly, copartnerships formed under the 7 Greo. IV. c. 46, and the 3 & 4 Will. IV. c. 98, and not registered under the 20 & 21 Vict. c. 49, or under the Companies Act of 1862, — and the respective rights and liabilities of the members and contributories of these companies. "With regard, then, to the mnding-up of limited banldng companies formed under the Companies Act of 1862, it is to be remembered that the liability of the members is fundamentally and constitutionally limited to the amount unpaid on their respective shares (/') ; consequently, if the shares in these banking companies have been fully paid up, there will be no liability on the part of a past or a present member to contribute to the debts of the company on its being wound up. On the other hand, if the shares have not been fully paid up, a past or a present member may be called upon to contribute to the debts and liabilities of the company the amount remaining unpaid on his shares, subject to certain conditions and limitations (g). The con- ditions are, — first, that the person has only ceased to be a member within the year ; next, that the debts must have been contracted before he ceased to be a member; and, thirdly, that the present members are unable to satisfy the contributions required to discharge the debts of the com- ((•) 25 & 26 Vict. c. 89, s. 199 (2j. (/) Id. s. 7. (.y) Id. s. 38 (1). 492 WINDING-UP AND DISSOLUTION. pany {/i). A member will not be liable to contribute, if he has ceased to be a member for a period of one year or upwards prior to the commencement of the winding-up of the company (/). The commencement of the winding-up for this purpose is the time when the petition was pre- sented to the Court of Chancery in the case where it is compulsory (A-), and where it is voluntary, the time when the resolution of the company authorizing the winding-up was passed (/). Members will not be entitled to set off dividends and profits due to them as such against the claims of the creditors of the company, or to enter into competition with creditors, although on the final adjust- ment of their rights amongst themselves, as contributories, their claims in respect of dividends or profits may be taken into account {m) . With these qualifications, members present and past of limited banking companies will be liable to contribute to the assets of the company to an amount sufficient for the payment of its debts and liabilities, and the costs, charges and expenses of the winding-up, and for the payment of such sums as may be required for the adjustment of the rights of the contributories amongst themselves (;?). Compvhot'tj Wind ill (J- up. — A compulsory winding-up may be resorted to under the following circumstances, viz. : — (1.) Whenever the company has passed a special reso- lution requiring the company to be wound up by the Court (o). (h) 25 & 2G Vict. c. 89, s. 38. In re Barncd's Bank; lldhcrt v. Banner, L. R., 5 H. L. 28 ; 40 L. J., Ch. 410. (0 Id. 8. 38 (I). {k) Id. a. 84. (/) Id. 8. 130. (w) Id. s. 38 (7). («) Id. B. 38. (o) Id. fi. 79. As to special resolutions, sec ante, p. 417. The statute also specifies another reason, viz., whenever the members are reduced in number to less than seven, but as this is not likely to occur in a limited banking company, consisting of a numerous body of shareholders, it is not stated in the text. COMPULSORY VVINDING-TTP. (2.) Whenever the company does not commence its business within a year from its incorporation, or suspends its business for the space of a whole year (7;). (3.) Whenever the company is unable to pay its debts {p). (4.) Whenever the Court is of opinion that it is just and equitable that it should be wound up (j)). A company will be deemed unable to pay its debts : — (1.) Whenever a creditor, to whom the company is in- debted in a sum exceeding 50/., has served on the company, by leaving at its registered office, a written demand requiring the company to pay his debt, and the company has for three weeks neglected to pay the debt, or to secure or com- pound for the same, to the reasonable satisfaction of the creditor {q). (2.) Whenever an execution on a judgment, decree or order obtained by a creditor against the com- pany has been retm^ned unsatisfied, wholly or in part (q). (3.) Whenever it is proved to the satisfaction of the Court, that the company is unable to pay its debts (5'). A company, however, will not be regarded as unable to pay its debts simply because it has not paid a debt which it disputes, and which the creditor has not established by action (r) . In the case of a banking company, the Lord Justice Turner has expressed an opinion that a winding-up by the Court, rather than a voluntary winding-up, should be adopted in cases of enormous magnitude, where vast in- terests are at stake — where the most ample powers which the law has given must be required to be exercised — where {jj) 25 & 26 Vict. c. 89, s. 79. (q) Id. s. 80. See Buckley, pp. 164—175. (V) lie Catholic Publkhinc/ CoDipain/, 33 L. J., Clianc. 325 ; In re Imperial Guardian, ^-c. Society, L. E,., 9 Eq. 447; In re Kind's Cross Industrial BivcUinffs Company, L. R., 11 Eq. 149. 493 49-i -WINUIXG-UP AND DISSOLUTION, there have been transactions justifying, if not requiring, investigation — where it may he doubtful whether the pro- perty of the shareholders will answer the liabilities, and where there is danger to the creditors of the shareholders escaping from their liabilities («). Petition. — A winding-up order Avill be obtained upon a petition presented to the Court of Chancery by the com- pany, or by any one or more creditor or creditors or con- tributory or contributories, or by all or any of the above parties together or separately, and every order which may be made on any such petition shall operate in favour of all the creditors and all the contributories of the company in the same manner as if it had been made upon the joint petition of a creditor and a contributory (/). A holder of scrip certificates may petition for a winding-up order, on his clothing himself with the character of a contributory {u). But a holder of fully paid-up shares must show special circmnstances to entitle him to an order (,<•). Restraining Actions against the Company. — The Court may, after the petition has been presented, upon the ap- plication of the company, or of a creditor or of a contribu- tory, restrain proceedings in actions or suits against the company, and ap])oint a provisional liquidator (//). Appli- cations must now be made to the Court where the actions are pending {z). "When a winding-up order has been made, the act pro- vides that no suit or action shall be proceeded with or commenced against the company, except with the leave of the Court, and subject to such terms as it may impose {(i). {s) In re Korthumhcrland and JJurham District Bankiiiq Compatni, 2 De a. & J. 378. [t) 25 & 2G Vict, c. 89, s. 82. See Buckley, pp. 177—182. (w) Ex parte Ellis, 34 L. J., Chanc. 237 ; 11 Jur., N. S. 211. \x) llJur., N. S. 4. (y) 2.3 & 26 Vict. c. 89, s. 85. Soo Buckley, pp. 183—194. (2) Under .sect. 24, sub.s. o of Judicature Act, 1873, and sect. 11, stibs. 1 of Judicature Act, 1875. And see J'eoph's Garden Company, 1 Ch. D. 44 : Hose v. Garden Lodge Company. 3 Q. B. D. 235 ; In re Artistic Colour Prinfinr/ Compatn;, II V\\. T). .'lOi. (») 2.'. & 2fl Vict. c.'Sf). .9. 87.' VOLUNTARY WINDIXC^-LT. 495 The Court is also empowered, at any time after an order has heen made for winding-up a company upon the appli- cation of a creditor or contributory, to stay proceedings under the winding-up order, either altogether or for a limited time (b). The Court may dismiss the petition with or without costs, or adjourn the hearing, or may make an interim or any other order that it may deem just under the circumstances of the case (c) . The Court is to consult the wishes and interests of the creditors and contributories in all matters connected with the winding-up of the company {d) . FoncarcUnrj Order to Registrar. — A copy of the winding- up order is to be forthwith forwarded by the company to the Registrar of Joint Stock Companies, who must make a minute of it in his books relating to the company [e). Under a compulsory -^dndiug-up, the Court has the power of appointing official liquidators for the purpose of assisting it in the conduct of the business. The powers and duties of official liquidators will be considered with those of liquidators appointed under a voluntary winding- up — to which head we now proceed. Voluntary Winding-vjh — A banking company may be wound up voluntarily in the events and under the circum- stances following, viz. : — (1.) Whenever the period fixed for its duration by the articles of association has expired, or when it is provided by the articles that the company is to be dissolved, and it has passed a resolution in general meeting requiring the company to be wound up volimtarily (/). (i) 25 & 2G Vict. c. 89, s. 89 ; Buckley, 205, 206. (c) Id. s. 86. [d) Id. s. 91. W Id. s. 88. (/■) Id. s. 129; Buckley, 2.>;]-2.J5. 496 ■SVINDIXG-UP AND DISSOLU HON. (2.) Whenever the company has passed a special reso- lution for that purpose (/). (3.) Whenever it has passed an extraordinary resolution to the effect that it has been proved to its satis- faction that the company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same (//). An extraordinary resolution {g) for this piu-pose will be when notice of the resolution has been given and confirmed in the same manner as a special resolution (//). The winding-up commences to operate from the time when the resolution was passed (i). It will not preclude a creditor from afterwards applying to the Court to have the company wound up by the Court (A-). Notice of the special or extraordinary resolution, as the case may be, must be advertised in the Grazette (/). The company thenceforth ceases practically to carry on its Imsiness, and transfers of shares, unauthorized by the liquidators, will be void, and the status of the members cannot be altered in their relations to the company (?«) . The corporate character of the company, with its incorporated powers, continues until formally dissolved {ni). When the resolu- tion has been passed and confirmed for winding-up the company voluntarily, the next step will be the appoint- ment of one or more liquidators (»). On their appointment the powers of the directors determine, unless continued with the sanction of the company or the liquidators {ii) . Their duties and powers will be considered in connection with those of the official liquidators. The costs of a voluntary winding-up, including the remuneration of the (/) 25 & 26 Vict. c. 89, s. 129 ; Bucldev, 2:}3— 2.').'). if/) Id. 8. 129. (//) See ante, p. 417, for the mode of passing special resolutions. («•) 25 & 2G Vict. c. 89, s. 130; Buckley, 255; Dawes' case, L. R., 6 Eq. 232 ; In re Smith, Knight &; Co., ib. 238 ; L. R., 4 Ch. 20. (/,•) Id. 8. 145. See Buckley, 266—269. (/) Id. 8. 132. (/«) Id. 8. 131 ; Buckley, 256. («) Id. s. 133; Buckley, 257—260. LTQUIHATOR*^. 407 liquidators, will be payable out of the assets of tlie com- pany (o). Winding-up under Sapervii^ion of the Court. — When a company is being- wound up voluntarily, the proceeding may be transfen'ed to and adopted by the Court of Chan- cery, and completed imder its supervision. This course "will be taken when the voluntary winding-up is not proceeding satisfactorily, or is inefficient in its working for the inte- rests of creditcTS or contributories (jj). Liquidators. — The Court of Chancery, in winding-up a company under its control, generally appoints an official liquidator, who ought to be an entu-ely disinterested per- son — neither a creditor nor a shareholder of the com- pany {q). In all proceedings he will be described as the official liquidator of the particular company, and not in his indi- vidual name (r). His duty will be to take possession of all the property of the company, and perform such other acts in reference to the winding-up as the Court may im- pose upon him (r). His powers will be to bring or defend actions or suits, or institute prosecutions in the name or on behalf of the company («), to realize the propei-ty of the company (s), to prove in bankruptcy (s), to draw, accept or indorse any bill or promissory note in the name and on behalf of the company, to take out letters of administra- tion to any deceased contributory, and do and execute all matters that may be necessary for winding-up its affairs and distributing its assets («). These powers may be exercised with or without the sanction or intervention of {o) 25 & 26 Vict. c. 89, s. 144. [p) Id. s. 147. See Imperial Bank of China, L. R., 1 Ch. 339 ; Buckley, 270 ; In re London and Mercantile Discount Coinpani/, L. R., 1 Eq. 277; In re Beaiijolais JFine Company, L. R., 3 Ch. 15. {ri) In re Northumberland and Durham District Bankimj Compani/, 2 De G. & J. 508. (>•) 25 & 2G Vict. c. 89, s. 94. (s) Id. s. 95. O. K K 498 WINDING-UP AND DISSOLUTION. the Coui't of Chancery, if the Court has made an order to that effect {t). Under a voluntary winding-up liquidators are appointed by the company, and the powers given to official liquidators may he exercised by them, without the sanction of the Court (ii). They have power to settle the list of eontril)utories, and the list will he prima facie exi- deuce of the liability of the persons named therein as contributories (??). Before ascertaining the sufficiency of the assets, they may call upon the contributories to pay to the extent of their liability, for the liquidation of the debts of the company {,v), and in making calls take into conside- ration the liability that some may fail to pay their respec- tive proportions (x). They are also to adjust the rights of the contributories amongst themselves {x). The liquidators are also empowered, with the sanction of the Coiui, where the company is being Avound up under its control, or subject to its supervision, and with the sanction of an ex- traordinary resolution of the company, when it is being wound up voluntarily, to compromise calls, liabilities and claims between the company, its contributories or debtors (y) , and to pay or settle with its several classes of creditors in full or otherwise (y) . The Court of Clianeery will not compel a liquidator against his judgment to sanc- tion a compromise of debts (~). These arrangements will be binding on tlie company and creditors, subject to the right of creditors to appeal to the Com-t within three weeks of their eomjDletion (a). The Court, in sanctioning a compromise, exercises a judicial discretion, and will not direct the official liquidators to conclude a compromise without the means of itself forming an o])inion as to the propriety of the terms of the compro- (t) 25 & 2G Vict. c. 89, ss. '.).), 9G ; Tiorjiuind v. 7u/7///, L. R., 4 Eq. 123. {/<) Id. 8. 133; Buckley, 258. (r) Id. s. 133. {>/) Id. Hs. 159, IGO; Gen. Ord. it. 49, 50. This power extends to a general compromise with the creditors as a class. Commercial Sank CoV' poration nf India and the East, L. R., 8 Eq. 231. {z) In re East of England Banking Coinj'an)/, L. R., 7 Ch. 309. [a] To & 26 Vict. c.'89, ss. 136, 137. LIQUIDATORS. 499 mise {h). Therefore, where official liquidators applied to the Court to sanction a compromise, which had been pro- posed by a body of thirty-five shareholders, to pay among them an aggregate sum in discharge of their liabilities as shareholders, but Avithout disclosing to the Court the parti- culars or the data of such compromise, the Com-t refused the application, althougli it was sworn that the compromise was fomided upon details of property, and circumstances which, if divulged, woidd operate detrimentally to the thirty-five shareholders and to the interests of the com- pany (J). The liquidators are also empowered, with the like sanc- tion of the Com-t or company, where the property of the company is proposed to be sold to another company, to accept shares in such other company as the consideration of the purchase-money (r). Official liquidators of a bank entered into a provisional contract with B. to sell him property belonging to the bank for 16,000/. At a meeting before the chief clerk in chambers, this contract was sub- mitted for the approval of the judge, when it was objected to by the creditors, who stated that C, another pm-chaser, would give a higher price, and who afterwards offered 17,600/., it was held that the chief clerk was right in riot adopting the provisional contract with B., if a larger sum could be obtained, and the official liquidators were directed by the Court to carry out the contract witli C. for 17,600/. {d). The liquidators may appeal to the Com-t to determine any question which may arise in the com-se of the exercise of their powers, on a volimtary winding-up {e). They have power also to call general meetings of the company, and if the winding-up should be prolonged beyond twelve [b) Kortlutmhcrhnd and Durham District Bank Coiiipau!/, Ex 2]((>-tc Tottij, 29 L. J., Chanc. 702, (f) 25 & 26 Vict. c. 89, s. 161 ; Buckley, 315—320. \d) In re KorthumherloM Distrirt Banking Compani/, 9 W. R. 584; 5 L. T., N. S. 633. [e) 25 & 26 Viet. c. 89, s. 138. K K 2 500 WINDING -UP AXD DISSOLUTIOX. months, they must at the end of each year lay before the meeting an account showing their acts and dealings and the manner in which the winding-up has been conducted during the preceding year (e) . In the case of a vacancy in the office, another hcpiidator may be appointed, and the Coui-t may remove any liquidator on due cause show^n (/). Delinquent Kquidators, as we have seen, will be liable to criminal prosecution {g). We pi'oceed to mention the winding-up of the second and third classes of banking companies. Winding-up of Companies existing before 1862. — Banking companies formed under the 7 & 8 Yict. c. 113, or under the 21 & 22 Vict. c. 91, as limited, and respectively regis- tered under the 20 & 21 Vict. c. 49, and the Companies Act of 1862, will be wound up under the latter act {h), and all its provisions with regard to banking companies, formed and registered since the 2nd of November, 1862, will apply, with this exception, that persons liable at law or in equity, to contribute to the j)ayment of the debts or liabilities of the company contracted prior to registration, and for the adjustment of tlie rights of the members among themselves, will be contributories in respect of such debts and liabilities [i). The Court of Chancery may, when the petition for the winding-up has been presented, on the application of a creditor, restrain further proceed- ings in actions or suits, as well against contributories as against the company [k), and legal proceedings caimot afterwards be commenced against contributories, without the special leave of the Court (/). The members of unlimited banking companies registered under the 20 & 21 Vict. c. 49 (?/?), as limited banking com- [e) 25 & 26 Vict. c. 89, s. 138. (/) Id. 88. 140, 141 ; In re Sir John Moore Gold Mutiny Compauy, 12 Ch. D. 325. {g) 25 & 26 Vict. c. 89, s. 165, ante, p. 486. (//) Id. 83. 179, 180. (0 Id. 8. 196. (/,) Id. s. 197. (/) Id. s. 198. \m) Sect. 8. OF COMrANlES EXISTING BEFORE 1862. 501 panies, on winding-up, will be liable beyond the amount paid up on tbeir respective shares for the debts of the company contracted or incurred previously to registra- tion {n). The effect of registration in these instances is to make the company limited quoad liabilities incurred after registration, but unlimited quoad debts previously contracted (ii). So banking companies established under the 7 & 8 Geo. IV. c. 46, or under the 3 & 4 Will. lY. c. 98, or banking companies not registered as limited or unlimited, under the Companies Act of 1862, will be woimd up as unregistered companies (o) under that act, with this ex- ception, that no such company can be wound up volim- tarily, or subject to the supervision of the com-t (p). The circumstances under which such a company may be wound up are : — (1.) Whenever it is dissolved, or has ceased to cany on business, or is carrying on business merely for the purpose of winding-up (q). (2.) Whenever it is unable to pay its debts (q). (3.) Wlienever the Court is of opinion that it is just and equitable that the company should be wound up((7). The circumstances under which an unregistered com- pany will be considered as unable to pay its debts are similar to those already detailed in regard to registered companies {>•). The Court of Chancery has a similar power of staying actions commenced by creditors against the company or contributories, on the presentation of the winding-up petition (.s), and of prohibiting the commence- («) Ux parte Stevenson, 32 L. J., Chanc. 96; Garnett Gold Mining Com- pany of America v. Sutton, 13 W. E. 412 — Exch. Cham. See Lind. 1445, and compare Fountain'' s case, 11 Jur., N. S. 553. As to the liability of members of companies registered under the Act of 1862, see ante, p. 401. (o) 25 & 26 Vict. c. 89, s. 199. {p)Id. 8. 199 (2). [q) Id. s. 199 (3). (>•) Id. 8. 199 (4) ; and see ante, p. 493. W Id. s. 201. WINDING-UP AND DISSOLUTION, nient of actions against contributories without its leave (t). The rights and liabilities of contributories to creditors and amongst themselves, under the winding-up, remain un- affected by recent legislation as to these copartnerships [ti). Having seen when and under what eu'cumstances banking copartnerships and companies may be wound up, it be- comes now necessary to point out the parties who are liable as contributories, and the nature of their liability, and the mode of enforcing it. These matters will be the subject of the concluding portion of this chapter. Contributories general///. — A contributory is defined, by the Companies Act of 1862, to be every person liable to contribute to the assets of the company, in the event of the same being wound up ; and in all proceedings for deter- mining the liability of contributories, any person alleged to be a contributory (.t?). Grenerally, persons who are, or who ought to be, members in accordance with the provi- sions of the deed of settlement, or the regulations of the articles of association of the company, will be contribu- tories, either in theii' own right or as representing others. Illustrations taken from the decisions of the cases will be the best guides in determining who are contributories in the absence of a more specific definition than is afforded by the statute (y). It must be carefully borne in mind, with reference to the cases of contributories, that the liabilities of contributories are not always equal ; each contributory is not always liable for the whole expenditure of tlie company ; in the cases respecting contributories, all that is decided, when the Court orders that such a person shall bo placed on the list of contributories of the company, is, not that ho is necessai'ily in precisely the same situation, with respect to {() 25 k 26 Vict. c. 80, ,s. 202. ((/) Id. 8. 200. (x) Id. s. 74. (y) Sec Buckley, 155. bankrupt's trustek. 503 peoiiniary responsibility, as every other person who has been or may be placed upon the list, but only that in respect of shares that he holds or has held, (as his case may be,) he is liable to bear some share or other in aid of the liabilities of his fellow members of, or the debtors to, the company. What he must eventually pay, as his pro- portion of the losses, remains for subsequent investigation, and the result depends on the number of shares he has held, on the mode in which they were transferred to him, the time during which he has held them, and a variety of other cu-cumstances, and combinations of circumstances, differing in almost each particular instance (::). The 7 Geo. IV. c. 4G, s. 13, has no bearing on the question who are contributories. Ajyjjlicants and Allottees. — It is not necessary that a per- son should be a shareholder to make him a contributory ; all that is required is that there should have been a con- cluded agreement to take shares under section 23 ; nor is it necessary that the agreement should have been in writing {a). In an ordinary case of an application for shares, to constitute such an agreement, the letter of appli- cation must generally be followed by an allotment which must be communicated to the applicant (/>). But a person may be a contributory if he has agreed to take shares, even although there has been no allotment made to him [c] or he has no notice of it {d). Banknipfs Trustee. — A contributory becoming bankrupt before or after he has been placed on the list of contribu- tories, his trustee will be deemed to be a contributory, and [z) ^QQ per Lord Cottenham, C, in Ex parte Mansfield [Earl), 2 Mac. & G. 671. (rt) Cookneri's case, 26 Beav. 6 ; Beese River Silver Mining Compani/ v. Smith, L. R., 4 H. L. 64 ; Bloxam, Ex parte, 33 L. J., Chanc. 574 ; Buckley, 35—69. {b) EeUafs ease, L. E., 2 Ch. 527 ; Uobbs' case, L. R., 4 Eq. 9 ; TJ'^ard's case, L. E., 10 Eq. 659. (r) Bird's case, 4 De G., J. & S. 200. {d) Adams' case, L. E , 13 Eq. 474 ; Folder's case, L. E., 14 Eq. 316. WINDING-UP AND DISSOLUTION. may be called upon to admit proofs against his estate, or to allow payments out of his assets in due course of law of any moneys due from the bankrupt in respect of his liability to contribute, and the estimated value of his lia- bility to future calls may be proved against his estate (c). Directors. — As to when directors, acting without the necessary qualification in respect of shares prescribed by the memorandum or articles of association, -will make themselves liable as contributories in respect of such shares, see p. 444. Executors and Administrators. — On the death of a con- tributory either before or after being placed on the list of contributories, his personal representatives, heirs and de- visees will be liable in due course of administration to con- tribution, and his personal representatives, heirs and devisees will be the contributories (/). Executors holding shares merely as such, and never having talicn to them as beneficial holders, are only liable to the extent of the assets of those whom they represent ; the liability is that of the estates of the original holders {g). Females marrying. — A female marrying either before or after being placed on the list of contributories, her husband will dming the marriage be liable to contribute the same .sum as she would have been liable to contriliute had she not married, and he will be deemed the contributory (//). A married woman, having separate estate, may make herself a shareholder in her own riglit, provided the con- tract was entered into on the credit of that estate, and that the company's deed of settlement does not exclude married women from becoming shareholders (/). But it would seem (/•) 2.') & 26 Yict. c. 89, s. 77 and s. 7o. (/) Id. «. 76. [fj) Evans v. Covoifnj, 2') L. .J., Chauc 499. {)<) 25 & 20 Vict. c. 89, s. 78. (i) Mrs. Mfithcumaji^s case, L. R., 3 Eq. 781. rRINCIPALS AND AGENTS. 505 lier husband is liable to be put on the list of eontributories wdth her (/.•), unless she was known by the company to be a married woman, and she, and not her husband, was accepted as shareholder (/). If she has no separate estate, the husband, as a general rule, will be liable even where she has bought the shares with his consent and know- ledge {»i). If, on the other hand, she is known to be a married woman, and the company, notwithstanding, deal with her as a principal, and the steps necessary by the deed of settlement to constitute the husband a member have not been taken, he would not, it seems, be liable, nor would the wife {>}). Infants. — An infant, it would seem, could not be put on the list of eontributories unless his being put there should happen to be for his benefit, as where there are surplus assets (o). Legatees. — If shares have been bequeathed and the executor has assented to the bequest, and the legatee has accepted it and been accepted by the company as a share- holder, the latter, and not the executor, is liable as a con-- tributory (/;). Principals and Agents. — A person taking shares, though intending to do so as an agent only for another, will be personally liable as a contributory, unless he states at the time that he accepts only as agent {q) . But if he does so and is in fact the authorized agent of that other he is not liable but his principal (r). {k) LuarcVs crisc, 1 De G., F. & J. 533; but see In re London, Bombay und Mediterranean Bank, 18 Ch. D. 581, and ante, pp. 437, 438. (/) Angas^s case, 1 De G. & S. 560. {m) B'Oaseley's case, 18 Sol. J. 282. («) Ex parte' Rhodes, 7 W. R. 510. (o) See Lindley, 1356. [p) See Kccnc's Executors' case, 3 De G., M. k G. 272; CrossfchVs case, 2 ib. 128. (q) Bird, Ex parte, 33 L. J., Bank. 49. \r) Barrett's case, 4 D. J. & S. 200. 506 WINDING-UP AND DISSOLUTION. Trustees. — The trustee is liable to be put on the list of coiitributories aucl not the cestui que trust, nor is his lia- bility limited to the amount of the trust estate (s). A trustee of course, has his remedy against the cestui que trust for indemnification (t). Purchasers l)ij means of 3IisrepresentatioJi. — Persons in- duced to piu-ehase shares in a comjiany through fraud (provided the fraud is in law the fraud of the company), can as against the company repudiate their shares («) ; but as against creditors when the winding-up has commenced, it is now finally settled no such repudiation can be made, but that they must be put on tlie list of contributories {r). Scrijiholdcrs. — A mere holder of scrip "will not necessarily be liable as a contributory ; whether he will be so or not depends on whether he holds the scrip as principal or as agent for another. Therefore, where London bankers had in their hands, at the date of the winding-up order, shares belonging to their foreign corresi^ondents, on which they were in the habit of receiving the dividends, they were held not to be contributories (.r). List of Contributories. — As soon as practicable after the order for winding-up has been made, the official liquidator settles the list of the contributories {ij). In settling this list a distinction must be made between persons contribu- tories in theu" own right and persons ^\\\o are representa- tives of others or liable for their debts (;:). In the case of a personal representative of a deceased («) Barrett" s case, supra; Hoarc^s case, 2 J. & H. 229; LcifchihVs case, L. R., 1 Eq. 231 ; Muir v. Clt;/ of Glaf-goir Bank, 4 App. Cas. 337. (/) Cruse V. I'aine, L. E., G Eq. 641 ; James v. May, L. R., 6 H. L. 328. {><) Kish V. Central Bai/urn/ Conipani/ of Voiezuda, L. E., 2 H. L. 99. (t) Oakcs V. Tarquand, L. E., 2 H. L. 325 ; Utonc v. Citi/ Bank, 3 0. P. D. 282 ; Cargill v. Boictr, 10 Ch. J). 502. {x) Ex parte Finlay, 20 Beav. 182. (>j) 25 & 2G Vict. c. 89, s. 98 ; Gen. Ord. it. 29—31. Sec Anderson' a case, 17 Ch. D. 373. (r) Id. 8. 99. PAST MEMBERS. 507 coutribiitory being* placed on the list, it will not be neces- sary to add his heirs or devisees. The heirs or devisees may, however, be added as and when the Com-t may think fit (^0. On a voluntary winding-up the liquidator appointed by the company has sunilar powers of settling the list, and the list will be prima facie evidence of the liability of the persons named therein as contributories {b). Persons dis- satisfied with the insertion of their names on the list may appeal (c). Past Members. — There is only one list of contributories as past members (called the B list), and all persons ceas- ing to be members within the year are liable to be put on it as soon as it appears that the contributions of present members will be insufficient, and that the debts to be paid were contracted previous to theu* retirement (d). kSo a past member of a limited banking company who has trans- ferred his shares within a year of the winding-up is liable (if his transferee has not paid the unpaid capital on his shares, and if the present members' contributions are in- sufficient) to contribute, together with other past members, to the assets of the company to the full amount of the debts which were due at the date of the transfer, and which were still unpaid at the date of the winding-up, but from this amount must be deducted the dividends already re- ceived from the present members (e). Each past share- holder is liable to contribute to such unpaid debts, to the extent of the amount unpaid on the shares by his trans- feree, 2)ari passu with all the other past shareholders who are liable for the same debts, and cannot require that the past members who transferred their shares after his transfer (ff)"25 & 2G Vict. c. 89, s. 99. (b) Id. s. 133 (9). (c) Id. s. 124. {d) Id. s. 38 (2), (3). See BrctCs case, L. R., C C'li. 800; IFcbb v. Whiffin, L. R., oH. L. 711. (e) In re Oriental Commercial Bank, L. E,., 7 Ch. 200. 508 -WINDING-UP AND DISSOLUTION. was registered should be exliausted before any call is made on him (•). Nature of LiahiUty. — Calls made on the winding-up of a banking company, formed under the Companies Act of 1862, will create a specialty debt clue from the contributory, and will not be barred till the lapse of twenty years (s). Extent of LiahUitij undertahen hij Transferee. — As a general rule the liability of the transferor is, as between the company, the transferee and himself, transferred to the transferee by the transfer of the shares ; so a transferee of shares iu a banking company, established under the 7 Geo. IV. c. 46, was held liable as a contributory in respect of debts contracted as well before as after the transfer, there being no provisions in the deed of settlement of the com- pany in any way limiting such liability {t). So where the name of a person wlio had purchased shares in a similar banking company was after its stoppage placed on the list of contrihutories, but only from the date at which he made the purchase, this qualification of his liability was struck out on appeal (?/). Enforcing Calls. — The mode by which calls are en- forceable is by the service of the summons of the order for the call on the contrihutories, or their representatives, requuing payment to be made to the official liquidator (7) 25 & 2G Vict. c. 89, s. 106. (/•) Id. 8. 124. («) Cork and Bamloii liailwHi/ Compnnij v. Goodc\ 13 C. B. 82G. See also Ex parte Itobiiison, 6 De Gr., Mac. & G. 572 ; 26 L. J., Chanc. 95. [t) Kt parte Cape, 2 De G., Mac. & G. 562 ; 22 L. J., Chauc. GOl. [it) HcudtrMn v. Jhiidrrsoii, L. E., 3 II. L. 698. DISSOLUTIOX ON WINDING-UP. 511 of the amount therein mentioned and at a specified time, which if not complied with, an attachment or a sequestra- tion according to the practice of the Court may be issued against the defaulters (,r). In the case of a voluntary winding-up, application must be made by the liquidator to the Court for its aid to enforce calls (//). If the representative of a deceased contributory makes default in paying a call, proceedings may be taken for administering either his personal or real estate and of compelling payment thereout of the calls (z). A contributory may be arrested upon proof of probable cause being given to the Coui't, either before or after making the winding-up order, of his intention to quit or abscond from the United Kingdom for the pm^pose of evading payment of calls (a). An order for the pajanent of calls made in England may be enforced in Ireland or Scotland against contributories (A). Dissolution on Winding-up, — In the case of a compul- sory winding-up, a company will be deemed to be dis- solved when its affairs have been completely wound up, and an order has been obtained from the Court of Chan- cery dissolving the company [c) . The official liquidator must report the order to the registrar who will make a minute in his books of the dissolution of the company {d). Should he fail in reporting the order, he will incur a penalty not exceeding 5 A for each day of delay ((>). In the ease of a voluntary winding-up, as soon as the affairs of the company have been fully wound up, the liquidators (.(■) 25 & 26 Vict. c. 89, n. 101 ; Gen. Orel. r. 35, and Forms 38, 39, 42, (y) Id. s. 138. {z) Id. s. 105. («) Id. s. 118. See //; re Imperial 3IciT(i/ifUe Credit Company, L. R., 5 Eq. 264. {b) Id. ss. 122, 123. [c] Id. s. Ill ; and see form of Order, No. 56, Gen. Ord., 11th Nov. 1862. {d) Id. s. 112. (e) Id. 8. 113. 512 WINDING-UP AND DISSOLUTION. must make up an account showing tlie manner in which the winding-up has been conducted, and the property of the company disposed of (/) ; and the liquidators are then to call a general meeting of the company for the pm-pose of laying this account before the meeting, and hearing their explanations {/). The liquidators are afterwards to make a return of the holding of the meeting to the regis- trar, and, on the expiration of three months from the date of the registration of this return, the company will be deemed to haA'e been dissolved (g) . If the liquidators fail to make the retm-n, they mil incur a penalty not exceeding 5/. for every day of default {(j). Other Modes of Winding-up. — Independently of the procedure provided by the Companies Act of 1862 for winding-up and dissolving a banking company, there is another mode which it may be useful to mention. It is usual for promoters to state in their prospectus, that they reserve to themselves the right of returning the deposits, with or without certain deductions for preliminary ex- penses, shoidd the proposed capital not be subscribed, or from any other event the project should fail in their opinion to be practicable. This being a legal stipulation is binding upon all parties and is illustrated by the follow- ing case {h) : — The directors of a projected bank, not being able to carry out the project to its full extent, determined upon winding- up and returning the deposits. Deposits amounting in the whole to two-thirds of the subscriptions had been re- tui'ncd, and the remainder was in com'se of liquidation. A bill was filed by purchasers of shares or intended shares who were dissatisfied with the termination of the proposed bank ; and it was held, that the directors were justified in the coiu'se they had taken, it being morally impossible (/) 25 & 2G Vict. c. 89, s. 142. (16 BANKRUPTCY. Undischarged bankrupt. Companies. Petition for adjudication in bank- ruptcy. Undischarged Bcinlcnqit. — An adjudication of bankruptcy against an undischarged bankrupt who has been permitted by the trustee to resume and continue business is good (/). Conipaiiics. — Neither partnerships, associations, nor bodies corporate registered under the Companies Act, 1862, can be adjudicated bankrupt {m). Such companies must be wound up, as explained in a pre\dous chapter (n) . Adjudication. — By sect. 6, "A single creditor, or two or more creditors if the debt due to such single creditor, or the aggregate amount of debts due to such several creditors, from any debtor, amount to a sum of not less than fifty pounds, may present a petition to the Court, praying that the debtor be adjudged a bankrupt, and alleging as the ground for such adjudication any one or more of the following acts or defaults hereinafter deemed to be and included under the expression ' acts of bankruptcy :' " (1.) That the debtor has, in England or elsewhere, made a conveyance or assignment of his pro- perty to a trustee or trustees for the benefit of his creditors generally (o) : " (2.) That the debtor has, in England or elsewhere, made a fraudulent conveyance, gift, delivery, or transfer of his proj)erty or of any part thereof (jj) : " (8.) That the debtor has, with intent to defeat or delay his creditors, done any of the following things, namely, departed out of England {q), or being (l) Sx parte Watson, 12 Ch. D. 380. {m) Sect. 5. («) See ante, p. 490. (o) That is to say, a conveyance or assignment of all his property (sco Robson, p. 123). As to when such a transaction comes within 13 Eliz. c. 5, and can be set aside as tending to defeat and hinder creditors, see Spencer v. Slater, 4 Q. B. D. 13 ; BoUhro v. London JJiscount Co., 5 Ex. D. 47 ; Tirt/ne^s case, 1 Sm. L. Ca. 7th ed. p. 12. ( p) For general summary as to the result of the cases decided under this paragraph, and as to what amounts to a fraudulent conveyance, see ante, p. 184 ; and E.c parte Dann, 17 Ch. D. 26. (<7) See Ex parte Crispin, L. K., 8 Ch. 374 ; 42 L. J., Bank. 65, The consequence of his departure must be to delay creditors. Ex parte Mutric, Yes. 376; Ilolroi/d v. IFhitehtad, 3 Camp. 530. ADJUDICATION. out of England remained out of England (r) ; or being a trader departed from his dwelling- house, or otherwise absented himself (•*) ; or begun to keep house {t) ; or suffered himself to be outlawed : " (4.) That the debtor has filed in the prescribed man- ner in the Court a declaration admitting his inability to pay his debts {u) : " (5.) That execution issued against the debtor on any legal process for the purpose of obtaining pay- ment of not less than fifty pounds has in the case of a trader been levied by seizure and sale of his goods ix) : " (6.) That the creditor presenting the petition has served in the prescribed manner on the debtor a debtor's summons requiring the debtor to pay a sum due, of an amount of not less than fifty pounds, and the debtor being a trader has for the space of seven days, or not being a trader has for the space of three weeks, succeeding the service of such summons, neglected to pay such sum, or to secure or compound for the same {y) . {)■) See Ex parte Bunneij, 32 L. J., Bank. 41 ; Ex parte Crispin, supra. (*) See Wydoivn'scase, 14 Ves. 86; Ilolroyd v. Whitehead, supra ; Mills V. Bennett, 2 Rose, 269 ; Ex parte Meyer, L. R., 7 Ch. App. 178. {t) If bankers close the doors and windows of the bank, and their customers cannot obtain admission, this is " beginning to keep house." Cmmning v. Bailey, 6 Bing. 363 : see further Ex parte Foster, 1 Rose, 50. This will be inferred from debtor giving an order to be denied to creditors. Mitehlow V. May, 1 Taunt. 179. Stopping payment is not of itself an act of bankruptcy. Hatckins v. Whitten, 10 B. C. 217. (?/) The declaration must be signed, dated and witnessed according to Form 1 in the schedule, and filed in the Bankruptcy Court. See Rule 16. As to when the filing of the declaration is complete, see Ransford v. Maule, L. R., 8 C. P. 672 : 42 L. J., C. P. 231. (:r) By sect. 87, where the goods of a trader have been taken in execu- tion in respect of a judgment for a sum exceeding 50/., the sheriff must retain the proceeds of the sale for fourteen days : and, if notice is served on him within that time of a banki'uptcy petition against such trader, he must hold the proceeds in trust to pay the same to the ti-ustee. See Ex parte Villars, L. R., 9 Ch. 432 ; 43 L. J., Bank. 76; Ex parte Brooke, L. R., 9 Ch. App. 301 ; Ex parte Keys, L. R., 10 Eq. 432 ; 39 L. J., Bank. 28 ; Ex parte James, L. R., 9 Ch. App. 609. (y) See Rvdes 15, 17—25, and 41, 59, 61, 62, 63, 64, and Forms 4—9. As "to who may take out a debtor's summons, see Ex 2}artc Carter, 2 617 518 BANKRUPTCY. Proceedings in relation to a debtor's summons. No person, however, " shall be adjudged a bankrupt on any of the above grounds unless the act of bankruptcy on which the adjudication is grounded has occurred within six months before the presentation of the petition for adjudication ; moreover, the debt of the petitioning creditor must be a liquidated sum due at law or in equity and must not be a secured debt, unless the petitioner state in his petition that he will be ready to give up such security for the benefit of the creditors, in the event of the debtor being adjudicated a bankrupt (z), or unless the petitioner is willing to give an estimate of the value of his security, in which latter case he may be admitted as a peti- tioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated, but he shall, on an application being made by the trustee within the prescribed time after the date of adjudication, give up his security to such trustee for the benefit of the creditors upon payment of such estimated value " («). By sect. 7, "A debtor's summons may be granted by the Court on a creditor proving to its satisfaction that a debt sufficient to support a petition in bankruptcy is due to him from the person against whom the summons is sought, and that the creditor has failed to obtain payment of his debt, after using reasonable efforts to do so. -The summons shall be in the prescribed form, resembling, as nearly as Ch. D. 806 ; Ex parte Harris, 2 Ch. D. 423 ; Ex parU Brorldehanlc, 6 Cli. D. 358 ; 46 L. J., Bank. 113 ; Ex parte Shepherd, 10 Gh. D. 673 ; 48 L. J., Bank. 35. A debtor so served may apply to have it dismissed, on the ground that he is not indebted (r. 22). f>ee Ex parte Barron, L. R., 10 Ch. 269 ; Ex parte Ellis, L. R., G Ch. 602. As to proof of service, sec Ex parte Rogers, 15 Ch. D. 207. (r) See ^j; parte Good, 14 Ch. D. 82; 40 L. J., Bank. 49; Ex parte English a>/d American Bank, L. R., 4 Ch. 49; Ex parte Manchester and Liverpool Bank, L. R., 18 Eq. 249. (a) The value so assessed is binding on the creditor. {Ex parte King, L. R., 20 Eq. 273 ; 44 L. J., Bank. 92.) The trustee is not so bound, for he may order the security to be realized (r. 136). The trustee can redeem the security at its assessed valuation (r. 100). By sect. 12, a secured cre- ditor, notwithstanding bankrujjtcj', can realize liis security. As to ■when his right to count as a secured creditor is contested, see r. 78. See, as to deduction of value of security. Ex parte West Biding Union Banking Co., 10 Ch. D. 105. ADJUDICATION. 510 circumstances admit, a writ issued hy one of Her Majesty's Superior Courts. It shall state that in the event of the debtor failing to pay the sum specified in the summons, or to compound for the same to the satisfaction of the creditor, a petition may be presented against him praying that he may be adjudged a bankrupt. The summons shall have an endorsement thereon to the like effect, or such other prescribed endorsement as may be best calculated to indicate to the debtor the nature of the document served upon him, and the consequences of inattention to the requisitions therein made (b) . " Any debtor served with a debtor's summons may apply to the Coiu't, in the prescribed manner and within the prescribed time to dismiss such summons, on the ground that he is not indebted to the creditor serving such summons, or that he is not indebted to such amount as will justify such creditor in presenting a bankruptcy petition against him ; and the Coui't may dismiss the summons, with or without costs, if satisfied with the allegations made by the debtor, or it may, upon such security (if any) being given as the Coui't may require " (r). The bankruptcy of a debtor is, by section 11, " deemed Defiuitiou of to have relation back to and to commence at the time of the commence- raent oi bixnk- act of bankruptcy being completed on which the order is ruiDtcy. made adjudging him to be bankrupt; or if the bankrupt is proved to have committed more acts of bankruptcy than one, to have relation back to and to commence at the tune of the first of the acts of bankruptcy that may be proved to have been committed by the bankrupt within twelve months next preceding the order of adjudication ; but the bankruptcy is not related to any prior act of bankruptcy, unless it be that at the time of committing such prior act the bankrupt was indebted to some creditor or creditors in (b) See further, r. 22. As to who may take out a debtoi''s summons, see Ex 2J((rtc Kibble, L. R., 10 Ch. 373 ; In re BrocUchank, G Ch. D. 358 ; Ex parte Shepherd, 10 Ch. D. 572. (c) For the j)roceecliiigs on a debtor's summons, sec rr. 22, 23, 50, 61, 63, 64, sect. 7 ; and for proceedings on petition, see rr. 26 — 48. 520 BANKRUPTCY. Creditors bound by bankruptcy liroceedings. a sum or sums sufficient to support a petition in bankruptcy, and imless such debt or debts are still remaining due at the time of the adjudication" id). " Where a debtor shall be adjudicated a bankrupt, no creditor to whom the bankrupt is indebted in respect of any debt provable in the bankruptcy shall have any re- medy against the property or person of the bankrupt in respect of such debt except in manner directed by this act"(f). By sect. 13, the Court may, after a presentation of a petition, restrain actions against the debtor in respect of debts provable in banki'uptcy and appoint a receiver. Meeting of • Teditors for appointment (if persons to administer bankrupt's property. Appointment of Trustee. — By sect. 14, " When an order has been made adjudging a debtor bankrupt, herein re- ferred to as an order of adjudication, the property of the bankrupt shall become divisible amongst his creditors in proportion to the debts proved by them in the bankruptcy; and for the purjDose of effecting such division the Court shall, as soon as may be, summon a general meeting of his creditors, and the creditors assembled at such meeting shall and may do as follo"\\'s : "1. They shall, by resolution, appoint some fit person, whether a creditor or not, to fill the office of trustee of the property of the bankrupt at such remuneration as they may from time to time determine, if any ; or they may resolve to leave his appointment to the committee of inspection hereinafter mentioned : They shall, when they appoint a trustee, by reso- lution declare what security is to be given, and to whom, by the persons so appointed, before he enters on the office of trustee : t( o (d) Sec i:.r parte Grepe, 50 L. J., Ch. 723 ; Kc paric GUhoj, 8 Ch. D. 218 ; 47 L. J., Bank. 49. ((?) Sect. 12. As to the effect of bankruptcy on secured creditors, see ante^ p. 518. APrOINTMENT OF TRUSTEE, 521 " 3. Tliey shall, by resolution, appoint some other fit persons not exceeding five in number, and being creditors, qualified to vote at such first meeting of creditors as is in this act mentioned, or authorized in the prescribed form by creditors so qualified to vote, to form a committee of inspection for the purpose of superintending the administration by the trustee of the bankrupt's property : " 4. They may, by resolution, give directions as to the manner in which the property is to be adminis- tered by the trustee, and it shall be the duty of the trustee to conform to such directions unless the Court for some just cause otherwise orders." By sect. 15, " The property of the bankrupt divisible Descriptions amongst his creditors, and in this act referred to as the property divi^- property of the bankrupt, shall not comprise the following ^^^^^. amongst • T / /i\ creditors. particulars (/ ) : " (1.) Property held by the bankrupt on trust for any other person {g) : " (2.) The tools (if any) of his trade and the necessary Avearing apparel and bedding of himself, his wife and children, to a value, inclusive of tools and apparel and bedding, not exceeding twenty pounds in the whole : (/) Sect. 15. "Property" is defined by tte act, sect. 4, as meaning money, goods, things in action and every description of property, real or personal ; also obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as above defined. ((/) This applies both to express and implied trusts. So property in the hands of a bankrupt factor is protected. {Tai/lor v. Phoner, 3 M. & S. 562.) See also, as to implied trusts. Ex parte Ellis, 1 Atk. 101 ; Ex parte Barber, 28 W. R. 522. So also to money in the liands of a trustee, the cestui que trust ha^dng a charge pro tanto upon the balance in the hands of the banker of the bankrupt trustee. {Harris v. I'ruman, 7 Q. B. D. 240 ; 50 L. J., Q. B. 633 ; Ex parte Cooke, 4 Ch. D. 123 ; Kingston, Ex parte, 13 Ch. D. 696 ; 49 L. J., Ch. 415, ante, p. 239.) Property held on a bona fide express (and sometimes on an implied) trust is also exempted from the operation of the reputed ownership clause (sub-s. 5). {Martin, Ex parte, 19 Ves. 491 ; Harris v. Truman, supra; Ex parte Buck, 3 Ch. D. 795 ; Brir/ht, Ex parte, 10 Ch. D. 501.) Again, as we have already seen, property held by the bankrupt for a specific purpose is protected. Thus bills sent to a banker for a specific purpose and still remaining in specie do not pass to the banker's trustee. See ante, 138, whore the subject has been fully discussed. 522 BAXKRUrXCY. Earnings. Property of "wife. Pay or pen- sion. Fraud. Disclaimer of onerous con- tracts. "What actions pass to trus- tee. " But it shall comprise the following particulars : " (3.) All such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, or may be acquired by or devolve on him during its continuance (A) : " (4.) The capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the bankrupt for his own benefit at the com- mencement of his bankruptcy or during its continuance, except the right of nomination to a vacant ecclesiastical benefice (/) : (/;) Money earned by the bankrupt "when carrying on a trade, as distin- guished from mere personal labour, during his bankruptcy passes to the trustee. [Ex parte Banks, 4 Ch. D. 689 ; 46 L. J., Bank. 74 ; Emdcn v. Carte, 17 Ch. D. 169, 768; 50 L. J., Ch. 492.) As a general rule all such interests as a husband possesses by marriage in his wife's property, and he can dis- pose of, passes to his trustee on his bankruptcy. {Miles v. WiUiains, 1 P. & W. 249; Greij v. Kentish, 1 Atk. 280.) As regards her choses inaction, see Mitford V. Mitford, 9 Ves. 187; and as to her right to an equity to a settle- ment, Murray v. EUihank, 10 Ves. 90; Wliite & Tudor's L. C. 3rd ed. vol. i. p. 388. The pay, pension or salary of an officer in the army, fiavy or Civil Service, or the pension granted by the Treasury, pass to the trustee. (See sect. 89.) So the Coui't has power to order payment of any part of a salary or income received by the bankrupt other than in the way just mentioned. (Sect. 90.) A mere voluntary allowance made to the bank- rupt is not "income" within the section. Ex parte Wicks, 17 Ch. D. 70. As a general rule, property obtained by the bankrupt by fraud, or left ■with him entirely by mistake, will not pass to his trustee. Ex parte Barnctt, 3 Ch. D. 123 ; Lindsay v. Candy, 2 Q. B. D. 96 ; Ex parte Whittakcr, 10 Ch. D. 440; 44 L. J., Bank. 91. By sect. 23 the trustee is enabled to disclaim in writing (see Tl'ilson V. iralluin, 5 Ex. D. 15.5), property burdened with onerous covenants, or umiiarketable shares, or unprofitable contracts, or unsaleable pro- perty, &c., &c. {Ex parte TFallon, 17 Ch. D. 746; In re West of Enq- land Bank, 12 Ch. D. 228 ; 48 L. J., Bank. 764 ; Ex parte Walton, 17 Ch. D. 746 ; Ex parte Ladhury, ib. 532 ; Ex parte Glcgg, 19 Ch. D. 7.) In the case of leases leave to disclaim ought to be obtained. (Rule 28 ; Ex parte Ladbury, supra ; Ex parte Sadler, 19 Ch. D. 122.) Any person injured by such disclaimer may prove to the extent of the injury done to him. (Sect. 23; Ex parte Blake, 11 Ch. D. 572.) As to the time in ■which tru.stee must disclaim, sec sect. 24 ; Banner v. Johnston, L. R., 6 H. L. 157 ; Ex parte Itichardson, Be Harris, 16 Ch. D. 613. As to the liability of trustee before and after disclaimer, see In re Sneezum, 8 Ch. D. 4C3 ; 45 L. J., Bank. 137; Ex parte Dressier, 9 Ch. D. 252 ; Lowrojy. Barker, 5 Ex. D. 170. (/) An undischarged bankrupt is capable of making a contract ; but should the trustee choo.se to interfere and take the benefit of it, ho may, as a general rule, do .so. {Herbert v. Saycr, 5 Q. B. ]). 965; Jameson v. Brick and Stone Co., 42 Q. B. D. 208.) Actions for personal torts do not pass. {Beckham v. Drake, 2 H. L. 579.) As to trustee's power generally, see sect. 25. APPOINTMENT OF TRUSTEE. 523 " (5.) All goods and chattels being, at the commencement of the bankruptcy, in the possession, order or disposition of the bankrupt, being a trader, by the consent and permission of the true owner, of which goods and chattels the bankrupt is reputed owner, or of which he has taken upon himself the sale or disposition as owner ; pro- vided that things in action other than debts due to him in the course of his trade or busi- ness, shall not be deemed goods and chattels "within the meaning of this clause" (/r). (k) As to what are ffoods and cltattels, see Robson, p. 497. Fixtures are Reputed not chattels till severed. [Horn v. Baker, 9 East, 215 ; 2 Sm. L. C. 7th ownership ed. p. 205.) Bills and notes are chattels within the section, see Robson, 498. Choses in action are, by the concluding words of the paragraph, exempted, except debts due to the banki-upt in the coiu-se of his business. Shares, as we have seen, are not choses in action for this purpose. {Ex parte Union Bank of Manchester, L. R., 12 Eq. 354 ; 40 L. J., Bank. 57, ante, p. 163.) Aliter, a debenture of a joint stock company, Ex parte Ecnsburg, 4 Ch. D. 685 ; and a policy of insurance, Ex parte Ibbetson, 8 Ch. D. 519 ; and see ante, p. 161. The goods must have been actually in the possession, order and dis- Possession position of the bankrupt : or constructively so, as where they are in the order and dis- bands of his agent. {Hornabi/ v. Millar, 1 E. & E. 192.) He must, position, moreover, have had them in his sole possession, order and disposition ; and, consequently, where the goods of a third person were in the joint possession of a bankrupt and his partner, who was solvent, it was held that they did not pass to the trustee of the former. [Ex parte Dorman, L. R., 8 Ch. 51 ; 42 L. J., Bank. 20. See also Ex j'X'rte Fletcher, 8 Ch. D. 51 ; Ex parte Mai/man, ib. 11.) As to when property has been assigned by a bill of sale given by the bankrupt, see Chapter on Bills of Sale. Goods taken imdcr a distress, or otherwise riffhtfiilhj in the custody of the law, are not within the clause. [Taylor v. Eckersleij, 5 Ch. D. 740.) As to the necessity of giving notice in the case of equitable deposits to exclude the operation of this clause, see ante, p. 161 et seq.; and as to the effect of change of fu'm, see Ex parte Sprajuc, 6 D. M. & G. 866 ; Ex parte Burton, 1 Gl. & J. 207. • The goods must be in the possession of the bankrupt as reputed owner: Reputed whether they are so or not is a question of fact. [Ex parte Jf'atkins, owner L. R., 8 Ch' 520 ; 42 L. J., Bank. 50.) Possession for any length of time will raise a strong presumption that they are the bankrupt's (see Lingham v. Biffffs, 1 B. & P. 82) ; on the other hand, that presumption can be rebutted by showing the existence of a well-established usage or custom of trade (a custom which the ordinary creditors, and not only those of a particular class, may be presumed to have known) to leave particular goods in the possession of persons who are not the true owners of them [Ex parte Ton-ell, 1 Ch. D. 501 ; 45 L. J., Bank. 100 ; Ex jiartc Emerson, 41 L. J., Bank. 20; Ex parte Watkins, 8 Ch. 520) : such, for instance, as letting furniture on hire to an hotel -keeper [Ex parte Toivell, sujjra ; Craucoiir v. lialtcr, 18 Ch. D. 30). See further on this 524 BANKRUPTCY. Protection of certain trans- actions with bankrupt. By reason of tlie relation back of the date . of bank- ruptcy, as has been already explained on p. 519, the trustee would, were it not for the following clauses, be entitled to all the real and personal property in the pos- session of the bankrupt at that period at which the bank- ruptcy is legally held to have commenced (/). To prevent the injustice that might in consequence be done to innocent parties, it is, by section 94 of the Bankruptcy Act of 1869, enacted that : — " Nothing in this Act contained shall render in- valid, — " (1 .) Any payment made in good faith and for value received to any bankrupt before the date of the order of adjudication by a person not having at the time of such payment notice {m) of any act subject, Kc parte loveriiic/, L. R., 9 Ch. G21 ; Ex pnvfe Hattcrsley, 8 Ch. D. GOl ; Ex parte Wbigjield, 10 Ch. D. i591. Consent of By the expression ' ' true owner, ' ' is meant that person who has either owner. a legal or equitable right to put an end to the apparent possession of the bankrupt {Ex parte Union Bank of Manchester, L. E., 12 Eq. 354 ; 40 Li. J., Bank. 57) ; and, as we have seen, includes an equitable mortgagee (see ante, p. 161). The consent may be implied. See Eobson and Great Eastern Ilailwaij v. Turner, L. R., 8 Ch. 149; Ex parte Ward, ib. 144; 42 L. J., Bank. 17; Ex parte Hay man, 8 Ch. D. 11 ; Ex parte Bright, 10 Ch. D. 5G6 ; 48 L. J., Bank. 81. (0 ItoHch V. G. TF. Rail. Co., 1 Q. B. D. 51 ; Thomas v. Besanges, 2 B. & Aid. 586. {m) The notice may be express or inferred. The following rule is laid down by Melli-sh, L. J., in Ex jmrte Snon-ball (L. R., 7 Ch. 549) : " It ap- pears to us that if a person is proved to know facts which constitute an act of bankruptcy, or is proved to know facts from which a Court or a jury, or any impai'tial person, Avould naturally and proj^erly infer that an act of banlcruiJtcy had been committed, ho ought to be held to have had notice that an act of bankruptcy had been committed, and that the Court ought not to enter upon the inquiry whether he did iu his own mind believe that an act of bankruptcy had been committed, or whether he did in his own luind di-aw the inference that the bankrupt intended to defeat and delay his creditors. A person may have proved to have had notice that an act of bankruptcy Iiad been connnittcd, eitlier by proof that he had received formal notice that an act of bankruptcy had been committed, or by proof that he knew facts which were sufficient to inform him that an act of bankruptcy had been committed. If he is proved to have received a formal notice he is not allowed to escape from the effect of having had notice by saying he had not read it, when he ought to have read it, or that he did not believe it when he had read it ; and we think that if he is proved to have known facta which were sufficient to have APPOINTMENT OF TRUSTEE. 525 of bankruptcy committed by the bankrupt, and available against him for adjudication : " (2.) Any payment or delivery of money or goods belonging to a banki"upt, made to such bank- rupt by a depositary of such money or goods before the date of the order of adjudication, who had not at the time of such payment or delivery notice of any act of bankruptcy com- mitted by the bankrupt, and available against him for adjudication : " (3.) Any contract or dealing (n) with any bankrupt, made in good faith and for valuable considera- tion, before the date of the order of adjudica- inf ormed him that an act of bankruptcy had been committed, he cannot be allowed to escape from the effect of having- had notice by saying he did not draw the natural inference from the facts." A notice to an execu- tion creditor which states that a petition in banki-uptcy against the exe- cution debtor has been filed on a date, at a Court, and by a person named in the notice, is a sufficient notice of an act of bankruptcy to prevent the execution being a protected transaction (sect. 95, sub-sect. 3), since such creditor ought to know that the petition would contain a statement that the debtor had committed an act of bankruptcy. {Lucas v. Dicker, 6 Q. B. D. 84 ; 50 L. J., C. P. 190. See also, on the subject of notice, Rv parte Sc/iultc, L. R., 9 Ch. 409; Somes v. Hallam, L. R., 6 Q. B. 713; 40 L. J., Q. B. 229; Ex parte Gilbey, 8 Ch. D. 248; 47 L. J., Bank. 49.) Notice of an intention to commit an act of bankruptcy will not suffice. Ex parte Arnold, 3 Ch. D. 70 ; 45 L. J., Bank. 130. (n) An attachment of a debt by a garnishee order is not " a dealing " •within this clause. {Ex parte I'illars, re Curtoys, L. E,., 17 Ch. D. 653; 50 L. J., Ch. 691. See also as to what is "a dealing," Ex parte Arnold, supra; Ex parte Borman, re Lake, L. E.., 8 Ch. 57 ; 42L. J., Bank. 20.) The drawer of a post-dated cheque given for payment is under no obligation to stop its payment before its date for the benefit of a third person. If, for instance, before the date of payment the drawer receives notice of an adjudication of bankruptcy, made against the payee since the delivery of the cheque to him upon an act of bankruptcy committed by him before the delivery, he is not bound, for the benefit of the bankrupt's creditors, to give notice to his bankers not to pay the cheque and thus expose him- self to the risk of an action by a bona fide holder of the cheque for value. If the cheque was originally delivered by the drawer to the payee in good faith and for value, and without notice of an act of bankruptcy previously conunitted by the payee, on which an adjudication is subse- quently made, the transaction is protected by sect. 94 (sub-sect. 3) of the BanJiruptcy Act, 1869, and the trustee in the bankruptcy cannot recover the amount of the cheque from the drawer. When a customer pays a cheque to his bankers with the intention that the amount of it shall be at once placed to his credit, and the bankers carry the amount to his credit accordingly, they become immediately holders of the chc que for value, even though the customer's account is not overdrawn. Ex parte Eichdule, Ln re I'almer, 19 Ch. D. 409. 526 BANKRUPTCY. Protection of certain trans- actions en- tered into by or in relation to the pro- perty of the bankrupt. tion, by a person not having, at the time of making such contract or dealing, notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication. " 95. Subject and without prejudice to the provisions of this Act relating to the proceeds of the sale and seizure of goods of a trader (o) and to the provisions of this Act avoiding certain settlements (p), and avoiding, on the ground of their constituting fraudulent preferences certain Proceeds of (o) By sect. 87, "Where the g-oods of any trader have been taken in sale and execution in respect of a judgment for a sum exceeding fifty pounds and seizure of sold, the sheriff, or in tlie case of a sale under the direction of the county goods. court, the high bailiff or other officer of the county court, shall x'etain the proceeds of such sale in his hands for a period of fourteen days, and upon notice being served on him within that period of a bankruptcy petition having been presented against such trader, shall hold the proceeds of such sale, after deducting expenses, on trus-t to pay the same to the trustee ; but if no notice of such petition having been i^resented be sewed on him ■within such period of fourteen days, or if, such notice having been served, the trader against ■whom the petition has been presented is not adjudged a bankrupt on such petition, or on any other petition of ■which the sheriff, high bailiff, or other officer has notice, he may deal ■with the proceeds of such sale in the same manner as he -would have done had no notice of the presentation of a bankruptcy petition been served on him." Avoidance of (^) By sect. 01, "Any settlement of property made by a trader not voluntary being a settlement made before and in consideration of marriage, or made settlements. in favour of a purchaser or incumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife or children of the settlor of property ■which has acci-ued to the settlor after marriage in right of his wife, shall, if the settlor becomes bankrupt within two years after the date of such settlement, be void as against the trustee of the bankrupt appointed under this act, and shall, if the settlor becomes bankrupt at any subsequent time within ten years after the date of such settlement, unless the parties claiming under such settlement can prove that the Bettlor was at the time of making the settlement able to pay all his debts •without the aid of the property comprised in such settlement, be void against such trustee." {^ce Ex 'parte Uuxtable, L.E,., 2 Cli. 54 ; 45 L. J., Bank. 59.) "Any covenant or contract made by a trader, in consideration of mari-iage, for the future settlement upon or for his wife or children of any money or property wherein he had not at the date of his marriage any estate or interest, whether vested or contingent, in possession or remainder, and not being money or property of or in right of his wife, shall, upon his becoming bankrupt before such property or money has been actually transferred or paid pursuant to such contract or covenant, be void against his trustee appointed under this act." " 'Settlement' shall for the purj)oses of this section include any con- veyance or transfer of property." See, on this section, Ex parte JioUand, ri'ciuit, L. R., 17 Eq. 115; Ex parte Cox, re Read, 1 Ch. D. 302. Volun- tary settlements can also be set aside under 13 Eliz. c. 5, where their effect is to hinder or delay creditors. See Twi/ne\'> case, and notes thereto in Sm. L. Ca. 7th ed. vol. 1, p. 12, and the recent case of Ex jjarte Jiassett, Li re Bntterworth, 10 Cli. D. 588. APPOINTMENT OF TRUSTEE. 527 conveyances, charges, payments, and judicial proceed- ings (q), the following transactions by and in relation to (rj) By sect. 92, " Every conveyance or transfer of property, or charge Avoidance of thereon made, every payment made, every obligation incun-ed, and every fraudulent judicial proceeding taken or suffered by any person unable to pay his preferences, debts as they become due from his own monies in favour of any creditor, or any person in trust for any creditor, with a ■view of giving such cre- ditor a preference over the other creditors, shall, if the person making, taking, paying, or suffering the same become bankrupt within three months after the date of making, taking, paying, or suffering the same, be deemed fraudulent and void as against the trustee of the bankrupt ap- pointed under this act ; but this section shall not affect the rights of a purchaser, payee, or incumbrancer in good faith and for valuable consi- deration." The following would seem to be a general summarj- of the law relating to fraudulent preference : — In order to bring a case under this section it must in the first place appear that the transaction, &c. rehed upon as being a fraudulent pre- ference was made ' ' with a view of giving the creditor a preference over the other creditors." These words may be taken as being equivalent in their effect and to bear the same construction as the word " volimtarily" {Ex parte Bolland, 7 Ch. App. 24 ; 20 W. R. 136) under the law prior to 1869. In consideiing, therefore, what is or is not a roluntanj act under this section, the cases decided previous to the act will still be applicable. Very slight evidence of pressure on the part of the creditor will prevent the transaction from being voluntaiy. (Sec Ex parte Tempest, L. E,., 6 Ch. 70; Ex parte Craven, L. E., 10 Eq. 648; Smith v. Pilgrim, L. R., 2 Ch. D. 127 ; Ex parte Winter, 44 L. J., Bank. 107 ; Ex parte Si/monds, 14 Ch. D. 693 ; 28 AY. E. 803.) Any act, on his part, in short, that can be considered as interfering with the debtor's free volition will suffice. Thus, an earnest request by a creditor, although not accompanied by a threat or remonstrance, or very positive demand, would be enough to deprive the payment of that voluntary character which would tend to make it impeachable. (Bacon, V. -C, in Ex parte Blacl-burn, re Cheese- borough, L. E., 12 Eq. 358 ; 40 L. J., Bank. 79.) A threat to bring an action, when the debtor is on the verge of bankruptcy, will not amount to pressiu'e. {Ex parte Hall, In re Cooper, 19 Ch. D. 580.) Payments in the ordinaiy course of trade, the honoring bills of exchange presented at their maturity, the payments of debts which have become due in the usual and customary manner, or payments made in fulfilment of a con- tract, or engagement to pay in a particular manner, or at a particular time, are not open to any objection on the ground of their being voluntary, even althoixgh they were made without anj- express demand by the creditor, unless at the time he had notice of an act of bankruptcy committed by the creditor. {Ibid.) So, also, a jjayment made to avoid a distress being levied, is not a voluntary preference. {Stevenson v. Wood, 5 Esp. 200.) Kor is a payment made in consequence, and under fear of civil or criminal proceedings, though such fear was in point of fact Avithout foundation {Thomson v. Freeman, 1 T. R. 155), a voluntary prefei'ence of a creditor, though it can be set aside as a fraud on the bankrupt law, is not an act of bankruptcy. {Ex 2^(irte Stiibbins, 17 Ch. D. 58.) Not merely must the payment be voluntary, but there must have existed also an intention on the part of the debtor to prefer the creditor {Ex parte Topham, L. E., 8 Ch. 014; 42 L. J., Bank. 57; Ex parte Bolland, L. E., 7 Ch. 24 ; 25 L. T. 648 ; 20 W. E. 136 ; Ex parte London 528 BANKRUPTCY. the property of a bankrupt shall be valid, notwithstanding any prior act of bankruptcy : " (1.) Any disposition or contract with respect to the disposition of property by conveyance, transfer, charge, delivery of goods, payment of money, or otherwise howsoever made by any bankrupt in good faith and for valuable consideration, before the date of the order of adjudication, with any person not having at the time of the making of such disposition of property notice of any act of bankruptcy committed by the bank- rupt, and available against him for adjudica- tion : " (2.) Any execution or attachment against the land of the bankrupt, executed in good faith by seizure before the date of the order of adjudication, if the person on whose account such execution or attachment was issued had not at the time of the same being so executed by seizure notice of any act of bankruptcy committed by the bank- rupt, and available against him for adjudica- tion : " (3.) Any execution or attachment against the goods and County Bank, L. R., IG Eq. 391), and a knoichdge on the part of the creditor that he was being-, in fact, preferred. {Ex parte Keraii, L. R., 9Ch. 752 ; Butcher v. Stead, L. R., 7 H. L. 839 ; 44 L. J., Bank. 120 ; 24 W. R. 4G2 ; 33 L. T. 541.) Under the old law this was not necessary. [Davidson v. Robiuso)i, 3 Jur., N. S. 791.) Under tlie old law it was necessary, in order to impeach the transaction on the ground of it being a fraudulent preference, to show that at the time of making it the debtor contemplated bankruptcy ; and great diffi- culty arose in deciding what was or was not a contemplation of bank- ruptcy. The present section, however, docs away with this ; and in its place requires it to be shown merely that the debtor vas unable to pay his debts, as they became due, from his oicn moyilcs : and that he has become bankrupt icithln three months from the date of the transaction. {Ex parte Bolland, supra; Ex parte Jfathcu's, 25 L. T., N. S. 27G.) This section, as to fraiidulcnt preference, must be clearly understood as applying only where the X)arties stand in the position of debtor and creditor. As regards trust property, or property held for a sj>ecific purpose, or improperly detained from the possession of a third party to whom it has been given up, it has no ap])lication. {Sinclair v. Wilson, 20 Beav. 324 : Ex parte Kelh/, L. R., 11 Ch. J). 30G ; 4S I.. J., Bank. 65 ; 40 L. T. 404 ; Ex parte Stiibbins, 17 Ch. 1). 38 ) PROVISIONS AFFECTING ADMINISTRATION OF PROPERTY. 529 of any bankrupt, executed in good faith by seizure and sale before the date of the order of adjudication, if the person on whose account such execution or attachment was issued had not at the time of the same being executed by seizure and sale notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication." General Provisions affceting Administration of Property. — Conduct of •' The bankrupt shall, to the utmost of his power, aid in the realization of his property, and the distribution of the proceeds amongst his creditors. He shall produce a state- ment of his affairs (r) to the first meeting of creditors, and shall be publicly examined thereon on a day to be named by the Court, and subject to such adjourned public exami- nation as the Court may direct (s). He shall give such inventory of his property, such list of his creditors and debtors, and of the debts due to and from them respec- tively, submit to such examination in respect of his pro- perty or his creditors, attend such meetings of his creditors, wait at such times on the trustee, execute such powers of attorney, conveyances, deeds, and instruments, and gene- rally do all such acts and things in relation to his property and the distribution of the proceeds amongst his creditors, as may be reasonably required by the trustee, or may be prescribed by rules of Court, or be directed by the Coui-t by any special order or orders made in reference to any particular bankruptcy, or made on the occasion of any special application by the trustee or any creditor." " If the bankrupt wilfully fail to perform the duties im- posed on him by this section, or if he fail to deliver up possession to the trustee of any part of his property, which is divisible amongst his creditors imder this act, and which may for the time being be in the possession or under the control of such bankrupt, he shall in addition to any other ()•) Rules 90—92. (s) Rules 5, 96, 111. rj MM 530 BANKRUPTCY. punisliment to which he may be subject be guilty of a contempt of Coui't, and may be punished accordingly." (Sect. 19) (0- Powerof tnis- By sect. 25, it is enacted that, " Subject to the provisions tee to deal £ ^j^- ^^^ ^^^ trustee shall have power to do the following ■with property. ^ ' ^ things : " (1.) To receive and decide upon proof of debts in the prescribed manner, and for such pm-pose to ad- minister oaths : " (2.) To carry on the business of the bankrupt, so far as may be necessary for the beneficial winding- up of the same : " (3.) To bring or defend any action, suit, or other legal proceeding relating to the property of the bank- rupt : " (4.) To deal with any property to which the banki'upt is beneficially entitled as tenant in tail in the same manner as the bankrupt might have dealt with the same; and the sections fifty-six to seventy-three (both inclusive) of the act of the session of the third and fourth years of the reign of King William the Fourth (chapter seventy-four), ' for the abolition of fines and re- coveries, and for the substitution of more simple modes of assurance,' shall extend and apply to proceedings in bankruptcy under this act, as if those sections were here re-enacted and made applicable in terms to such proceedings : " (5.) To exercise any powers the capacity to exercise which is vested in him under this act, and to execute all powers of attorney, deeds, and other instruments expedient or necessary for the piu'- pose of canying into effect the provisions of this act : {() As to discovery of bankrupt's property see sect. 9G, and Hx parte Tatton, 17 Ch. D. 572; Ex parte Bramble, re Tokman, 13 Ch. D. 885. As to examination of -witnesses, sect. 97, Rule 40, sects. 75, 98. By sect. 93, monies in the hands of bankrupt's banker must be delivered up to trustee. PROVISIONS AFFECTING ADMINISTRATION OF PROPERTY. 531 " (6.) To sell all the property of the bankrupt (in- cluding the goodwill of the business, if any, and the book debts due on growing due to the bankrupt) by public auction or private contract, with power, if he thinks fit, to transfer the whole thereof to any person or company, or to sell the same in parcels : " (7.) To give receipts for any money received by him, which receipt shall effectually discharge the person paying such monies from all responsi- bility in respect of the application thereof : " (8.) To prove, rank, claim, and draw a dividend in the matter of the bankruptcy or sequestration of any debtor of the bankrupt." By sect. 26, " The trustee may appoint the bankrupt him- Power to self to superintend the management of the property or of ^pt\o^ any part thereof, or to carry on the trade of the bankrupt manage pro- (if any) for the benefit of the creditors, and in any other respect to aid in administering the property in such manner and on such terms as the creditors direct," By sect. 27, " The trustee may, with the sanction of the Power of committee of inspection, do all or any of the following things : " (1.) Mortgage or pledge any part of the property of the bankrupt for the purpose of raising money for the payment of his debts : " (2.) Eefer any dispute to arbitration, compromise all debts, claims, and liabilities, whether present or future, certain or contingent, liquidated or un- liquidated, subsisting or supposed to subsist be- tween the bankrupt and any debtor or person who may have incurred any liability to the bankrupt, upon the receipt of such sums, pay- able at such times, and generally upon such terms as may be agreed upon : " (3.) Make such compromise or other arrangement as may be thought expedient ^nth creditors, or M M 2 trustee to compromise, &c. 532 ba:nkruptcy. Power of trus- tee to accept composition or general scheme of ar- ranorement. Trustee, if a solicitor, may be paid for services. persons claiming to be creditors in respect of any debts provable under the bankruptcy : " (4.) Make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the property of the bankrupt, made or capable of being made on the trustee by any person or by the trustee on any person : " (5.) To divide in its existing form amongst the credi- tors, according to its estimated value, any pro- perty which from its peculiar nature or other special circumstances cannot advantageously be realized by sale. " The sanction given for the purposes of this section may be a general permission to do all or any of the above- mentioned things, or a permission to do all or any of them in any specified case or cases." And by sect. 28, " The trustee may, with the sanction of a special resolution of the creditors assembled at any meet- ing of which notice has been given specifying the object of such meeting, accept any composition offered by the bank- rupt, or assent to any general scheme of settlement of the affairs of the bankrupt, upon such terms as may be thought expedient, and with or without a condition that the order of adjudication is to be annulled, subject nevertheless to the approval of the Court, to be testified by the judge of the Court signing the instrument containing the terms of such composition or scheme, or embodying such terms in an order of the Court." " A trustee shall not, without the consent of the com- mittee of inspection, employ a solicitor or other agent, but where the trustee is himself a solicitor he may contract to be paid a certain sum by way of per-centage or otherwise as a remuneration for his services as trustee, including all professional services, and any such contract shall, notwithstanding any law to the contrary, be lawful." (Sect. 29.) PAYMENT OF DEBTS AND DISTRIBUTION OF ASSETS. 533 Payment of J)ehU and Distribution of Assets. — "Demands Description of in the nature of unliquidated damages arising otherwise intank^^^ ^ than by reason of a contract or promise shall not be provable ruptcy. in bankruptcy, and no person having notice of any act of bankruptcy, available for adjudication against the bankrupt, shall prove for any debt or liability contracted by the bankrupt subsequently to the date of his so having notice. " Save as aforesaid, all debts and liabilities, present or future, certain or contingent, to which the bankrupt is subject at the date of the order of adjudication, or to which he may become subject during the continuance of the bankruptcy by reason of any obligation incun^ed previously to the date of the order of adjudication, shall be deemed to be debts provable in bankruptcy, and may be proved in the prescribed manner before the trustee in the bankruptcy. " An estimate shall be made according to the rules of the Court for the time being in force, so far as the same may be applicable, and where they are not applicable at the discretion of the trustee, of the value of any debt or li- ability provable as aforesaid, which by reason of its being subject to any contingency or contingencies, or for any other reason, does not bear a certain value. " Any person aggrieved by any estimate made by the trustee as aforesaid may appeal to the Coui't, and the Court may, if it think the value of the debt or liability incapable of being fairly estimated, make an order to that effect, and upon such order being made such debt or liability shall, for the purposes of this act, be deemed to be a debt not provable in bankruptcy, but if the Court think that the value of the debt or liability is capable of being fairly estimated it may dii-ect such value to be assessed with the consent of all the parties interested before the Court itself without the intervention of a jury, or if such parties do not consent by a jury, either before the Court itself or some other competent Court, and may give all necessary directions for such purpose, and the amount of such value when assessed shall be provable as a debt under the bankruptcy. 534 BANKRUPTCY. " 'Liability' sliall for the purposes of this act include any compensation for work or labour done, any obligation or possibility of an obligation to pay money or money's worth on the breach of any express or implied covenant, contract, agreement or undertaking, whether such breach does or does not occur, or is or is not likely to occur or capable of occurring before the close of the bankruptcy, and generally it shall include any express or impHed en- gagement, agreement or undertaking, to pay, or capable of resulting in the payment of money or money's worth, whether such payment be as respects amount fixed or un- liquidated ; as respects time present or future, certain or dependent on any one contingency or on two or more con- tingencies ; as to mode of valuation capable of being ascer- tained by fixed rules, or assessable only by a jury, or as matter of opinion." (Sect. 31.) With certain exceptions made in favour of parochial and local rates and assessed taxes, and in favour of the wages or salaries of clerks or servants, all debts provable under the bankruptcy shall be -paid pari passu. (See sect. 32.) By sect. 34, power is reserved for a landlord to distrain for one year's rent {n). Proof in case of felony. Proof in case of Felony. — It would seem that proof cannot be made by a creditor in respect of a claim arising directly out of a felony until the bankrupt has been prosecuted or a prosecution has become impossible. But it would appear that proof may be made for a claim oidy indirectly connected with a felony, as where bankers al- lowed a customer to overdraw his account, one of the inducements for their doing so being the deposit of cer- tain bills which subsequently turned out to be forged by the bankrupt (r). Distribution of dividends. Dicidcnds. — " Tlie trustee shall from time to time, when (w) Sec In re Thnlfall, IG Ch. D. 271 ; Ex pftrtc rtouict, ib. 22G. ((•) Ex parte Leslie, 20 Ch. D. 131 ; Ex parte Elliot, 3 Mont. & A. 110 ; He Jfaple'.w/:, 4 Ch. D. 150 ; Ex imric Bull, 10 Ch. D. GG7. PROOF liY AND AGAINST SURETY. 53o the committee of inspection determines, declare a dividend amongst the creditors who have proved to his satisfaction debts provable in banki'uptcy, and shall distribute the same accordingly ; and in the event of his not declaring a dividend for the space of six months, he shall summon a meeting of the creditors, and explain to them his reasons for not declaring the same." (Sect. 41.) " In the calculation and distribution of a dividend it shall Provision for be obligatory on the trustee to make provision for debts siding at a provable in bankruptcy appearing from the bankrupt's /, L. E,., 6 Eq. 344 ; In re European Bank, L. R., 5 Ch. App. 358 ; 39 L. J., Ch. 588. iff) Ex parte Todd, 2 Rose, 232 ; Ex parte WUdman, 1 Atk. 109 ; Ex parte Adam, 2 Rose, 36. (A) Id. \l) Ex parte Newton, 16 Ch. D. 330. 538 BANKRUPTCY. Power to pre- Bt/ and against Partner. — " Any creditor whose debt is ro?iS;*one^ sufiicient to entitle him to present a bauki-uptcy petition partner. against all the partners of a firm may present such peti- tion against any one or more partners of such firm without including the others." (Sect. 100.) Power to dis- 101. " Where there are more respondents than one to a a^ain^t som^ petition the Court may dismiss the petition as to one or respondents more of them, without prejudice to the effect of the petition as against the other or others of them." Joint creditor 103. "If one partner of a firm is adjudged bankrupt, pmws^^of ' ^^y creditor to whom the bankrupt is indebted jointly with voting. the other partners of the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors, and shall be entitled to vote thereat, but shall not receive any dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their respective debts" (/). And by rule 76, any separate creditor of any bankrupt shall be at liberty to prove his debt under any adjudication of bank- ruptcy made against such bankrupt, jointly and with any other person. Distinct accounts are to be kept of the joint estate, and of the separate estate, and the separate estate is to be applied in the first place in satisfaction of the debts of the separate creditors : and the joint estate of the joint Joint and creditors: and by sect. 104, "Where joint and separate dcndT '^ ^"" properties are being administered, dividends of the joint and separate properties shall, subject to any order to the contrary that may be made by the Com-t on the applica- tion of any person interested, be declared together ; and the (t) See Ex parle Cooke, 2 P. "Wms. 500. As to what is "joint" and "separate" estate, see Ex parte Bear, 1 Ch. D. ol-l ; 4o L. J., Bank. 221 ; Ex parte Manchcbter Bank, 12 Ch. D. 917 ; 48 L. J., Bank. 94 ; Ex parte Hatcher, 13 Ch. D. 466 ; I)t re Collie, Ex parte Manchenter and County Hank, 3 Ch. D. 481 ; 45 L. J., Bank. 149; Ex parte Buckley, 16 Ch. D. 513. As to proof by firm ag-ainst separate estate of one partner, see Ex parte Sillltoe, 1 Gl. & J. 374 ; Ex parte Harris, 1 Rose, 437 ; and as to proof Ly pai-tner against firm, Ex parte Maude, L. E.., 2 Ch. 550 ; Ex parte SiUitoe, supra ; and as to proof by partner against separate estate of co-partner, Ex parte Maude, .supra ; Ex parte Hhvcn, 6 Ch. D. 235 ; Lacey\. Hill, 8 Ch. D. 441. For full information on this subject, see Ilobson, 717. SET-OFF. 539 expenses of and incident to such dividends shall be fairly apportioned hy the trustee between the joint and separate properties, regard being had to the work done for and the benefit received by each property." Double. Proof. — By sect. 37, " If any bankrupt is at the Proof in date of the order of adjudication liable in respect of dis- distinct *con- tinet (/i) contracts as member of two or more distinct firms, tracts. or as a sole contractor, and also as member of a firm, the circmnstance that such firms are in whole or in part composed of the same individuals, or that the sole con- tractor is also one of the joint contractors, shall not prevent proof in respect of such contracts, against the properties respectively liable upon such contracts " (/). Set-off'. — 39. " Where there have been mutual credits, Set-off. mutual debts, or other mutual dealings between the bankrupt and any other person proving or claiming to prove a debt under his banki'uptcy, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any smn due from the other party, and the balance of such account, and no more, shall be claimed or paid on either side respectively ; but a person shall not be entitled under this section to claim the benefit of any set-off against the property of a bankrupt in any case where he had at the time of giving credit to the bankrupt notice of an act of bankruptcy committed by such bankrupt and available against him for adjudication" {m). [k) The contracts, though they must be distinct, may be contained in the same instrument. Hx parte Honey, L. E., 7 Ch. 178 ; 41 L. J., Bank. 9. (/) On this section, see In re Oriental Commercial Bank, L. R., 7 Ch. 99 ; Ex 2}artc Banco di Tortvgal, L. E., 11 Ch. 717 ; 5 App. Ca. 161 ; 49 L. J., Bank. 33 ; Ex parte Foiilson, De Gex, 79 ; Ex parte Adamson, 8 Ch. D. 807 ; Ex parte Fiudlay, 17 Ch. D. 334 ; oO L. J., Ch. 696. (hj) The transactions must have been mutual ; in other words, it must have been between the same parties and in the same right — thus a debt 540 BANKRUPTCY. Order of dis- Discharge of Bankrupt. — " "Wlien a bankruptcy is arge. closed {n), or at any time during its continuance, Avith the assent of the creditors, testified by a special resolution, the bankrupt may apply to the Court for an order of discharge ; but such discharge shall not be granted unless it is proved to the Court that one of the following con- ditions has been fulfilled, that is to say, either that a dividend of not less than ten shillings in the pound has been paid out of his property, or might have been paid due to a baukrupt from an executor personally cannot be set off against a debt due from the bankrupt to the executor in his representative capacity, and I'ice versa. (See !Stammcrs v. Elliot, L. R., 3 Ch. App. 195 ; Hallett V. Hnlictt, 13 Ch. D. 332 ; Bishop v. Church, 3 Atk. 691 ; Ex parte Morier, 12 Ch. D. 491 ; 49 L. J., Bank. 9.) In the same way a debt due from a partnership cannot be set off against the separate debt of an in- dividual partner. [Ex parte Ticngood, 11 Ves. 517 ; Lanesboroi;s. 547 at liberty to re-enter and expel the bviilder and take pos- session of all building materials then left on the land " as and for liquidated damages," T^'as not a bill of sale within the act, such licence not being " as security for any debt"(.r). Nor is a licence to a vendor to seize furniture or pianos, in default of payment of instalments under an agreement to purchase them on the hire system, imder a bill of sale, for the property in the goods does not pass from the vendor until the completion of the paj^ments {y) . A deed in which, after reciting that Y. was indebted The excej)- to several creditors therein mentioned, that Y., unable to As^fgnments r)ay his debts in full, had offered a composition of 7s. Qd. for the benefit ^ " 01 creditors. in the £ payable by instalments guaranteed by D. B., and which the creditors accepted, it was then stated that D. B. guaranteed the payment of two instalments of ?)S. and 3.S. in the £, and that Y. in consideration thereof granted and assigned all his stock in trade " for the pay- ments of the said sums hereinbefore mentioned in trust for the said creditors," was held to be an assignment for the benefit of creditors, and within the meaning of the excep- tion (s). A nost-nuptial settlement to trustees for the benefit of Marriage JL i- scttlcniGiits, wife and children not made in pm-suance of ante-nuptial ' articles is not within the exception, but operates as a bill of sale and must be registered {a) . A bill of sale of a ship is within the exception, and none Transfers of the less because it has not been registered under the shares Merchant Shipping Act of 1854 (h) . thereof. {x) Ex parte Xewitt, In re Garrard, 16 Ch. D. 522 ; 4-1 L. T. 5 ; and for other instances of licences to take possession not within the act, see Broun V. Batenum, L. R., 2 C. P. 272 ; Blake v. Izard, 16 W. R. 108 ; 2Iorton V. Woods, L. E., 4 Q. B. 293 ; Hale v. Saloon Omnibus Companij, 4 Bvexw 498. {y) Ex parte C'raivcour, 9 Ch. D. 419 ; Crawcoiir v. Salter, 18 Ch. D. £0. {z) General Furnishing and Upholstering Comjjanyy. Venn, 32 L. J., Ex. 220 ; 2 H. & C. 153. («) Fou-ler v. Foster, 28 L. J., Q. B. 210 ; Ashton v. Blachshaw, L. K., 9 Eq. 510. {h) Union Bank of London v. Lenanton, 3 C. P. B. 243. N N 2 548 BILLS OF SALE. Warrants or orders for delivery of goods or other docii- meuts used in the ordi- nary course of business, &c. Grantor must he in posses- sion. After -ac- quired or substituted property. Personal chattels de- fined, s. 4. include fix- tures and growing- crops sepa- rately assigned ; This provision appears to be evidence of an intention of the legislature that while the interests of the persons re- garded by the statute shall be fairly secured, the ordinary mode of business and commercial transactions shall not be unduly interfered with, and the governing words for the latter members of the clause of exceptions are " in the ordinary course of business." Thus, within the exception comes a letter of hypothecation given in the ordinary course of business by a factor and warehouse-keeper pledging cer- tain goods to secm-e a sum of money, no delivery of the goods being made, but a promise to deliver them on the following morning being added at the foot of the letter ((/) ; and also, it is presumed, an agreement by a purchaser to give to the vendor a lien or right connected with the vendor's lien, and analogous to it, if made so as to be a transfer of goods within the ordinary course of business (c). A bill of sale, to be good within the act, must be a document executed by a person in possession of the goods at the time (/). The property in stock in trade afterwards {g) brought into the premises in substitution for, or addition to, that which is there at the time of making the bill of sale, may be passed by the same bill of sale {//), and so in the case of fixtures (/). Personal chattels are defined in sect. 4 (/.) ; and fixtures (other than trade machinery as defined in sect. 5), and growing crops are made personal chattels within the act on/// ulten separatdij asniyncd {k). [d) Ex parte North TFestcrn Bank, L. R., 15 Eq. G9. (c) Ex parte Watson, In re Love, 5 Ch. D. 35. (/) Chapman v. Knight, 5 C. P. D. 314. {g) See note at end of chapter, sects. 4, 5, G, for the proposed alteration in the law as to after- acquired property, p. 566. (/<) Lazarus v. Amlrade, 5 C. P. U. 318 ; 43 L. T. 30 ; CuUi/er v. Isaacs, W. N. 1881, 140. (/) Meax V. Jacobs, L. R., 7 H. L. 481, at p. 491 ; JiaghuU v. Xorman, 41 L. T. 787. (A-) See post. Appendix. FIXTURES AND GROWING CROPS. o4'J Trade macliinerj, as defined in sect. 5 (/), is made per- Sect. 5. sonal chattels within the act, as from the 1st January, ^^^^^[Qg^ 1879, whether separately assigned or not. Separate assignment is defined hy sect. 7 (/) to he where Sect. 7. no interest in the land passes by the same instrument by ag^^nfgnt which the fixtures or growing crops pass (/). what? This definition of separate assignment is made retro- Defmition of ... , . T T , separate as- spective m its application (/), and m such general terms as, signment it is submitted, to apply to all deeds comprising fixtures, [^^gp^^^^^ion! whether trade or other, executed before the commencement of the act (;;?). Although growing crops are mentioned in this provision for the retrospective operation of the rule of construction as to separate assignment, it has no applica- tion in respect of them, for they were not personal chattels under the old act {n), and the inclusion of them in the definition of personal chattels in the present act is not retrospective. No question, therefore, can arise as to growing crops comprised in deeds executed before the commencement of the present act. Registration, therefore, appears to be now necessary to Pro^•isioIls the validity of bills of sale comprising fixtures : — apply .' (a) If executed before the commencement of the present (a) as to act, only where the fixtures (including trade fix- ^\^^^^5 JJ^ J^.^ tures, but excluding growing crops ) (o) comprised Jan. 1879. in them are separately assigned or charged within the meaning of sect. 7 of the Act of 1878(i;). (b) If executed since the commencement of the act, (b) a-^ to (i) as regards trade fixtures (see sect. 6), in all cuted since Jan. 1879. (/) See post, Appendix. (w) See In re Arnujtagc (14 Ch. D. 379) for observations upon the meaning of sect. 7, but there has been no decision exactly in point. («) Brcodom v. Griffits, 2 C. P. D. 212; Ex parte Faync, 11 Ch. D. 539. (o) Brantom v. Griffits, 1 C. P. D. 349; 2 C. P. D. 212; Ex parte Fayne, In re Cross, 11 Ch. D. .539. {p) In re Armytage, 14 Ch. D. 379 ; 42 L. T. 443. The test, under the Act of 1854, as to whether an assignment of trade fixtures required registration was, ' ' had the mortgagee power to deal separately vnXh. or disannex the fixtures?" Ex parte Daylish, L. R., 8 Ch. 1072 ; Ex parte Barclay, L. R., 9 Ch. 576 ; Ex parte Tweedy, In re Trcthoican, 5 Ch. D. 559. 550 BILLS OF SALE. What are fixtiu'es ? Growiug crops after- wards severed. cases (t), wliether tliey are assigned separately or not ; (ii) as regards other fixtures and growing crops only where they are separately assigned as above. It is often a difficult question of fact to decide what are fixtures, and what are moveables. The question will still arise, although it has been much reduced by the new legis- lation as to trade machinery in sect. 5. In a recent case, it has been held that a tramway and steam crane placed upon a quarry and bolted to large stones were fixtures {ii), and by previous decisions it has been held that articles standing merely by their own weight are not fixtures (,r), but where part of a machine is a fixture, and another and essential part moveable, the latter is also a fixture (//) . The fact that the things have been affixed merely for the more convenient user of them, and are removable without injury to the freehold, does not make them the less fixtures (z). Grrowing crops, if assigned together with an interest in the land on which they grow, pass to the grantee without registration of such assignment as a bill of sale («) ; but if afterwards severed by the mortgagor while in his posses- sion are no longer secured to the grantee by the deed, but become personal chattels under it and subject to the act, even thougli the assignment provides that the mortgagor shall not remove them (/>). (t) This appears to be the meaning of the section, though there has been no decision upon it as yet. See the section, Appendix. (u) In re Annijtagc, L. R., 11 Ch. D. 379 ; 42 L. T. 443. (.«•) Mather v. Frascr, 2 K. & J. 536. (//) Ibid. And for otlicr decisions as to what are fixtures, see Fisher on Mortgages, 3rd edit. p. 30 ; and MclropolUan Cuioities Society v. Broun, 26 Beav. 454 ; E.v parte Astbunj, L. E.., 4 Ch. G30 ; Longbottom v. Bern/, L. K., 5 Q. B. 123; Turner v. Cameron, id. 30G ; llnlland v. Hodgson, L. R., 7 C. r. 348 ; Haley v. I[an>merslcy, 3 Dc Q., F. & J. 5S7 ; Beg. v. Inhabitants of the J'uri.sh of Lee, L. R., 1 Q. B. 241. (r) C'/imie v. Jf'ood, L. R., 3 Ex. 257, following Cullwick v. Swindell, L. R., 3 Eq. 249 ; and see Holland v. Hodgson, supra, and cases there cited. {a) Brantom v. Grifits and Ex parte Taync, supra; In re I'hiUips, 16 Ch. D. 104. {!>) Ex parte National Mercantile Bank, IG Ch. D. 104; SOL. J., Ch. 231. IXSTRUMEKTS GIVIXG VOWEIIS OF DISTRESS. 551 Of those things which the act excepts from tlie definition Exceptions ; of i")ersonal chattels a mortgage of a share and interest in a partnership has been held a charge on a "chose in chosesin action," and so not affected by the Bills of Sale Act, or bj ^''*'''''' the Bankruptcy Act, 1869, sect, 15(c); and "stock or stock or pro- produce" has been suggested to mean produce already "^^' severed from tlie land and which might be delivered, although by the covenant or custom it ought not to be removed from the farm (d). Before the commencement of the present act the fol- Sect. g. lowing transaction, by which a power of distress was given 1^^*^^^™*^^*"^ to the mortgagee, was held to be a fraud upon the bank- of distress. rupt law as being a secret bill of sale. A mortgage of smelting works to secure the repayment of an advance of 55,000/. contained, in addition to the ordinary clauses, a covenant by the mortgagee that if the interest was punctually paid as it became due, and all the covenants contained in the deed (other than the covenant for pay- ment of the principal) were performed, and the mortgagor should not have become bankrupt or have taken proceed- ings for liquidation by arrangement or composition wdth his creditors, and should not have parted with the pos- * session of the mortgaged property, and should not have ceased to carry on his business thereon, then the mortgagee would not for a period of five years require payment of the principal. And the mortgagor attorned tenant from year to year to the mortgagee, in respect of the mortgaged property, at the yearly rent of 20,000/. to be paid half- yearly on the days on which the mortgage debt was payable. The deed was not registered under the Bills of Sale Act. It was admitted that the letting value of the property was not more than 8,000/. per annum. Four months after the execution of the mortgage the mortgagor filed a liquidation petition, and the mortgagee afterwards (c) lie Bainhidgc, 8 Ch. D. 218. \d) Brantom v. Griffits, 1 C. P. D. at pp. 355, 357 ; and see Hawlclns v. Walrond, 1 C. P. D. 280 ; IVcbstrr v. Foh-o; L. R., 2 P. C. 60. 552 BILLS OF SALE. Sect. 8. The requi- sites. i. Attestalion. Sect. 10, subsect. 1. Who may be attesting ■witness. claimed the right to distrain the chattels upon the mort- gaged property for a year's rent under the attornment clause : — It was held, that the arrangement was a mere device to give the mortgagee an additional security in the event of the mortgagor's bankruptcy, and was therefore in that event void as a fraud upon the bankrupt law, and that sect. 34 did not protect a distress levied for a mere sham rent {e). This principle of the bankrupt law seems to be by this section imported into the Bills of Sale Act, to the operation of which transactions of the above nature, as well as mere bare powers of distress, are now subject. In cases where there is a tenancy the criterion will be what is " a fair and reasonable" rent (/). By sect. 8 (r/), the requisites of a bill of sale are set forth ; they are attestation, registration and the statement of the consideration ; and non-compliance with these pro- visions renders a bill of sale void, as against the persons and in respect of the property therein specified. The requirement of attestation is a new provision, and the mode of conforming to it is set out in sect. 10, sub- sect 1 (//), which requires a solicitor to attest the execution, and to state in his attestation that lie has explained the effect of the bill of sale to the grantor (/). A grantee under a ])ill of sale, though a solicitor, cannot liimself be the attesting witness to such bill of sale (/.•) ; but the grantee's solicitor (/) or his clerk [m) may. The subsection is satisfied by the attesting solicitor's statement that he has explained the bill of sale without having done {e) Ex parte Wdliams, In re TJtompmn, 7 Ch. D. 138. (/) Stockton Iron Furnace Com pinu/. In re, 10 Ch. D. 335; 48 L. J., Ch. 417. And see Morton v. Woods] L. R., 4 Q. B. 293, at p. 307. [g) See Appendix, post. The proposed act provides for the repeal of this section and tlie enactment of new provisions, see post, p. 565. (/;) See Appendix. (j) The attestation may be proved by tlir attesting- solicitor, or by an oiiice copy under sect. l(j, see Appendix. See sect. 9 of the projiosed act, post, p. 5GG. (A) Seal V. Claridge, 7 Q. B. D. olG. (/) Pencm-den v. Roberts, W. N. 1882, 38. (w) milv. Kirkwood, W. N. 1880, 23; 28 W. R. 358. But sec the proposed alteration in the law, post, p. 5GC, sect. 9. REGISTRATION. 653 SO in fact (o), though, semble, in such case the attesting BoHcitor would render himself liable to civil and penal consequences (o) , Section 10, subsection 2 (;;), provides the mode of regis- ii. Rcgistra- tering a bill of sale under this act. It must be registered '''""• within seven clear days after its execution. Under the subsect.'2. Act of 1854, it was twenty-one days. The original bill of sale, as well as a copy, and the affidavit, are to he presented to the registrar ; but it seems that only the bill or a copy need be Jiled with the affidavit (q). The affidavit in addition to the matters hitherto necessary must swear to the due execution and attestation of the bill of sale (r). The bill of sale or copy, as the case may be, and the affi- davit must be filed at the same time («) . The requirements of a description of the residence and Description ,. r, ,-, , ^ 11 1' •: • of residence occupation oi the grantor and every attesting witness is a and occu- re-enactment of the previous law (f). The extent of parti^ pation. cularity required in the statement of residence is " a reason- ably sufficient description of a residence which would guide the inquiries of a person who may be interested in knowing whether the individual whom he proposes to trust has made any disposition of property by way of a bill of sale" (u), and of the description of the occupation it has been said, " the object of 17 & 18 Yict. c. 30, s. 1, is to give the assignee and creditor a true idea of the position in life of the assignor, and misdescription or absence of (o) Ex parte Xaiional Meycantile Bank, 15 Cli. D. 42. (ju) See Appendix. The proposed act provides for local registration, see post, p. 567. {q) See Appendix, sect. 10, subsect. 2, and sect. 12, in Ex parte Carter, 12 Ch. D. 908, a copy only seems to have been filed, see ihid. page 909. By sect. 16, office copies of the bills of sale or copies filed, and of the affidavits filed therewith, and of the affidavits of renewal on prima facie evidence thereof, and of the fact and date of registration. (r) For instances of sufficient and insufficient affidavits, see Ex parte Carter, 12 Ch. D. 908 ; Sharpe v. Birch, 8 Q. B. D. 111. {h) See the section, and GrimlM v. Brcndoii, 6 C. B., N. S. 698; 28 L. J., Ex. 333. (t) Sect. 10, subsect. 2, see Appendix. And see 17 & 18 Vict. c. 36. \n) Jones V. Harris, L. R., 7 Q. B. 157 ; Briggs v. Boss, L. E,., 3 Q. B. 268 ; Tlior}}e v. Browne, L. R., 2 H. L. 220. See also Heicer v. Cox, 8 E. &E. 428; 30 L. J., Q. B. 73. 554 BILLS OF SALE. true description in regard to the occupation is substan- tial" (c). It is not sufficient that the bill of sale contains the required descriptions, the affidavit must also contain them (.r), and tlie description of every attesting witness is necessary if there are more than one (y). If, however, the affidavit sufficiently refers to the description in the bill of sale or copy to which it is annexed, and of which it forms part {z) , to incorporate it by reference, an incomplete de- scription or even omission of description in such affidavit may be thus supplemented (r/). A contradictory descrip- tion, however, or mis-statement cannot be thus corrected by reference {b) . The description in the affidavits of the residence and occupation of the grantor must be that which is true at the time of swearing the affidavit, not of giving the bill of sale (f). A statement in the affidavit that the grantor " was until lately" a commercial traveller was held insuffi- cient, as being vague and misleading {d). It is a sufficient description of the residence of the grantor or attesting witness to state his place of business, or if he be a clerk that of his employer {c) . An erroneous addition appended to a description itself sufficient will not vitiate it (_/"). Thus " New Street, Blackfriars, in the coimty of Middle- sex," and " AetoTi, in the city of London," were held good, a sufficiently certain description remaining after rejection of the erroneous additions (/). (;•) Alkn V. Thompson, 1 H. k N. 16 ; 25 L. J., Ex. 249. \x) Hatton \. English, 1 E. & B. 94 ; 26 L. J., Q. B. 161 ; FIckard v. Ftrbi/, 5 H. & N. 9 ; 29 L. J., Ex. 18 ; Brodrick v. Seal,; L. R., 6 C. V. 98. (,y) See the subseet. Appendix. Xlchohon v. Cooper, 27 L. J., Ex. 393 ; I'lcard v. Blarringc, 1 Ex. D. 364. (z) Baiibun/v. White, 2 II. & C. 300; 32 L. J., Ex. 2r)8. [a) Routhv. Roublot, 1 E. & E. 850; 28 L. J., Q. B. 240; Jones \. Harris, supra; Ex parte Maelcenzie, 42 L. J., Bank. 25. {h) Murray v. Mackenzie, L. R., 10 C. P. 625. {c) Button V. O^Keill, 4 C. P. D. 354, disapproving' of The London and Westminster Loan, ^-c. Co. v. Chase, 12 C. B., N. S. 730 ; 31 L. J., C. P. 310. (d) Castle v. Boicnton, 5 C. P. D. 56. (r) Grant v. Shaic, L. R., 7 Q. B. 700; Attcnhorouqh v. Thompson, 2 H. & N. 659 ; 27 L. J., Ex. 23 ; Blaekwell v. England, 27 L. J., Q. B. 124. (/) Hewer \. Cox, 30 L. J., Q. B. 73; Blottnt v. Llarris, 4 Q. B. D. 603. DESCRIPTION OF RESIDENCE AND OCCUPATION. 665 A company has been held properly described as re- siding at its principal office {g). Casual or temporary occupation need not l)e stated, but only the fixed business or avocation by which a man gains his living (/). "Where the description is prima facie sufficient, the onus lies on those who say it is not to show that the person is not wliat he is described (/.•). Apparent absence of occupation will not, if there be in fact occupation, justify non-description of it (/), but if no occupation is stated, the onus of proving occupation is on those who impugn the validity of the Inll of sale (m). "Grentleman" has been held to sufficiently describe a person who had formerly been a coal agent, but at the time of the bill of sale was out of employment {ii), and a medical student who had only occasionally acted as a sur- geon's assistant (o), but not to be a sufficient description of a solicitor's clerk (p), though formerly practising as an attorney (q), or where he was retained to make out the accounts, and send out the bills of a dissolved firm to which he had been clerk {>•), nor of a clerk in the audit office, though in respect of the furniture at his private house (s). (ff) S/iears y. Jacob, L. E., 1 C. P. 513; and for other decisions upon the siifiiciency of the description of residence, see M'C'iie v. James, 19 W. R. 158; BriggsY. Boss, L. E., 3 Q. B. 268; Be Hans, 10 Ir. Ch. Rep. 100; 1 L. T., N. S. 467; Kc payfc McHaltle, In re Wood, 10 Ch. D. 398 ; 48 L. J., Bank. 26 ; Cooper v. Ibhcrso», 44 L. T., N. S. 309 ; Ex parte Wolfe, 44 L. T., N. S. 321. {i) Sutton V. Bath, 3 H. & N. 382; 27 L. J., Ex. 388; Ex jjarte Xational 3IcrcantUc Bank, 15 Ch. D. at p. 50. {Ic) Grant v. Shaw, L. R., 7 Q. B. 700. [I) Adams v. Graham, 33 L. J., Q. B. 31. (;h) Smith v. Chase, supra, at p. 60; and Siftton v. Bath, supra. But see a doubt expressed on this point in Castle v. Doicnton, 5 C. P. D. at p. 57. («) Morewood v. Soath Yorkshire Railtvarj and River Dun Compa:i\j, 3 H. &N. 798; 28 L. J., Ex. 114. (o) Sutton V. Bath, supra ; and see, for other instances of sufficient descriptions, Smith v. Chase, 1 C. P. D. 60 ; Lamb v. Britce, 45 L. J., Q. B. 538 ; Grant v. Shaw, L. R., 7 Q. B. 700 ; Ex parte Xational Deposit Bank, 26 W. R. 024 (C. A.). {p) Bryden v. Hope, 9 W. R. 18 ; Brodriek v. Scale, L. R., 6 C. P. 98. \q) Tuton V. Sanoner, 27 L. J., Ex. 293. (?■) Benle v. Tennant, 29 L. J., Q. B. 188. (*) Allen Y. Thompson, 25 L. J., Ex. 249. 556 . BILLS OF SALE. An attesting witness's description of himself as deponent is a sufficient affidavit of his description {f). An affidavit describing the grantor's residence and occupation to the best of the belief of the deponent was held sufficient {u). Shareholders in a company cannot be attesting witnesses to a bill of sale given by the company (;r) . Sect. 10, If a bill of sale is given subject to a defeasance, condi- subsect. 3. ^-Q^ Qj, declaration of trust not inserted in the body of the coBdition or bill, such defeasance, condition or declaration of trust must declaration of -j^g written ou the same deed as the bill itself, and before registration, and must be also set forth in the copy (z). This is a re-enactment of the same provision in sect. 2 of the Act of 1854, under which it has been decided that it is not necessary to disclose, on the face of the bill of sale, the fact that the person appearing as the grantee is only the trustee for the person who really lent the money {a) ; that when a bill of sale was given to secure a sum of money payable on demand, and a parol agreement existed for the payment of the debt by small w^eekly instalments, this parol agreement amounted to a defeasance or condition within the act, and the want of registration of it avoided the bill of sale against the tntstee in bankruptcy (b) ; that, where a bill of sale was given to secure 130/., 100/. only being advanced, 30/. being charged for interest and bonus, and a written memorandum was signed at the same time by the mortgagor engaging to pay the 30/. in full, not- withstanding the money secured might be repaid on the mortgagee's rights enforced before the expiration of the time limited for payment, this memorandum was neither defeasance, trust, nor condition within the meaning of the act, and did not in any way affect the validity of the bill (0 ,Sl(idd('>i V. Scrjanit, 1 F. cS: F. 3-22 ; 27 L. J., Ex, 392; Wilcoxon v. Searbij, 29 L. J., Ex. Ii34. (!<) Roe V. Bradshaw, L. R., 1 Ex. 10(3. {x) Shears v. Jacob, L. R., 1 C. P. 513 ; DetJ'dl v. White, L. R., 2 C. T. 144. {z) Sect. 10, subs. 3, post, Appendix. \a) Rohimon v. Co/linfjwoo>/, 17 C. B., N. S. 777. (A) Ex parte Sonlhani, L. R., 17 Eq. 578. PRIORITIES, 557 of sale (c). " If this is in suLstanco any tiling, it is an additional bill of sale, of whicli the grantee cannot avail himself if it is not registered, but the non-registration of an additional bill of sale does not affect a previous registered one" (d). "A condition in every case denotes Condition, something which prejudicially affects the interest of the donee" {e), or, in other words, " the subsection being meant to provide only for cases where some benefit is reserved to the grantor" (/). Provision is made in sect. 10 that where two or more Priority, bills of sale are given in respect of the same chattels they ^^^ "^^ y^*^*- shall have priority by the date of their registration [y). This applies not only as between registered but as between registered and unregistered bills of sale {h), Registration, therefore, is now necessary as between mortgagees, even within the seven days' limit. Under the Act of 1854, ^^ & 18 Vict. . . c. 36. however, the operation of which is preserved as to bills of sale executed before 1st January, 1879, the priorities of bills of sale in respect of the same goods were determined by the date of their execution, for imder that act, as under the present (i) independently of the priority clause which is new, registration was necessary only as against the per- sons mentioned in the act (A-). A bill of sale, therefore, though unregistered gave a valid title as against a subse- quent registered bill of sale (/), but this rule was affected by the event of the grantor's bankruptcy, or of execution upon his goods, in which cases the unregistered bill would be entirely displaced (except as regards any goods the holder might have seized under it before the bankruptcy (f) Ex parte Collins, In re Lees, L. R., 10 Cli. 307. {(l) Ibid., per James, L. J. [e] Ibid., at p. 372. (/) Robinson v. Colling icood, supra. {g) Sect. 10. See post, Appendix. \h) ConeUij V. Steer, 7 Q. B. D. 520 ; Lyons v. Tucker, id. 523. (0 Davis V. Goodman, L. R., 5 C. P. D. 128 ; 49 L. J., C. P. 344. [k) Ex imrte Allen, In re Middleton, L. R., 11 Eq. 211 ; Uills v. Shepherd, 1 F. & F. 191 ; Barker v. Aston, id. 192. The proposed act, however, provides for the absolute avoidance of all bUls of sale, unless attested and registered. See p. 56G. (/) Richards v. James, L. R., 2 Q. B. 285, at p. 291. 5o8 BILLS OF SALE. Transfer or assignment of registered bill of sale. Sect. 11. Rene-R-al of registration. Sect. 14. Rectification of register or execution) {m), and the later registered bill would be good against the trustee or execution creditor, and thus obtain a priority which, but for such bankruptcy or execu- tion, it would not have had («). A transfer or assignment of a registei'ed bill of sale need not be registered. Thus where by a deed, between the two parties to a bill of sale (part of the sum secm'ed by which had been paid off) and the plaintiff, the security was transferred and the goods assigned to him on his paying off the amount remaining due on the bill, and making a further advance to the grantor ; it was held by the Court of Appeal that, whether or not the deed was an effectual security, without registration, for the fresh advance, it was, as to the amount which remained due on the former bill of sale, a transfer and valid to that extent without registra- tion under the Bills of Sale Act, 1878, so as to entitle the plaintiff to the goods (o) . Sect. 11 (p) provides for the renewal of registration every five years. A transfer or assignment of a bill of sale does not of itself necessitate a renewal of registration, and we have seen that such transfer or assignment does not itself require registration ((). Grreat care must ho taken in accurately complying with iii- The con- ike requirement that the consideration must be set forth (x). It must be set forth in the body of the deed ; if not truly stated there, a correct statement contained in a receipt at the foot of the deed will not satisfy the statute, such re- ceipt not being part of the deed (?/). The consideration required to be stated is that which the grantor receives for giving the bill of sale, not necessarily the amount to be seciu-ed by the deed (;;) . If part of the consideration stated in a bill of sale is, by the grantor's direction given at the time of the execution of the deed, applied in satisfaction of a then existing debt owing by him, the money so paid may be properly stated in the deed to be then paid to him {a). The amount of the expenses incident to the preparation of the bill of sale, is not such a " then existing debt owing by the grantor," and the deduction of it from the amount stated to be advanced will invalidate the biU of sale {b) ; so also will deductions by way of future interest (c), bonus, or commission {d). Subject to the above restrictions, and to the necessity of setting forth the real consideration, the act does not require a collateral agreement between the grantor and grantee as to the application of the considera- {t) Post, Appendix, sect. 14. [it] Post, Appendix. (sc) Sect. 8, see Appendix. (i/) Ex jMi'te Charinfj Cross Bank, 16 Ch. D. 35. {z) Ex parte CkaUhior, 16 Ch. D. 260. [a) Ex parte Erith, In re Coichion, W. N. 1882, p. 5, overruling J.r parte National Mercantile Bank, 15 Ch. D. 42, and Ex parte ChalUnor, 16 Ch. D. 260, so far as they decided that the expenses incidental to the deed might be deducted from the amount stated to be advanced. And see In re Spindler, 19 Ch. D. 98. [b) Id., and see Ex parte Molph, In re Spindler, 19 Ch. D. 98. [c) Ex parte Charing Cross Bank, 16 Ch. D. 35; Re Barker, 44 L. T. 113. [d) Hamilton v. C/iaine, 7 Q. B. D. 1, 319. 560 • BILLS OF SALE. tlon to be set forth (e), and it is quite competent to the grantor to direct Avhat shall be paid to himself, and what shall be paid to others on his behalf (/'). A distinction has also been made between strict literal accuracy, and accuracy with respect to either the legal or the business or mercantile effect of the matters set forth {g). Thus, where the consideration was stated to be 7,'VjOI. now paid, though in fact no money passed, but during several years there had been several loans and advances to the grantor by the grantee, and upon a statement of account between them this sum was found to be the balance due, which sum with interest the grantor by the bill of sale promised to pay to the grantee on demand, by notice in writing ; — it was held, that the consideration was stated with substantial accuracy, the legal and mercantile and business effect of the transaction being given, vi^., that the giving of the deed wiped out the old debt, and constituted the balance thus found due a new debt payable only after demand in writing — thus giving a new credit {(j) . Avoidance. Non-compliance with the requirements of the act as to attestation, registration and trutliful statement of con- sideration renders a bill of sale void, not as against all (1) As against the world, but only as against trustees or assignees in '^'^n^^/'^'^" bankruptcy or liquidation, or under assignments for the benefit of the creditors of the grantor ; Sheriffs' officers or other persons seizing in execution of any pro- cess of Court ; Execution creditors {/i). This want of attestation and explanation does not avoid a bill of sale (2) In respect as between grantor and grantee (/) ; and in respect of pos?esfioi%r chattels which after the expiration of seven days from the apparent giving a bill of sale of them are found, in the event of a possession, of ° grantor. (f) Ex parte National 3[erca)itUe Bank, 15 Ch. D. 42; Ex parte Eolph, In re Spindlcr, 19 Ch. D. 98. (/) Hamlijn v. Bdtelci/, h C. P. D. 327. {g) Credit Company v. I'ott, G Q. B. D. 29.5. (/t) Sect. 8, see Appendix. See, however, sect. 8 of the proposed act, p. 565. (i) Davis V. Goodman, 5 C. P. D. 128; 49 L. J., C P. 341; and see In re Knott, 7 Ch. D. 549, n. 1 ; In re d'Epineal, 20 Ch. D. 217. APPARENT POSSESSION. 561 bankruptcy or liquidation petition being filed (J), or an as- signment made for the benefit of creditors, or an execution levied, in the possession or apparent possession of the grantor (A-). Apparent possession is defined by sect. 4 (l) . The words Apparent of this interpretation clause are the same as in the Act of P"''^°^^^°°- 1854, and the meaning of them has been said to be, " that the goods shall be deemed to be in the apparent possession of the vendor as long as they are on the premises occupied by him, if nothing more has been done to them than mere formal possession taken" {m). Thus, where a person sold by a written agreement some timber on a private wharf and some timber on a public wharf, and by another written agreement some furniture in a house belonging to him, part of which he had previously used as an office, and occasionally slept in ; and the vendee took possession of the key of the private wharf and sold some of the timber lying there, and took persons to the public wharf (the key of which remained in the hands of the wharfinger) to look at the timber with a view to sale, and occasionally used the rooms, the use of which the vendor had discontinued, and paid the servant's wages as stipulated ; it was held that there was no possession or apparent possession of the timber either at the private or public wharf, or of the furniture within the Bills of Sale Act, so as to render them liable to seizure under an execution against the vendor. Bram- well, B., saying, " Here a great deal more had been done to them than formal possession taken" {n). It is "formal possession" only, for instance, where a Distinction between for- (./) Under the Act of 1854 it was as to goods in the apparent possession of the grantor at the time of the bankruptcy, and the title of the trustee had relation back to the commencement of the bankruptcy. '^Ex parte Attwater, 5 Ch. D. 27. The protecting clauses of the Bankruptcy Act, 1869, ss. 94, 95, have no operation as regards a transaction which is made void by the Bills of Sale Act. Ibid. (k) Sect. 8, see Appendix. See sects. 8 and 9 of the proposed act, post, pp. 565, 566. (l) See Appendix. (>«) Gouffh V. Everard, 32 L. J., Ex. 210. («) Ibid., and Smith v. Wall, 18 L. T., N. S. 183. G. 562 BILLS OF SALE. mal and real "broker is simply put in to prevent removal, and allows tlie possession. debtor and his family to use the goods and everything to go on as before (o) . But dealing with the goods as by packing them up for removal is among other things an assertion of actual possession (7;), and so where the grantee of a bill of sale takes possession of the goods comprised in it, and advertizes them for sale £fe the goods of the grantor sold under a bill of sale, the goods, though still in the house of the grantor, are no longer in his apparent possession {q) ; but where, in a similar case, a sale was announced by placards, from which, however, it could not be inferred that the sale was made under a bill of sale, and not by the grantor himself, it was held there was nothing more than formal possession {)■). There must bo The "occupation" rcfeiTed to in the definition of appa- Eictnal lie facto . , . . 117/., ;• /a mi occupation, rent possession [s) is actual ae facto occupation [t). Inus the grantor of a bill of sale, not registered, was tenant of rooms where the goods comprised in it were, but he resided elsewhere. Having made default, he gave the keys of the rooms to the grantee, who opened them and put his name on some of the goods. None, however, were removed : — Held, that the grantor did not "occupy" within the meaning of the act, and that the bill of sale was valid as against the execution creditor {u). Demand of When the grantor, after default in payment, and after possession bv^ ^^^^^^^ 0^ possession and threat by the grantee, remained grantee. in possession until the filing a liquidation petition, it was held that the grantee's title to and demand of possession did not take the goods out of the possession of the grantor (0) Ex parte Jay, L. E., 9 Ch. 697, at p. 701 ; Ex parte Ilooman, L. R., 10 Eq. 63 ; Ex parte Zcivis, L. R., 6 Ch. 626 ; >Scal v. Claridgc, 7 Q. B. D. 516. {p) Ex parte Jarf, supra. And see Ex parte Mortlock, In re Basham, W. N. 1881, p. 161. {q) Emanuel \. Bridgcr, L. R., 9 Q. B. 286. (/■) Ex parte Leivis, L. R., 6 Ch. 626. And see also Elclcard v. Mar- riage, 1 Ex. D. 364, and Js/iton v. lUackshaw, L. R., 9 Eq. 510, (a) Sect. 4, post. Appendix. (/) liol'uison V. Jir'ujfjs, L. R., 6 Ex. 1. [i() Ibid. But sec Ancona v. Hogen, infra. DUPLICATE BILLS OF SALE. 563 witliin the act (x). Semble, if, in the same circumstances, the goods were held for the grantor hy a bailee, the grantor would still be in possession within the act {//). Possession by the sheriif under an execution issued Possession by either by the grantee or by a third person, even though l^^,^^ api^i-'ent the grantee has himself taken no possession, takes the possession, goods out of the apparent possession of the grantor (s) . Under the Act of 1854, goods that were left in the Order and apparent possession of a grantor of a bill of sale, but which were protected by the registration of the bill, were still liable to be claimed by the trustee in bankruptcy by the application of the order and disposition clause of the Bankruptcy Act, 1869 {a). By sect. 20 of the present act, Sect. 20. chattels comprised in a duly-registered bill of sale are exempted from the application of that principle (i). By sect. 9 subsequent bills of sale executed in renewal Sect. 9. of prior unregistered bills within or on the expiration of f^^^^^^f^*^ seven days from their execution are rendered void, except so far as they may be bona fide given to correct mistake {c). This has put an end to the practice which prevailed under the former act of executing successive bills of sale each within twenty-one days from the execution of a prior bill, and so avoiding the necessity of registration {d). It has been held, however, that this section does not apply to duplicate bills of sale executed after the expiration of the seven days therein mentioned {e). Of course, in the event of bankruptcy, a duplicate or the last bill of sale of a series (.r) Ancona v. Holers, 1 Ex. D. 285. ly) Bid. But this seems doubtful and was not necessary for the deci- sion of the case. [z) Ex imrte Saffery, 16 Ch. D. 668; Ex parte Mutton, L. E., 1-1 Eq. 178, not followed. (a) 32 & 33 V^ict. c. 71, s. 15, subs. 5. \b) See post, Appendix. The proposed act, however, provides for the repeal of this sect. See post, p. 565. (c) See sect. 9, post, Appendix. {d) Smalev. Bun; L. E., 8 C. P. 64; Ramsdeii v. Lnpton, L. R., 9 Q. B. 17 ; Ex parte Harris, L. R., 8 Ch. 48. [e) Carrard v. Meelc, 43 L. T. 760. oo2 564 BILLS OF SALE. 1. Landlord's right of dis- tress. 2. Grantor left in posses- sion of goods of trade. 3. The bank. ruptcy laws. would be liable to be avoided, as being given for a past consideration (/). Independently of the provisions of the Bills of Sale Act the grantee of goods under a bill of sale is subject to cer- tain risks affecting tbe value of bis security. 1. The landlord's right of distress is paramount. 2. Where the goods which are the subject of the bill of sale are trade goods or things which a person in possession may be presumed to have the right to dispose of in the ordinary course of business, if such goods are left in the possession of the grantor a sale by him in the ordinary course of his trade or business will give to a bond fide vendee, who has taken possession of them, a good title to them against the grantee under his bill of sale, although registered ({/). If the sale to and removal by the vendee be not in the ordinary course of business he will have no title against the biU of sale holder (//). 3. Under the bankruptcy laws a bill of sale, though complying with all the requisites of the act, may some- times be declared void as a fraud upon those laws. Thus, a conveyance of a person's whole (/) property to secure a past debt is an act of bankruptcy, and a bill of sale so given will be declared void against the trustee in bankruptcy (A-) . Within the principle above mentioned, and therefore void against the trustee, is a bill of sale which is the last of a series of successive bills given in renewal or substitution (/). A bill of sale, however, (/) Ex parte Cohen, L. E., 7 Ch. 20 ; Ex parte Stevens, L. E., 20 Eq. 786 ; Ex parte Furber, f, Ch. D. 181 ; Ex parte Payne, 11 Ch.^D. 539. (g) National Mercantile Bank v. Hampson, 5 Q. B. D. 177 ; Taylor v. M'Keand, 5 C. P. D. 358. (/i) I'aync v. Fern, G Q. B. D. 620 ; Taylor v. M'Keand, supra. («■) Book debts must be taken into consideration. Ex parte Burton, 13 Ch. D. 102 ; and see Ex parte Uaivkcr, L. R., 7 Ch. 214. (A) Ex parte Uawker, aw^va.; In re n'ood, 1,. E,., 7 Ch. 302; Ex parte Fisher, id. 636; Ex parte Bolland, 8 Ch. D. 230; Ex parte Kilner, 13 Ch. D. 245 ; Ex parte Burton, id. 102 ; Crcnccour v. Salter, 18 Ch. D. 30. And see 32 & 33 Vict. c. 71, s. 6, subs. 2. Independently of the bankruptcy law a past debt is a sufficient consideration, see cases cited. (/) Vide ante, p. 563. And see Ex parte Cohen, L. E., 7 Ch. 20; Ex parte Stevens, L. E., 20 Eq. 786 ; Ex parte Furber, 6 Ch. D. 181 ; Ex parte Tayne, 11 Ch. D. 539. AGREEMENT TO GIVE BILL OF SALE, 565 will not be void as given for a past debt if there be at the same time a substantial fresh advance, of which the debtor has the advantage (m), nor if it is executed in pursuance of an agreement made at the time the consideration arose or the money was advanced (;i). But such agreement to give the bill of sale must be absolute and peremptory (o) ; if made upon a condition that the bill was not to be exe- cuted till the lender "lost confidence" in the borrower (^;), or if the execution of the bill of sale to be given in pur- suance of it is purposely postponed until the trader is in a state of insolvency, in order to prevent the destruction of his credit, the agreement will not support such bill of sale against the trustee in bankruptcy ($■). Note. — There is a bill of tliis session in progi-ess entitled the BUls of Sale Act (1878) Amendment Bill, by which, if jjassed into law, Tery considerable changes will be effected with regard to bills of sale. The principal provisions of it are the following : — "Every biU of sale made or given in consideration of any sum under EiU of sale fifty pounds shaU be void" (sect. 12). lender oQl. to The repeal of ss. 8 and 20 of the Act of 1878, and all other enactments ^ ^ "^ * of that act which are inconsistent with this act ; but the validity of any- „ P •,' ^„ n thing done or suffered under that act before the commencement of this, is j^(,^ gf i878. not to be affected (sect. 1 7) . In place of sect. S of the Act of 1878 it proposes that — "Every bill of sale shall be duly attested, and shall be registered imder BiU of sale to the principal act within seven clear days after the execution thereof, or if ^^ '^oi'^ unless it is executed in any place out of England then witliin seven clear daj-s ' ^.. , . ■, after the time at which it would in the ordinary course of post arrive in England if posted immediately after the execution thereof ; and shall truly set forth the consideration for which it was given ; otherwise such bin of sale shall be void in respect of the personal chattels comprised therein" (sect. 8). (m) matonv. Cnitficell, 1 E. & B. 15 ; 22 L. J., Q. B. 78; Zoinax v. Buxton, L. R., 6 C. P. 107 ; Ex parte Sheen, In re Winstanlcij, 1 Ch. D. 560 ; Ex parte King, 2 Ch. D. 256. [n) Ex parte Homan, L. E,., 12 Eq. 598 ; Ex parte Fisher, supra ; In re Jackson, Ex parte Eall, 4 Ch. D. 682. (o) Ex parte Fisher, supra ; Ex parte Burton, supra ; Ex parte Kilncr, supra. {p) Ex parte Burton, 13 Ch. D. 102. \q) Ex parte Fisher, L. E.., 7 Ch. 636 ; Ex parte Kiiner, 13 Ch. D. 245 ; Ex parte Bollind, In re Gibson, supra. 566 BILLS OF SALE. Ante, p. 560 (n. 1). Execution of bills of sale. Eill of sulo with power to seize except in certain events to be void. Void in respect of chattels not specified. After- acquired property. Exceptions. See ante, p. 548. Order and disposition. Ante, p. 5C3, Bill of salo void us This win render a biU of sale void for want of due attestation, registra- tion or tiaie statement of the consideration absolutely in respect of all goods comprised in it. — And the decisions of Davis v. Goodman, 5 C. P. D. 128 ; In re Knott, 7 Ch. D. 549, n. (1) ; and In re D'Epineul, 20 Ch. D. 217, will no longer apply. The bill further proj)oses that — ' ' A bill of sale shall be void unless the same is executed in the presence of a person who has authority to take oaths in the Supreme Court of Judicature in England, and, if the bill is executed in England, who is also a certificated solicitor, and unless such person shall carefully explain to the grantor the nature and effect of the bill of sale, and shall state in the attestation of the execution of the bill of sale that he has before the execution of the bill of sale made such explanation ; and further, if the bill is executed in England, that he was appointed by the grantor to be and is the solicitor of the grantor and not the solicitor of the grantee for this piu-pose ' ' (sect. 9) . That— ' ' Personal chattels assigned imder a bUl of sale shall not be liable to seizure by the grantee for any other than the following causes : — (I.) If the grantor shall make default in payment of the siim or sums of money thereby secured at the time therein pro\dded for pay- ment ; (2.) If the grantor shall become a bankrupt, or suffer the said goods or any of them to be distrained for rents, rates, or taxes ; (3.) If the grantor shall fraudulently remove or suffer the said goods, or any of them, to be removed from the premises ; (4.) If the gTantor shall not, without reasonable excuse, upon demand in writing by the grantee, deliver to him his last receipts for rent, rates, and taxes" (sect. 7). That a bill of sale shall be void in respect of any personal chattels not eniunerated in the schedule which is to be annexed to it (sect. 4) ; and that a bill of sale shall be void in respect of property after acquired, or of which the grantor was not true owner at the time of execution (sect. 5) ; except — ■ "(1) Any growing crops separately assigned or charged where sucb crops were actually growing at the time when the bill of salo was executed ; * ' (2) Any fixtures separately assigned or charged, and any plant, or trade machinery where such fixtures, plant or trade machinery arc used in, attached to or brought upon any land, fai'm, factory, workshop, shoji, house, warehouse or other place in substitution for any of the like fixtures, jilant or trade machinery enumerated in the schedule to such bill of sale ' ' (sect. 6) . The renewed application of the order and disposition doctrine of the bankruptcy law, Avliich had been expressly excepted in the Act of 1878 (sect. 20 to be repealed, see supra), is also proposed in sect. 13 of the bill, ' ' Where a person, within twelve months after ho has executed a bill BILLS OF SALE. 567 of sale, becomes subject to the provisions of the law for the time being in against _ force relating to bankruptcy or any similar proceeding, whether he is trustee in adjudged bankrupt or has his affairs liquidated by arrangement, or enters ^ into a composition or otherwise, such bQl of sale shall, as against the trustee or other person entitled to the estate of such person under the said law, be void in respect of any personal chattels which, at or after the commencement of the bankruptcy or liquidation, or other date, at or to which the proceedings under the said law are deemed to commence or to relate, are in the possession or apparent possession, or the order and dis- position of the person executing such bill of sale." And an analogous provision with respect to biUa of sale given by companies is contained in sect. 15 : — " "Where a company is wound up luider the Companies Act, 1862, and Bill of sale to the acts amending the same, any bill of sale given by such company be void as to within twelve months next preceding the commencement of the winding personal cnat- up shall, as against the liquidators of the company, be void in respect of ^oggg any personal chattels which, at or after the commencement of the winding up, are by the consent and permission of the true owner in the possession or apparent possession, or the order and disposition of the said company." The security afforded by a bill of sale is to be further diminished by a provision that — "A bill of sale to which this act applies shall be no protection in BiU of sale respect of personal chattels included in such bUl of sale which but for ^ot to protect such bill of sale would have been liable to distress under a warrant for ^ ^ . ® ,^ against poor the recovery of poor and other parochial rates. and parochial Further, a gi-antee of a bill of sale (whether registered before or after rates, the commencement of this act) who has seized goods imder it is not to be Grantee not allowed to remove them from the premises on which they were seized, or to remove sell them until the expiration of five clear days from such seizure. f°° ^ ~°^ ^® These provisions, together -with a provision for the local registration of seizure, the contents of bills of sale, and amended aiTangements for inspection of the register from the substance of the proposed act, and by them, if they become law, the security afforded by bills of sale will be seriously affected. AN COXTAIKIXO THE STATUTES IN FOECE EELATING TO BANKEES, BANK NOTES AND BANKING COMPANIES IN ENG- LAND, SCOTLAND AND lEELAND EESPECTIVELY. I. Relating to England, Scotland and Ireland. 17 GrEo. 3, c. 30. Ati Act for further restraining the Negotiation of Promissorg Notes and Inland Bills of Exchange, under a limited Sum, tvithin that Part of Great Britain called England. ... 574 39 & 40 Geo. 3, c. 28, s. 15. An Act for establishing an Agreement loith the Governor and Compang of the Bank of England for advancing the Sum of Three Millions toicards the Supplg for the Service of tlie Year 1800 578 48 Geo. 3, c. 88. An Act to restrain the Negotiation of Promissoi'y Notes and Inland Bills of Exchange, under a limited Sum, in Eng- land 579 55 Geo. 3, c. 184. An Act for repealing the Stamp Duties on Deeds, Law Proceed- ings and other icritten or printed Instruments, ^'c. , . 583 7 Geo. 4, o. 6. An Act to limit, and after a certain Period to prohibit, the issuing of Promissory Notes, under a limited Sum, in Eng- land 585 7 Geo. 4, c. 46. An Act for the better regidating Copartnerships of certain Bankers in England, and for amending so much of an Act of the 39th and 40th Years of the Reign of his late Majesty King Geo. 3, intituled "An Act for establishing an Agree- meyit with the Governor and Company of the Bank of Eng- land for advancing the Sum of Three Millions toicards the Supplg for the Service of the Year 1800," as relates to the same 588 570 APPENDIX OF STATUTES. 9 Geo. 4, c. 23. An Act to enable Banhers in Enc/land to issue certain unstamped Pi'omissory Notes and Bills of Exchange, vjjon 2}(ij/ment of a Composition in lien, of Stamp Duties thereon 600 9 Geo. 4, c. 65. A.n Act to restrain the Negotiation, in Eiigland, of Promissory Notes and Bills, tinder a limited Sum, issued in Scotland or Ireland 606 3 & 4 Will. 4, c. 83. An Act to compel Banks issuing Promissory Notes payahle to Bearer on Demand, to make Returns of their Notes in Cir- culation, and to authorize Banks to issue Notes payable in London for less than 501 607 3 & 4 Will. 4, c. 98. An Act for giring to the Corporation of the Governor and Com- jniny of the Bank of England certain Privileges, for a limited Period, under certain Conditions 609 1 & 2 YiOT. C. 96. An Act to amend, until the end of the next Session of Par- liamoit, the Law relative to Legal Proceedings by certain Joint Stock Banking Companies against their own Jlembers, and by such Members against the Compatiies 615 3 &4 Vict. c. 111. An Act to continue, until the 3\st day of August, 1842, and to extend the Provisions of an Act of the 1st and 2nd Years of her present Majesty, relating to Legal Proceedings by certain Joint Stock Banking Cotnpanies against their own Members, and by such Jlembers against the Companies 617 4 Vict. c. 14. An Act to make good certain Contracts zvhich have been or may be entered into by certain Banking and other Copartner- ships 618 7 & 8 Vict. c. 32. An Act to regidate the Issue of Bank Notes, and for giving to the Governor and Company of the Bank of England certain Privileges for a limited Period 619 8 & 9 Vict. c. 76. An Act to amend an Act of the last Session of Parliament for regulating the Issue of Bank Notes in Eng- land 633 16 & 17 Vict. c. 59. An Act to repeal certain Stamp Duties, and to grant others in lieu thereof; to amend the Laws relating to Stamp Duties ; and to make perpetual certain Stamp Duties in Ireland 635 CONTENTS. 671 17 & 18 YiCT. c. 83. An Act to amend the Laws relating to the Stamp Duties , . 635 19 YiCT. c. 20. An Act to eontitiue certain Compositions payable to Bankers ivho have ceased to issue Batik JVutes 630 19 & 20 Vict. c. 100. An Act respecting the Election of Directors of Joint Stock Banks 637 23 & 24 YiCT. c. 111. An Act for granting to her Majesty certain Duties on Stamps, and to amend the Laws relating to Stamp Duties .... 638 24 & 25 YicT. c. 91. An Act to amend the Laivs relating to the Ltiland Bevemie. 638 25 & 26 YiCT. c. 89. An Act for the Incorporation, Regulation and IVitiding-V]) of Trading Co7npanies and other Associations 639 27 & 28 YiCT. c. 32. An Act to enable certain Banking Copartnerships ivhich shall discontinue the issue of their own Bank Notes to sue and be sued by their Public Oj/icer 641 30 YiCT. c. 29. A71 Act to amend the Law in respect of the Sale and Purchase of Shares in Joint Stock Banking Coiytpanies 642 33 & 34 YicT. c. 97. An Act for granting certain Stamp Duties in lieu of Duties of the same kind now payable under various Acts and con- solidating and amending Provisions relating thereto . . 643 34 YicT. c. 17. An Act to make Provision for Bank Holidays, and respecting Obligations to make Payments, and do other Acts on such Baiik Holidays 652 34 & 35 YicT. c. 74. An Act to abolish Days of Grace in the case of Bills of Exchange and Promissory Notes payable at Sight or on Presenta- tion 654 39 & 40 YiCT. c. 81. An Act for amending the Law relating to Crossed Cheques 654 40 YiCT. c. 2. An Act to provide for the Preparation, Issue and Payment of Treasury Bills, and to make further Provision respecting Exchequer Bills 655 572 appendix of statutes. 40 & 41 Vict. c. 59. An Act to amend the Laio icith respect to the Transfer of Stock forming part of the Public Debt of any Colony, and the Stamp Duty on such Transfer 658 41 & 42 Vict. c. 31. An Act to consolidate and amend the Laiv for preventing Frauds iipon Creditors by secret Bills of Sale of Personal Chattels 660 42 Vict. c. 11. An Act to amend the Laio of Evidence with respect to Bankers* Books 668 42 & 43 Vict. c. 76. An Act to amend the Law with respect to the Liability of Members of Banking and other Joint Stock Companies^ and for other purposes 670 43 Vict. c. 11. A71 Act to make Powers of Attorney and Requests for Trans- mission of Dividend ITarrants by Post relating to India Five per Cent. Stock applicable to India Four per Cent. Stock 673 43 & 44 Vict. c. 20. An Act to grant and alter certain Duties of Inland Revenue, and to amend the Laws in relation to certain other Duties 674 II. Relating to Scotland exclusively. 5 Geo. 3, c. 49. An Act to prevent the Inconveniences arising from the present Method of issuing Notes and Bills by the Banks, Banking Comjmnies and Bankers in that Part of Great Britain called Scotland 674 7 Geo. 4, c. 67. Ati Act to regtdate the Mode in zvhich certain Societies or Copartnerships for Banking ifi Scotland may sue and be sued 675 8 & 9 Vict. c. 38. An Act to regulate the issue of Bank Notes in Scotland , . 682 CONTENTS. 673 IG «& 17 Vict. c. 63, s. 7. An Act to repeal certain Stamp Duties and to grant others in lieu thereof, to give Relief with respect to the Stamp Duties on Newspapers and Supplements thereto, to repeal the Laiv on Advertisements, and otherwise to amend the Laws re- lating to Stamp Duties 693 17 & 18 Vict. c. 73. An Act to amend the Acts for the Regulation of Joint Stock Banks in Scotland 694 19 Vict. c. 3. An Act to extend the Period for which her Majesty may grant Letters Patent of Jncorporation to Joint Stock Banks in Scotland existitig before the Act of 1846 695 III. Relating to Ireland exclusively. 55 Geo. 3, c. 100. An Act to provide for the Collection and Management of Stamp Duties jiayahle on Bills of Exchange, Promissory Notes, Receipts and Game Certificates, in Ireland 696 1 & 2 Geo. 4, c. 72. A71 Act to establish an Agreement %vith the Governor and Com- pany of the Bank of Ireland for advancing the Sum of 500,000^. Irish Currency, and to empower the said Governor and Company to enlarge the Capital Stock or Fund of the said Bank to Three Millions 697 6 Geo. 4, c. 42. Ail Act for the letter Regulation of Copartnerships of certain Bankers in Ireland 698 9 Geo. 4, c. 80. An Act to enable Bankers in Ireland to issue certain unstamped Promissory Notes, upon Payment of a Composition in lieu of the Stamp Duties thereon 710 9 Geo. 4, c. 81. An Act for making Promissory Notes payable, issued by Banks, Banking Companies or Bankers in Ireland, at the Places xohere they are issued 716 574 ArPENDIX OF STATUTES. 11 Geo. 4 & 1 Will. 4, c. 32. An Act to explain two Acts of his present Majesty for estahlish- imj an Agreement ivith the Governor and Company of the Bank of Ireland, for advancincj 500,000^. Irish Currency, and for the better Regulation of Copartnerships of certain Bankers in Ireland 717 5 & 6 Vict. c. 82. An Act to assimilate the Stamp Duties in Great Britain and Ireland, and to make Regulations for collecting and managing the same, until the 10th day of October, 1845 725 8 & 9 YicT. c. 37. A71 Act to regulate the issue of Bank Notes in Ireland, and to regulate the Repayment of certain Sums advanced by the Governor and Company of the Bank of Ireland for the Public Service ". , 726 16 & 17 Vict. c. 59, s. 20. An Act . . . to make pcrpetxial certain Stamp Duties in Ireland 740 27 & 28 Vict. c. 86. An Act to permit, for a limited Period, Compositions for Stamp Duty on Bank Post Bills of 51. and upioards, in Ireland 741 30 & 31 Vict. c. 89. An Act to render perpetual an Act passed in the Session holden in the 21th and 28th Years of her jyresent Majesty, intituled "An Act to permit, for a limited Period, Compositions for Stamp Duty on Bank Post Bills of 51. and ujncards in Ireland^'' " 742 I. Eelating to England, Scotland and Ireland. Restraining the Negotiation of Bills and Notes under a Limited Sum. 17 Geo. 3, c. 30. An Act for further restraining the N'egotiaiion of Promissory Notes and Inland Bills of Exchange, under a limited Sum, tvithin that part of Great Britain called England. Preamble. AViiEREAs by a certain act of parliament, passed in the 15tlx Act lo Geo. 3 year of the reign of his present Majesty (intituled "An Act recited. to restrain the negotiation of promissory notes and inland bills of exchange, under a limited sum, within that part of Groat 17 Geo. 3, c. 30. 575 Britain called England"), all negotiable promissory or other notes, bills of exchange, or drafts, or uudertakiugs in waiting, for any sum of money less tban the sum of 20s. in the whole, and issued after the 24th day of June, 1775, were made void, and the publishing or uttering and negotiating of any such notes, bills, di-afts, or undertakings, for a less sum than 205., or on which less than that sum should be due, was, by the said act, restrained under certain penalties or forfeitures therein mentioned ; and all such notes, bills of exchange, drafts, or undertakings in writing, as had issued before the said 24th day of June, were made paj-able upon demand, and were directed to be recovered in such manner as is therein also mentioned : and whereas the said act hath been attended with very salutary effects, and in case the provisions therein contained were extended to a further sum (but yet without j)rejudice to the convenience arising to the public from the negotiation of promissory notes and inland bills of exchange for the remittance of money in discharge of any balance of account or other debt), the good purposes of the said act woidd be fiu'ther advanced; be it therefore enacted, &c., that ^Ul negotiable all promissory or other notes, bills of exchange, or drafts, or promissory undertakings in writing, being negotiable or transferable, for ^? ' V^: the payment of 205., or any sum of money above that sum thaiio^ -whToh and less than 5^. ; or on which 20s., or above that sum and shall be issued less than 5/., shall remain undischarged, and which shall be in England issued, within that part of Great Britain called England, at ^ll^y ''^i'-^- ^» any time after the 1st day of January, 1778, shall specif}^ the sip^jf^ +v, names and places of abode of the persons respectively to names &c. of whom, or to whose order, the same shall be made payable ; the persona and shall bear date before or at the time of drawing or to whom issuing thereof, and not on any day subsequent thereto ; and P^y^ol^. shall be made payable within the space of 21 days next after the day of the date thereof ; and shall not be transfer- able or negotiable after the time thereby Hmited for payment thereof ; and that every indorsement to be made thereon shall be made before the expiration of that time, and to bear date at or not before the time of making thereof ; and shall specify the name and place of abode of the person or persons to whom, or to whose order, the money contained in every such note, bill, draft, or undertaking, is to be paid; and that the The signing signing of every such note, bill, di'aft, or undertaking, and of every such also of every such indorsement, shall be attested by one ^°**^ '^^^ l^' • cioi'SGmGiiL to subscribing witness at the least ; and which said notes, bills y^^ attested by of exchange, or di-afts, or undertakings in writing, may be one witness, made or drawn in words to the purport or etfect as set out in the schedule hereunto annexed, Kos. I. and II. : and that all promissory or other notes, bills of exchange, or drafts, or undertakings in writing, being negotiable or transferable, for 576 APPENDIX OF STATUTES. Penalty on publishing or negotiating any such notes, &c. contrary to the method prescribed by this act. All negotiable promissory notes, &c. between 20.9. and ol. which shall be issued before Jan. 1, 1778, shall be payable on demand. the payment of 20s., or any suna of money above that sum and less than 51. ; or on which 20s., or above that sum and less than 51., shall remain undischarged, and which shall be issued within that part of Great Britain called England at any time after the said 1st day of January, 1778, in any other manner than as aforesaid ; and also every indorsement on any such note, bill, draft, or undertaking, to be negotiated under this act other than as aforesaid shall and the same are hereby declared to be absolutely void ; any law, statute, usage, or custom to the contrary thereof in anywise notwithstanding. 2. That the publishing, uttering, or negotiating, within that part of Great Britain called England, of any promissory or other note, bill of exchange, draft, or undertaking in writing, being negotiable or transferable, for 20s., or above that sum and less than 51., or on which 20s., or above that sum and less than 51., shall remain undischarged, and issued or made in any other manner than notes, bills, drafts, or undertakings, hereby permitted to be published or negotiated as aforesaid ; and also the negotiating of any such last-men- tioned notes, bills, drafts, or undertakings, after the time appointed for payment thereof, or before that time in any other manner than as aforesaid, by any act, contrivance, or means whatsoever, from and after the said 1st day of January, 1778, shall be, and the same is hereby declared to be, pro- hibited or restrained, under the like penalties or forfeitures, and to be recovered and applied in like manner as by the said act is directed, with respect to the uttering or publishing or negotiating of notes, bills of exchange, drafts, or imdertakings in writing, for any sum of money not less than the simi of 20s., or on which less than that sum shoidd be due. 3. Tliat, from and immediately after the passing of this act, all promissory or other notes, bills of exchange, drafts, or undertakings in writing, for the payment of any greater sum of money than 20s., and less than the sum of 51., or on which 20s. and less than the sum of 51., shall remain imdischarged, and being negotiable or transferable, as shall be issued before the said 1st day of January, 1778, shall be, and the same ai'o hereby declared and adjudged payable, within that part of Great Britain called England, on demand, any terms, restric- tions, or conditions therein contained to tlio contrary thereof notwithstanding ; and shall be recoverable in such manner, or by the like means, as is or are directed in or by the said act with respect to notes, bills of exchange, or drafts, or under- takings in writing therein mentioned to have issued previous to the said 24tli day of June, 1775; and tliat all and every other the powers, provisoes, limitations, restrictions, penalties, clauses, matters and things whatsoever in tlie said former act contained with respect thereto, and also with respect to all 17 Geo. 3, c. 30. 577 sucli notes, bills of exeliange, drafts, or undertakings in writing-, issued after the said 24tli day of June, 1775, shall be, and the same are hereby declared to be in force, within that part of Great Britain called England, as to all notes, bills of exchange, or drafts, or undertakings in writing, for 20s., or any greater sum and less than the sum of -5/., or on which 20s., or above that sum and less than 5/., shaU remain undischarged, issued after the said 1st day of January, 1778, and previous thereto respectively, and in like manner as if the same respectively had been the object of the said act at the time of making thereof, save so far as the same or any of them are altered or varied b}' this present act. 4. Tliat the said former, and also this present act, shall Continuanpe continue in force, not only for the residue of the term of five of this act 3'ears in the said former act mentioned, and from thence to Joj-Q^g/act (o). the end of the then next session of parliament, but also for the fiu'ther term of five years, and from thence to the end of the then next session of parliament («). SCHEDULE. No. I. [Place] Idciij'] [month'] [i/ear] Twenty-one days after date, I promise to pay to A. B. of _ [jDlace] or his order, the sum of for value received by Witness, E. F. C. D. And the indorsement, toties quoties. [Day] [month] [,'/f«^] Pay the contents to G-. H. of [place^ or his order. Witness, J. K. A. B. No. II. [Place] [day] [month] [year] Twenty-one days after date, pay to A B. of [])lace] or his order, the sum of value received, as advised by To E. F. of [place:] . C. D. Witness, G. H. And the indorsement, toties quoties. [Day] [month] [year] Pay the contents to J. K. of [place'] or his order. Witness, L. M. A. B. (a) These acts were afterwards made pei-petual by 27 Geo. 3, c. IG. The recited act of 15 Geo. 3, c. 51, was, however, repealed by 48 Geo. 3, c. 88, s. 1. But by 26 & 27 Vict. c. 105, the 17 Geo. 3, c. 30, was^tem- porarily repealed, and the repeal is continued by 36 k 37 Vict. c. 75, to the 2Sth July, 1874. By 17 & IS Vict. c. 83, s. 9, these acts are not to extend to cheques. G. Pr 578 APPENDIX OF STATUTES. No other bank shall be erected by parliameut during the coutiuuance • of the said privilege, nor shall any niunber of bankers in partnership exceeding six be allowed. Conditions of redemption. Ban]; of England Restriction Act. 39 & 40 Geo. 3, c. 28, s. 15. An Act for establishinff an Agreement wilh the Governor and Company of the Bank of England for advancing the Sum of Three Millions towards the Sajij^ly for the Service of the Year 1800 {a). [28tli March, 1800.] 15. And to prevent any doubts that may arise concerning the privilege or power given, by former acts of parliament, to the said governor and company, of exclusive banking, and also in regard to the erecting any other bank or banks by parliament, or restraining other persons from banking during the continuance of the said privilege, granted to the Governor and Company of the Bank of England as before recited, it is hereby further enacted and declared, that it is the true intent and meaning of this act, that no other bank shall be erected, estabhshed or allowed by parliament ; and that it shall not be lawful for any body, politic or corporate, whatsoever, erected or to be erected, or for any other persons, united or to bo united in covenants, or partnership, exceeding the number of six persons in that part of Great Britain called England, to borrow, owe, or take up any sum or sums of money on their bills or notes, payable on demand, or at any less time than six months from the borrowing thereof, during the continu- ance of the said privilege to the said governor and company ; who are hereby declared to be and remain a corporation, with the privilege of exclusive banking, as before recited, subject to redemption on the terms and conditions before mentioned ; that is to say, on one year's notice to be given after the 1st day of August, 1833, and repayment of the said sum of 3,200,000/., and all arrears of the said 100,000/. per anmun ; and also upon repayment of the said sum of 8,486,800/., and the interest or annuities payable thereon or in respect thereof, and all the principal and interest money that shall be owing on all such tallies, excheciuer orders, exchequer bills, parlia- mentary funds, or other government securities, which the said governor and company, or their successors, shall have remain- ing in their hands, or be entitled to, at the time of such notice to be given as aforesaid, and not otherwise, anything in this act or any former act or acts of parliament to the con- trary in anywise notwithstanding. («) By 34 & 3o Vict. c. IIG, the Statute Law Reviwon Act, 1871, the ■whole of this act, " except from the said Governor and Company of the Bank of I'^ngland and their tucccssors for ever," in sect. 13 to the end of the act, is rcp,< aled. Tlic above section (15) is therefore still in force. 48 aEO. 3, c. 88. 579 Hcsf raining Negotiation of Bills and Notes under a limited Sum. 48 Geo. 3, c. 88. An Act to restrain the Negotiation of Promissory Notes and Inland Bills of Exchange, tinder a limited Sam, in England (a). [23rd June, 1808.] 2. And be it furtlior enacted, that all promissory or otlier Promissory notes, bills of exchange or drafts, or undertakings in Avritiug, ^j^^^^^.^^J ^*^®^ being negotiable or transferable for the payment of any sum ^^^^ " *" or sums of money, or any orders, notes or undertakings in writing, being negotiable or transferable for the delivery of any goods, specifying their value in money, less than the sum of 20s. in the whole, heretofore made or issued, or which shall hereafter be made or issued, shall from and after the first day of October, 1808, be and the same are hereby declared to be absolutely void and of no effect. 3. That if any person or persons shall after the 1st day of Persons utter- July, 1808, by any art, device, or means whatsoever, publish ™°bmg^fOT°^^^ or utter any such notes, bills, drafts, or engagements as afore- less thaii°20s., said, for a "less sum than 205., or on which less than thesum &c. shaU of 20s. shall be due, and which shall be in anywise negotiable forfeit not or transferable, or shall negotiate or transfer the same, every exceeding 201. such person shall forfeit and pay, for every such offence, any ^^IJ^^l sum not exceeding 20^., nor less than 5^., at the discretion of the justice of the peace who shall hear and determine such offence. 4. That it shall be lawful for any justice or justices of the Justices em- peace, acting for the county, riding, city or place within which powered to any offence against this act shall be committed, to hear and ^^^^^^.^5^6 determine the same in a summary way, at any time within offences, twenty days after such offence shall have been committed ; and such justice or justices, upon any information exhibited or complaint made upon oath in that behalf, shall summon the party accused, and also the witnesses on either side, and shall examine into the matter of fact, and upon due proof made thereof, either by the voluntary confession of the party or by the oath of one or more credible witness or witnesses, or other- wise (which oath such justice or justices is or are hereby authorized to administer) shall convict the offender, and adjudge the penalty for such offence. (r/) By the Statute Law Revision Act, 1872 (No. 2) (35 & 3G Vict. c. 97), sects. 1 and 11 arc repealed. By 2G & 27 Viet. c. 10.5, continued by 3G & 37 Vict. c. 75, the act is repealed viutil 28th Ju'v, 1874. By 17 & 18 Vict. c. 83. s. 9, the act is not to extend to drafts on hankers. p p 2 580 APPENDIX OF STATUTES. Penalty on witnesses not attendina". Form of con \-iction. 5. That if any person shall be summoned as a witness to o-ive evidence before such justice or justices, either on the part of the prosecutor or the person accused, and shall neglect or refuse to appear at the time or place to be for that purpose appointed without a reasonable excuse for such his neglect or refusal, to be allowed by such justice or justices, then such person shall forfeit for every such offence the sum of 40*., to be levied and paid in such manner and by such means as are directed for recovery of other penalties under this act. 6. That the justice or justices, before whom any offender shall be convicted as aforesaid, shall cause the said conviction to be made out, in the manner and form following ; (that is to " Be it remembered, that on the day of m the year of our Lord A. B. having appeared before me l_or, us] one [or more] of his Majesty's justices of the peace [as the case may be] for the county, riding, city or place \_as the case may be'] and due proof having been made upon oath by one or more credible witness or witnesses, or by confession of the party [fis the case may be] is convicted of \_specifying the offence]. Given under my hand and seal [or, our hands and seals] the day and year aforesaid." Convictions to "Which conviction the said justice or justices shall cause to be be returned to returned to the then next general quarter sessions of the peace the quarter q£ ^q county, riding, city or place where such conviction was sessions. n>ade, to be filed by the clerk of the peace, to remain and be kept among the records of such county, riding, city or j^lace. 7. Provided always, that it shall be lawful for any clerk of the peace for any count}', riding, city or place, and he is here- by required, upon application made to him by any person or persons for that purpose, to cause a copy or cojiies of any conviction or convictions filed by him under the directions of this act, to be forthwith delivered to such person or persons upon payment of Is. for every such coj)y. IIow penalties 8. That the pecuniary penalties and forfeitures hereby shall be levied incurred and made payable upon any conviction against this and applied, ^ct shall be forthwith paid by the person convicted, as follows ; one moiety of the forfeiture to the informer, and the other moiety to the poor of the parish or place where the offence shall be committed : and in case such person shall refuse or neglect to pay the same, or to give sufficient security to the satisfaction of such justice or justices to prosecute any appeal against such conviction, such justice or justices shall by warrant under his or their hand and seal or liands and seals, cause the same to l)e levied by distress and sale of the ort'ender's goods and chattels, together with all costs and charges attending such distress and sale, returning the overplus (if any) to the owner ; and which said warrant of distress the said justice or Oerks of the peace to give copies of con- victions on payment of Is. 48 Geo. 3, c. 88. 581 justices shall cause to be made out in the manner and form following ; (that is to say, ) " To the constable, headborough, or tythingman of . Form of tho " Whereas A. B. of in the county of is this day J^™* °* convicted before me [or, us] one [or more] of his Majesty's justices of the peace [_as the case mat/ be'] for the county of [or, for the riding of the county of York], or for the town, liberty, or district of [«s the case mat/ be^ upon the oath of or a credible witness or witnesses \_or, by confession of the party, as the case mat/ be] for that the said A. B. hath [Acre set forth the ajfence] contrary to the statute in that case made and provided by reason whereof the said A. B. hath forfeited the sum of to be distributed as herein is mentioned, which he hath refused to pay : these are therefore, in his Majesty's name, to command you to levy the said sum of by distress of the goods and chattels of him the said A. B., and if within the space of five days next after such distress by you taken, the said sum. together with the reason- able charges of taking the same, shall not be paid, then that you do sell the said goods and chattels so by you distrained, and out of the money ai'ising by such sale, that you do pay one-half of the said sum of to of who infomied me [or, us, as the case shall be] of the said offence, and the other half of the said sum of to the overseer of the poor of the parish, township or place where the offence was com- mitted, to be employed for the benefit of such poor, returning the overplus (if any) upon demand, to the said A. B. the reasonable charges of taking, keeping, and selling the said distress being first deducted ; and if sufficient distress cannot be found of the goods and chattels of the said A. B. whereon to levy the said sum of that then you certify the same to me [or, us, as tJie case shall be] together with this warrant. Given under my hand and seal [or, our hands and seals] the day of in the year of our Lord ." 9. That it shall be lawful for such justice or justices to order Security may such offender to be detained in safe custody until return may ^e *^^^^_JJ^^°^ conveniently be had and made to such warrant of distress, ^PP^^^^^ unless the party so convicted shall give sufficient secm-ity, to the satisfaction of such justice or justices, for his appearance before the said justice or justices on such day as shall be appointed by the said justice or justices for the day of the return of the said warrant or distress (such day not exceeding five days from the taking of such security) ; which security the said justice or justices is and are hereby empowered to take by way of recognizance or otherwise. 10. That if upon such return no sufficient distress can be Offenders had, then and in such case the said justice or justices shall may be com- ' mitted for 582 APPENDIX OF STATUTES. •want of dis- tress. Convictions not to be re- moved. General issue may be l)leaded. and may commit such offender to the common gaol or house of correction of the county, riding, division or place where the offence shall be committed, for the space of three calendar months, unless the money forfeited shall be sooner paid, or unless or vmtil such off ender thinking him or herself aggrieved by such conviction, shall give notice to the informer that he or she intends to appeal to the justices of the peace at the next general quarter sessions of the peace to be holden for the county, riding or place wherein the offence shall be com- mitted, and shall enter into recognizance before some justice or justices, with two sufficient sureties conditioned to try such appeal, and to abide the order of and pay such costs as shall be awarded by the justices at such quarter sessions (which notice of appeal, being not less than eiglit days before the trial thereof, such person so aggrieved is hereby empowered to give); and the said justices at such sessions, upon due proof of such notice being given as aforesaid, and of the entering into such recognizance, shall hear and finally determine the causes and matters of such appeal in a summary way, and award such costs to the parties appealing or appealed against as they the said justices shall think proper; and the deter- mination of such c[uarter session shall be final, binding, and conclusive, to all intents and purposes. 12. Provided always, that no proceedings to bo had, touch- ing the conviction or convictions of any oft'ender or offenders against this act, shall be cjuashed for want of form, or be removed by writ of certiorari, or any otlier writ or process whatsoever, into any of his Majesty's Courts of Eecord at Westminster. 13. That if any action or suit shall be commenced against any person or persons for any thing done or acted in pur- suance of this act, then and in every such case such action or suit shall be commenced or prosecuted within three calendar months after the fact committed, and not afterwards ; and the same and every such action or suit shall be brought within the county wliere tlie fact was committed, and not elsewhere ; and the defendant or defendants in every such action or suit shall and may plead the general issue, and give this act and the S2:)ecial matter in evidence at any trial to be had thereupon, and tliat the same was done in piu-suance and by the autho- rity of this act ; and if the same shall appear to have been so done, or if any sucli action or suit shall bo brouglit after the time limited for l)ringing tlie same, or be brought or laid in any other place than as aforementioned, then the jury shall find for the defendant or defendants ; or if tlie plaintiff or plaintiff's shall become nonsuit, or discontinue his, her, or their action after the defendant or defendants shall havo appeared, or if upon demurrer judgment shall bo given 55 Geo. 3, c. 184. 683 against the plaintiff or plaintiffs, tlio defoudant or defendants shall and may recover treble costs (ordinary costs by 5 & 6 Vict. c. 97, s. 2). V J J Issue of Bank Notes on unsfain^ml Fapcv and Bankers^ Licences. 55 Geo. 3, c. 184. An Act for repealing the Stamp Duties o?i Deeds, Law Pro- ceedings, and other written or printed histruments, &;c. (a). [11th July, 1815.] 2. That there shall be raised, levied and paid unto and for Duties speci- tho use of his Majesty, his heirs and successors, in and through- ^ed in schc- out the whole of Groat Britain, for and in respect of the in- ing payment of such copartnership; and that such copartnership and every member thereof, and the capital stock and effects of such copartnership, and the effects of every member of such copartnership, shall in all cases, not- Qq2 59G APPENDIX OF STATUTES. w-lfhstanding the bankruptcy, insolvency, or stopping payment of any such, public officer, be attached and attachable, and bo in all respects liable to the lawful claims and demands of the creditor and creditors of such copartnership, or of any member or members thereof, as if no such bankruptcy, insolvency, or stopping payment of such public officer of such copartnership had happened or taken place. Execution 13. That execution upon any judgment in any action upon judg- obtained against any public officer for the time being of any mcut may be ^^^^^.j^ corporation or copartnership carrying on the business of imy member banking under the provisions of this act, whether as plaintiff of the copart- or defendant, may be issued against any member or members nership. for the time being of such corporation or copartnership ; and that in case any such execution against any member or members for the time being of any such corporation or co- partnership shall be ineffectual for obtaining payment and satisfaction of the amount of such judgment, it shall be lawful for the party or parties so having obtained judgment against such public officer for the time being, to issue execution against any person or persons who was or were a member or members of sucli corporation or copartnership at the time when the contract or contracts or engagement or engagements in which such judgment may have been obtained was or were entered into, or became a member at any time before such contracts or engagements were executed, or was a member at the time of the judgment obtained: provided always, that no such execution as last mentioned shall be issued without leave first granted, on motion in open court, by the court in which such judgment shall have been obtained, and when motion shall bo made on notice to the person or persons sought to be charged, nor after the expiration of three years next after any such person or persons shall have ceased to be a member or members of such corporation or copartnership. Officer, &c. in 14. Provided always, that every such public officer in whose such cases name any such suit or action shall have been commenced, lu emui cd. prosecuted, or defended, and every person or persons against wliom execution upon any judgment obtained or entered up as aforesaid in any such action shall be issued as aforesaid, shall always be reimbursed and fully indomuiiied for all loss, damages, costs, and charges, without deduction, which any such officer or person may liave incurred by reason of such execution, out of the funds of such copartnership, or in failure thereof, by contribution from the other members of such co- partnership, as in the ordinary cases of copartnership. Governor aiid 15. And to prevent an}^ doubts that might ariso whether the Company of g;a(i governor and company, under and by virtue of tlieir F ^,ri "li ' - charter, and the several acts of parliament which have been empower ' ' i^^^^c; and passed in relation to tlie aff'airs of the said governor 7 Geo. 4, c. 46. 597 and company, can lawfully carry on the trade or business of agents to banking, otherwise than under the immediate order, manage- carry on ment and direction of the court of directors of the said gover- ^-'^iitii^o busi- nor and company ; be it therefore enacted, that it shall and pf;ice^in^°^ maj' be lawfiil for the said governor and company to authorize Eimhmd. and empower an}' committee or committees, agent or agents, to carr}' on the trade and business of banking, for and on be- half of the said governor and company, at any place or places in that part of the united kingdom called England, and for that purpose to invest such committee or committees, agent or agents, with such powers of management and superintendence, and such authority to appoint cashiers and other officers and servants as may be necessarj' or convenient for carrying on such trade and business as aforesaid ; and for the same pur- pose to issue to such committee or committees, agent or agents, cashier or cashiers, or other officer or officers, servant or ser- vants, cash, bills of exchange, bank post bills, bank notes, jiromissory notes, and other securities for payment of money : provided alwa3-s, that all such acts of the said governor and company shall be done and exercised in such manner as may be aj)pointed b}' any bj'e-laws, constitutions, orders, rules, and directions, from time to time hereafter to be made by the general court of the said governor and company in that behalf, such bye-laws not being repugnant to the laws of that part of the united kingdom called England : and in all cases where such bye-laws, constitutions, orders, rules, or directions of the said general court shall be wanting, in such manner as the governor, deputy-governor, and directors, or the major part of them assembled, whereof the said governor or deputy-governor is always to be one, shall or may direct, such directions not being repugnant to the laws of that part of the united kingdom called England ; anything in the said charter or acts of parlia- ment, or other law, usage, matter, or thing to the contrary thereof notwithstanding : provided always, that in an}' place "where the trade and business of banking shall be carried on for and on behalf of the said governor and company of the Bank of England, any promissory note issued on their account in such place shall be made payable in coin in such place as well as in London. 16. That if any cori:)oration or copartnership carrying on the Copartner- trade or business of bankers under the authority of this act ?^^P^ ™^y shall be desirous of issuing and re-issuing notes in the nature g^an^pe(j" of bank notes, payable to the bearer on demand, without the notes, on same being stamped as by law is required, it shall be lawful ghing bond. for them so to do on giving security by bond to his Majesty, his heirs and successors, in which bond two of the directors, members, or partners of such corporation or copartnership, shall be the obligors, together with the cashier or cashiers, or 598 APPENDIX OF STATUTES. accountant or accountants employed by sucli corporation or co- partnership, as tlio said commissioners of stamps shall require ; and such bonds shall be taken in such reasonable sums as the duties may amount unto during the period of one year, with condition to deliver to the said commissioners of stamps, with- in 14 days after the 5th day of January, the 5th day of April, the 5th day of July, and the 10th day of October, in every 3' ear, whilst the present stamp duties shall remain in force, a just and true account, verified upon the oaths or affirmations of two directors, members, or partners of such corporation or copartnership), and of the said cashier or cashiers, accountant or accountants, or such of them as the said commissioners of stamps shall require, such oaths or affirmations to be taken before any justice of the peace, and which oaths and affirma- tions any justice of the peace is hereby authorized and em- j)owored to administer, of the amount or value of all their promissory notes in circulation on some given day in every week, for the space of one quarter of a year prior to the quarter day immediately preceding the delivery of such account, together with the average amount or value thereof according to such account ; and also to pay or cause to be paid into the hands of the receivers general of stamp duties in Great Britain, as a composition for the duties which would otherwise have been payable for such promissory notes issued within the space of one year, the sum of 7s. for every 100/., and also for the fractional part of 100/. of the said average amount or value of such notes in circulation, according to the true intent and meaning of this act ; and on due performance thereof such bond shall ])e void ; and it shall be lawful for the said commissioners to fix the time or times of making such payment, and to specify the same in the condition to every such bond ; and every such bond may be required to bo re- newed from time to time, at the discretion of the said commis- sioners or the major part of them, and as often as the same shall bo forfeited, or the i^arty or parties to the same, or any of them, shall die, become bankrupt or insolvent, or reside in parts beyond the seas. No corpo- 17. Provided always, that no such cori-)oration or copartner- ration com- ship shall be obliged to take out more than four licences for m^f ^r,t^ ii *^^^ issuing of any promissory notes for money payable to the out more than i '^ -, in t i ^ ,i k ^ "^ , . ■,■, „ four liceuccM. ^^aror on demand, allowed by law to be re-issued in all for any number of towns or places in England ; and in case any such corporation or copartnership shall issue such promissor^^ notes as aforesaid, by themselves or their agents, at more than four different towns or places in England, then after. taking out three distinct licences for three of sucli towns or places, snch corporation or coparlnershij) shall be entitled to have all the rest of such towns or places included in a fourth licence. 7 CIeo. 4, c. 46. 599 18. That if any sucli corporation or copartnorsliip cxceocling Penalty on co- tli© number of six persons in England, sliall begin to issue partnership any bills or notes, or to borrow, owe or take up any money on neglecting to their bills or notes, without having caused such account or f^^^^ letums, return as aforesaid to bo made out and deliver in the manner and form directed by this act, or shall neglect or omit to cause such account or return to be renewed yearly and every year between the days or times hereinbefore appointed for that purpose, such corporation or copartnership so offending shall, for each and every week they shall so neglect to make such account and return, forfeit 500/.; and if any secretary or other Penalties for officer of such corporation or copartnership shall make out or making false sign such false account or return, or any account or return ^"^ ^^n^- which shall not truly set forth all the several particulars by this act rec[uired to be contained or inserted in such account or return, the corporation or copartnership to which such secretary or other officer so offending shall belong shall for every such offence forfeit the sum of 500/., and the said secre- tary or other officer so offending shall also for every such offence forfeit the sum of 100/. ; and if any such secretary or Raise oath other officer making out or signing any such account or return pei'jmy. as aforesaid, shall knowingly and wilfully make a false oath of or concerning any of the matters to be therein specified and set forth, every such secretary or other officer so offending and being thereof lawfully convicted, shall be subject and liable to such pains and penalties as by any law now in force per- sons convicted of wilful and corrupt perjury are subject and liable to. 19. That if any such corporation or copartnership exceeding Penalty on the number of six persons, so carrying on the trade or busi- copartnership noss of bankers as aforesaid, shall, either by any member of v/ti,^^^"\"?T or person belonging to any such corporation or copartnership, ^^^ demand • or by any agent or agents, or any other person or persons on behalf of any such corporation or copartnership, issue or re- issue in London, or at any place or places not exceeding the distance of 65 miles from London, any bill or note of such corporation or copartnership which shall be payable on de- mand ; or shall draw upon any partner or agent or other or drawing person or persons who may be resident in London, or at any ^"_ ^ °^ '^^'^ j)laee or places not exceeding the distance of Go miles from ai^i" on de- " London, any bill of exchange which shall bo payable on de- mand, or for mand, or which shall be for a less amount than fifty pounds ; less than 50/. ; or if any such corporation or copartnership ex;ceeding the or horrowino- number of six persons, so carrying on the trade or business of money on bankers in England as aforesaid, or any member, agent or ^^^H except agents of any such corporation or copartnership, shall borrow, "'^ \"i*^"i^ owe, or take up in London, or at any place or places not exceeding the distance of 65 miles from London, any sum or 600 A^rE^•Inx of statutes. Not to affect the rights of Bank of Ed gland, ex- cept as herein (specially altered. Penalties, how reco- Tcred. sums of money on any Lill or promissory note of any such corporation or coj)artnersliip payable on demand, or at any less time than six months from the borrowing thereof, or shall make or issue any bill or bills of exchange or promissory note or notes of such corporation or copartnership contrary to the jirovisions of the said recited act of the 39th and 40th years of King George the Third, save as pro\'ided by this act, such corporation or copartnership so offending or on whose account or behalf any such offence as aforesaid shall be committed, shall for every such offence forfeit the sum of 50/. 20. Provided also, that nothing in this act contained shall extend or be construed to extend to prejudice, alter, or affect any of the rights, powers, or privileges of the said Governor and Company of the Bank of England ; except as the said exclusive privilege of the said governor and company is by this act specially altered and varied. 21. I'hat all j^ccuniary penalties and forfeitures imposed by this act shall and may be sued for and recovered iii his Majesty^ s Court of Exchequer at Westminster, in the saine manner as 2)e7ialties inctirred wider any act or acts relating to stamp duties may be sued for and recovered in such court. (Repealed by 36 & 37 Yict. c. 91.) Certain bankers may issue un- btumped pro- Bank Notes and Bills Composition Stamp Dalies. 9 Geo. 4, c. 23. An Act to enable Bankers in England to issue certain unstamped Promissory Notes and Bills of Exchange, upon Payment of a Comjwsition in lieu of the !Stamp Duties thereon {a). [19th June, 1828. J "WiiEEEAs it is expedient to permit all persons carrying on the business of bankers in England (except within the city of London or within three miles thereof), to issue their pro- missory notes payable to bearer on demand, or to order within a limited period after sight, and to draw bills of exchange pa^-ablc to order on demand, or within a limited period after sight or date, on unstamped paper, upon payment of a com- position in lieu of the stamp duties which Avould otherwise be payable upon such notes and bills respectively, and subject to the regulations hereinafter mentioned ; be it therefore enacted, &c., tliat from and after the 1st day of July, 1828, it shall be laA\'ful for any person or persons carrying on the ('/) By the Statute Law Revision Act, 1873 (36 & 37 Vict. c. 91), sects. 16 and 17 are repealed. 9 Geo. 4, c. 23. 601 business of a banker or bankers in England (except witbin missory notes the city of London, or within three miles thereof), having first and bills of duly obtained a licence for that jnirpose, and given security exchange, by bond in manner hereinafter mentioned, to issue, on iin- ^"J,^!^^; °„ stamped paper, promissory notes tor any sum of money herein men - amounting to ol. or upwards, expressed to be payable to the tioned. bearer on demand, or to order, at any period not exceeding seven daj's after sight ; and also to draw and issue, on un- stamped paper, bills of exchange, expressed to be payable to order on demand, or at any period not exceeding seven days after sight, or twenty-one days after the date thereof; pro- vided such bills of exchange be drawn upon a person or per- sons carrying on the business of a banker or bankers in London, Westminster, or the borough of Southwark, or pro- vided such bills of exchange be drawn by any banker or bankers, at a town or place where he or they shall bo duly licensed to issue unstamped notes and bills under the autho- rity of this act, upon himself or themselves, or his or their co-partner or co-partners, payable at any other town or place where such banker or bankers shall also be duly licensed to issue such notes and bills as aforesaid. 2. That it . shall be lawful for any two or more of the com- Commis- missioners of stamps to grant to all persons carrying on the missioners of business of bankers in England (except as aforesaid), who tra^tH^n^ces shall require the same, licences authorizing such persons to ^q 'jgg^g ^^. issue such promissory notes, and to draw and issue such bills stamped notes of exchange as aforesaid, on unstamped paper ; which said and bills, licences shall be and are hereby respectively charged with a stamp duty of 30^. for every such licence. 3. That a separate licence shall be taken out in respect of A separate every town or place where any such unstamped promissory licence to be notes or bills of exchange as aforesaid shall be issued or *^^^° ^^'^ drawn : provided always, that no person or persons shall be ^^h^g^suoh obliged to take out more than four licences in all for any notes or bills number of towns or places in England ; and in case any sball bo person or persons shall issue or draw such unstamped notes iss^^ed, but or bills as aforesaid, at more than four different towns or fo^^^^^^^f^Je^^^ places, then, after taking out three distinct licences for three for any num- of such towns or places, such person or persons shall be ber of "such entitled to have all the rest of such towns or places included places. in a fourth licence. 4. That every licence granted under the authority of this Regulations act shall specify all the particulars required by law to be respecting specified in licences to be taken out by persons issuing pro- 1^®^*^^^- missory notes payable to bearer on demand, and allowed to be re-issued ; and every such licence which shall be granted between the lOtli day of October and the 11th day of Novem- ber in any year shall be dated on the 11th day of October, 602 APPENDIX OF STATUTES. Commis- sioners may cancel licences already taken out, and grant licences under this act in lieu thei'eof. Bankers while licensed imdcr this act shall not issue, for the first time, notes on stamped paper. Bankers licensed to issue im- stamped notes or bills shall give security by bond, for the due per- fonnance of the conditions herein con- tained. and every sucTi licence wliicli shall be granted at any other time shall bo dated on the day on which the same shall be granted ; and every such licence shall (notwithstanding any alteration which may take place in any copartnership of per- sons to whom the same shall be granted) have effect and continue in force from the day of the date thereof until the 10th day of October then next following, both inclusive, and no longer. 5. Provided always, that where any banker or bankers shall have obtained the licence required by law for issuing promissory notes payable to bearer on demand, at any town or place in England, and during the continuance of such licence shall be desirous of taking out a licence to issue at the same town or place unstamped promissory notes and bills of exchange under the provisions of this act, it shall be lawful for the commissioners of stamps to cancel and allow as spoiled the stamp upon the said first-mentioned licence, and in lieu thereof to grant to such banker or bankers a licence under the authority of this act : and every such last-mentioned licence shall also authorize the issuing and re-issuing of all promis- sory notes payable to the bearer on demand, which such banker or bankers may by law continue to issue or re-issue at the same town or place, on paper duly stamped. 6. Provided always, that if any banker or bankers, who shall take out a licence under the authority of this act, shall issue, under the authority either of this or any other act, any unstamped promissory notes for payment of money to the bearer on demand, such banker or bankers shall, so long as ho or they shall continue licensed as aforesaid, make and issue on unstamped paper all his or their promissory notes for payment of money to the bearer on demand, of whatever amount such notes may be ; and it shall not bo lawful for such banker or bankers, diiring the period aforesaid, to issue for the first time any such promissory note as aforesaid on stamped paper. 7. That before any licence shall bo granted to any person or persons to issue or draw any unstamped promissory notes or bills of exchange under the auth(n-ity of this act, such per- son or persons shall give security, by bond, to his Majesty, his heirs and successors, with a condition, that if such person or persons do and shall from time to time enter or cause to bo entered in a book or books to bo kept for that purpose, an account of all such unstamped promissory notes and bills of exchange as he or they shall so as aforesaid issue or draw, specifying the amount or value thereof respectively, and the several dates of the issuing thereof ; and in like manner also, a similar account of all such promissory notes as having been issued as aforesaid, shall havo been cancelled, and the dates 9 Geo. 4, c. 23. 603 of the cancelling thereof, and of all such bills of exchange as, having been drawn or issued as aforesaid, shall have been paid, and the dates of the payment thereof ; and do and shall from time to time, when thereunto requested, produce and show such accounts to, and permit the same to be examined and inspected by, the said commissioners of stamps, or any officer of stamps appointed under the hands and seals of the said commissioners for that purpose ; and also do and shall deliver to the said commissioners of stamps half-yearly, (that is to say,) within fourteen daj's after the 1st day of January and the 1st day of July in every year, a just and true account in writing, verified upon the oaths or affirmations, (which any justice of the peace is hereby empowered to administer,) to the best of the knowledge and belief of such 2;)erson or per- sons, and of his or their cashier, accountant, or chief clerk («), or of such of them as the said commissioners shall require, of the amount or value of all imstamped promissory notes and bills of exchange, issued under the provisions of this or any former act, in circulation vv'ithin the meaning of this act on a given day, (that is to say,) on tSaturdaj' in every week, for the space of half a year prior to the half-yearly day immedi- ately preceding the delivery of such account, together with the average amount or value of such notes and bills so in cir- culation, according to such accoimt ; and also do and shall pay or cause to bo paid to the receiver-general of stamp duties in Grreat Britain, or to some other person duly authorized by the commissioners of stamps to receive the same, as a composition for the duties which would otherwise have been payable for such promissory notes and bills of exchange issued or in cir- culation during such half-year, the sum of three shillings and sixpence for every one hundred pounds, and also for the frac- tional part of one hundred pounds, of the said average amount or value of such notes and bills in circulation, according to the true intent and meaning of this act ; and on due performance thereof such bond shall be void, but otherwise the same shall be and remain in full force and virtue. 8. That every unstamped promissory note payable to the For -nhafc bearer on demand, issued under the provisions of this act, period notes shall, for the purpose of payment of duty, be deemed to be in ?^°t^ ^|^ ^^'K circulation from the day of the issuing to the day of the can- ^^ circulation, celling thereof, both days inclusive, excepting nevertheless the period during which such note shall be in the hands of the banker or bankers who first issued the same, or by whom the same shall be expressed to be paj-able ; and that every unstamped promissory note payable to order, and every un- [a] The manager of tlio bank mav make the affidavdt. Hy. v. Green - land, L. R., 1 C. C. Go ; 36 L. J., M. C. 37. 604 APPENDIX OF STATUTES. Regulations respecting the bonds to bo given pur- suant to this act. Fresh bonds to be given on alterations of copartner- ships. stamped bill of exchange so as aforesaid issued, shall, for the purpose aforesaid, be deemed to be iu circulation from the day of the issuing to the day of the payment thereof, both days inclusive : provided always, that every such promissory note payable to order, and bill of exchange as aforesaid, which shall be paid in less than seven days from the issuing thereof, shall, for the purpose aforesaid, be included in the account of notes and bills in circulation on the Saturday next after the day of the issuing thereof as if the same were then actually in circulation. 9. That in every bond to be given pursuant to the directions of this act the person or persons intending to issue or draw any such unstamped promissory notes and bills of exchange as aforesaid, or such and so many of the said persons as the commissioners of stamps shall require, shall be the obligors ; and every such bond shall be taken in the sum of one hundred pounds, or in such larger sum as the said commissioners of stamps may judge to be the probable amount of the composi- tion or duties that will be payable from such person or persons, under or by virtue of this act, during the period of one year ; and it shall be lawful for the said commissioners to fix the time or times of payment of the said composition or duties, and to specify the same in the condition to every such bond ; and every such bond may be required to be renewed from time to time, at the discretion of the said commissioners, and as often as the same shall be forfeited, or the parties to the same, or any of them, shall die, become bankrupt or insolvent, or reside in parts beyond the seas. 10. That if any alteration shall be made in any copartner- ship of persons who shall have given any such security by bond as by this act is directed, whether such alteration shall be caused by the death or retirement of one or more of the partners of "the firm, or by the accession of any additional or new partner or partners, a fresh bond shall bo given by the remaining partner or partners, or the persons composing the new copartnership, as the case may be, which bond shall bo taken as a security for the duties which may be due and owing, or may become duo and owing, in respect of the unstamped notes and bills which shall have been issued by the person?, composing the old copartnership, and which shall be in cir- culation at the time of such alteration, as well as for duties which shall or may be or become due or owing in respect of the unstamped notes and bills issued or_ to be issued by the persons composing the new copartnership ; provided that no such fresh bond shall be rendered necessary by any such alteration as aforesaid in any copartnership of persons ex- ceeding six in number, but that the bonds to be given by such last-mentioned copartnerships shall be taken as securities for 9 Geo. 4, c. 23. 605 all the duties they may incur so long as they shall exist, or the i^ersons composing the same, or any of them, shall carry on business in copartnership together, or with any other person or persons, notwithstanding any alteration in such copartnership ; saving always the power of the said commis- sioners of stamp»s to require a new bond in any case where they shall deem it necessary for better securing the payment of the said duties. 11. That if any person or persons who shall have given Penalty on security, by bond, to his Majesty, in the manner hereinbefore tankers directed, shall refuse or neglect to renew such bond when for- ^^o^ecting to feited, and as often as the same is by this act required to be bonds, renewed, such person or persons so offending shall, for every such offence, forfeit and pay the sum of 100/. 12. That if any person or persons who shall be liceiised Penalty for under the provisions of this act shall draw or issue, or cause postdating to be drawn or issued, upon unstamped jiaper, any promis- u^j'tamped sory note payable to order, or any bill of exchange Aviiich shall bear date subsequent to the day on which it shall bo issued, the person or persons so offending shall, for every such note or bill so drawn or issued, forfeit the sum of 100/. 13. That nothing in this act contained shall extend, or be This act not construed to extend, to exempt or relieve from the forfeitures ^° exempt or penalties imposed by any act or acts now in force, upon Jerany per- persons issuing promissory notes or bills of exchange not duly sons issuing stamped as the law requires, any jijcrson or persons who, under unstamped any colour or pretence Avhatsoever, shall issue any unstamped "otes or bills j)romissory note or bill of exchange, unless such person or ^^o* ^'^''^''cord- persons shall be duly licensed to issue such note or bill under ^ith. the provisions of this act ; and such note or bill shall be drawn and issued in strict accordance with the regulations and re- strictions herein contained. 14. That all pecuniary forfeitures and penalties which may Recovery of be incurred under any of the provisions of this act shall be penalties, recovered for the use of liis Majesty, his heirs and successors, in his Majesty's Court of Exchecjuer at Westminster, by action of debt, bill, plaint or information, in the name of his Majesty's attorney or solicitor general in England. 15. Provided always, that nothing in this act contained shall ^ot to affect extend, or be construed to extend to prejudice, alter or aifect * 'l^"^^^^?.^^ any of the riglits, powers or privileges of the Grovernor and ^f Eno-land. Company of the Bank of England. 16. [Where any bankers taking out licences under this act shall have stamps in their possession which will become use- less, the commissioners may cancel such stamps, and make allowance for the same, if application be made within six calendar months next after the passing of the act.] 606 APPENDIX OF STATUTES. Restraining Negotiation of Notes under 51. 9 Geo. 4, c. 65. An Act to restrain the Negotiation, in England, of Promissori/ Notes and Bills under a limited Sum, issued in Scotland or Ireland. [lotli July, 1828.] Whereas an act was passed in the 7th year of his present 7 Geo. 4, c. G. Majesty's reign, intituled " An Act to limit, and after a certain period to prohibit, the issuing of promissory notes under a limited sum in Eugland;" and doubts may arise how far the provisions of the said act may be effectual to restrain the cir- culating in England of certain notes, drafts, or undertakings After 5th made or issued in Scotland or Ireland : be it therefore enacted, A^jril, 1829, ^^.^ that if any body politic or corporate, or person or per- no corpora- ^ gj^^^U ^^^^^, ^^^ ^^j^ j ^^ * .-, jg29, by any art, tiou or person ,.' ' ,, -^ iti,, "^ ,• , shall utter in tievice, or means whatsoever, publish, utter, negotiate, or England transfer, in any part of England, any promissory or other notes or bills note, draft, engagement, or undertahing in writing, made "T^T h' r pfiyable on demand to the bearer thereof, and being negotiable been made or ^^ transferable, for the payment of any sum of money less issued in than bl., or on which less than the sum of bl. shall remain Scotland or undischarged, which shall have been made or issued, or shall Ireland, purport to have been made or issued, in Scotland or Ireland, Ton/ "^^ '^^ or elsewhere out of England, wheresoever the same shall or may be payable, every such body politic or corjiorate, or person or persons, so publishing, uttering, negotiating, or transferring any such note, bill, draft, engagement, or undertaking, in any part of England, shall forfeit and pay for every such offence any sum not exceeding 2Ql. nor loss than bl., at the discretion of the justice of the peace who shall hear and determine such offence. Mode of 2. That the penalties which may be incurred under the pro- recovering visions of this act shall and may bo recovered in a summary pcua les. Avay, by information on complaint, before a justice or justices of the peace, and shall be levied and applied in the manner directed by an act passed in the 48th year of the reign of his 48 Geo. 3, late Majesty King George the Third, intituled " An Act to ^- ^^- restrain the negotiation of promissory notes and inland bills of exchange under a limited sum in England," with respect to the penalties by the said last-mentioned act imposed ; and all and every the clauses and provisions in the said last-mentioned act contained, relating to the recovery and ajtplication of the penalties thereby imposed, shall be applied and i)ut in exe- cution for tho recovery and application of the penalties by this act imposed, as fully and eifectually, to all intents and pur- poses, as if such clauses and provisions had been heroin repeated and expressly re-enacted. 3 & 4 Will. 4, c. 83. 607 3. Provided always, that it sliall and may be lawful for the The Treasmy lord high treasurer, or for the eommiosioners of his Majesty's may order a Treasury, or any three or more of them, to order and direct ^^l^'^^^'^o^^of that the whole or any part of any penalty which shall be penalties. incui-red under this act shall and may be remitted, or mitigated or abated to such amount, and in such manner and upon such conditions as to such lord high treasurer or commissioners of the Treasury may seem fit and proper. 4. Provided always, that nothing herein contained shall Not to extend extend to any draft or order drawn by any person or persons |o drafts on on his, her, or their banker or bankers, for the payment of the uscfof°tlie money held by such banker or bankers, person or persons, to drawer. the use of the person or persons by whom such draft or order shall be drawn. Meturns of Bank Notes in Circulation. 3 & 4 Will. 4, c. 83. An Act to compel Banks issuing Promisson/ Notes 2)ai/able to Bearer on Demand to make Returns of their Notes in Circu- lation, and to authorize Banks to issue Notes iJuyaMe in London for less than 501. (a). [28th August, 1833.] Whereas it is expedient that all corporations, copartnerships, and persons carrying on banking business, and making and issuing promissory notes payable to bearer on demand, should make returns of the amount of such notes in circulation : be it therefore enacted, &c., that all corporations and copartner- Partnerships ships cari'ying on banking business under the provisions of an and persons act passed in the 7th year of the reign of his late Majesty carrying on _ King George the Fourth, chapter 4G, intituled " An Act for nejfand^''^'" the better regulating copartnerships of certain bankers in jssuin"- pro- England" [setting forth the title of that act, ante, p. 588], as missory notes relates to the same, and all other persons carrying on banking to keep business, and making and issuing promissory notes payable to ff counts of _ bearer on demand, shall resi)ectivoly keep weekly accounts circuktTon ^^ from the passing of this act of the average amount of notes and make in circulation at the end of each week of the corporation, co- periodical partnership, or persons or person so carrying on banking returns there- business and keeping such weekly account; and shall, within ^^°°^ to the one month after the 31st day of December after the passing in^L^ndonT of this act, make up from such weekly account an average {a) Sects. 1 and 3 repealed by Statute Law Revision Act, 1874. 608 APPENDIX OF STATUTES. Sucli returns to be verified ou oath. Penalty for default, oOO/. False swear- ing punished as perjury. Banks of more than six persons may draw ou agent in London, on demand or otherwise, for less than 50/., notwithstand- ing the Act 7 Geo. 4, c. 46. account of the amount of such, notes in circulation during the period between the passing of this act and the mahiug up such account ; and shall also make up a like account at the end of each quarter ending on the 1st day of April, the 1st day of July, the 1st day of October, and the 1st day of January in the year 1834, and every subsequent year, of the average amount of notes in circulation in the preceding quarter, and shall return and deliver such account to the commissioners of stamps at the stamp office in Loudon ; and such accounts and returns shall be verified ujDon the oath of the secretary or accountant or some officer of the corporation, company, or co- l^artnershij:), or persons or person so carrying on banking business and making such return, which oath shall be taken before any justice of the peace, and which oath any justice of the peace is hereby authorized to administer ; and if any cor- poration, company, or copartnership, or persons or person so carrying on banking business, shall neglect to keep such weekly accounts, or to make out or to return or deliver such averages to the commissioners of stamps at the stamp office in London, or if any secretary, accountant, or other person veri- fying any such account or average shall return or deliver to the commissioners of stamps any false account or return of such averages, the corporation, company, or copartnership, or persons or person to whom any such account or averages, or such secretary, accountant, or person verifying the account, shall belong, shall forfeit for every such offence the sum of 500^., and the secretary or other person so offending shall also forfeit for every such offence the sum of 100^. ; and any secre- tary, accountant, or other person who shall knowingly and wilfully take any false oath as to any such account or averages shall be subject to such pains and i^enalties as are by any law in force at the time of taking such oath enacted as to persons convicted of wilful and corrupt perjury. 2. That it shall be lawful for any body politic or corporate whatsoever, erected or to be erected, and for any other persons xmited or to be united in covenants or partnership, exceeding the number of six persons, carrying on business as bankers, to make any bill of exchange or promissoiy note of such cor- poration or copartnership payable in London by any agent of sueli corporation or copartnership in London, or to draw any bill of exchange or promissory note xipon any such agent in London, pa^^able ou demand or otherwise in London, and for any less amount than 501., any thing in the said recited act of the 7th year of the reign of his late jNIajesty King George the I'ourth, or in any other act, to the contrary notwithstanding. 3 & 4 Will. 4, c. 98. 609 The Bank of England Privileges Act, 1833. 3 & 4 Will. 4, c. 98. An Act for giving to the Corporation of the Governor and Com- pany of the Bank cf England certain Privileges for a limited Period, under certain Conditions. [29tli August, 1833.] Whereas an act -svas passed in the 39tli and 40tli years of the reign of his Majesty King Greorge the Third, intituled "An 39 & 40 Act for establishing an agreement with the Grovernor and G-eo. 3, c. 2S. Company of the Bank of England for advancing three mil- lions towards the supply for the service of the year 1800:" and whereas it was by the recited act declared and enacted, that the said governor and company should be and continue a corporation, with such powers, authorities, emoluments, profits, and advantages, and such privileges of exclusive bank- ing, as are in the said recited act specified, subject nevertheless to the powers and conditions of redemption, and on the terras in the said act mentioned : and whereas an act passed in the 7th year of the reign of his late Majesty Iving Cleorge the Fourth, chapter 46, intituled "An Act for the better regu- 7 Geo. 4, lating copartnerships of certain bankers in England" [setting c- 46. out the title of the act, ante, p. 588], as relates to the sarne : and whereas it is expedient that certain privileges of exclusive banking should be continued to the said governor and com- j)any for a further limited period, upon certain conditions: and Avhereas the said Governor and Company of the Bank of England are willing to deduct and allow to the public, from the sums now payable to the said governor and company for the charges of management of the public unredeemed debt, the annual sum hereinafter mentioned, and for the period in this act specified, provided the privilege of exclusive banking specified in this act is continued to the said governor and com- pany for the period specified in this act : may it_ therefore please your Majesty that it maybe enacted; and be it enacted, &c., that the said Governor and Company of the Bank of Bank of Eng- England shall have and enjoy such exclusive privilege of land to enjoy banking as is given by this act, as a body corporate, for the p^-^jj^i^^^^ period and upon the terms and conditions hereinafter men- {janking upon tioned, and subject to termination of such exclusive privilege certain'oon- at the time and in the manner in this act specified. _ _ ditions. 2. That during the continuance of the said privilege, no During such body politic or corporate, and no society or company, or per- privilege, no sons united or to be united in covenants or partnerships, ex- ^!JJJ "f jJJ°™' ceeding six persons, shall make or issue in London, or within 1'^,^^ Tix^per- 65 miles thereof, any bill of exchange or promissory note, or go^s to issue engagement for the payment of money on demand, or upon notes ijayable which any person holding the same may obtain payment on on demand G. R K 610 APPENDIX OF STATU'lES. witliin Lon- don, or 65 miles thereof. Any company or partner- ship may carry on busi- ness of bank- ing- in Lon- don, or within 60 miles thereof, upon the terms herein men- tioned. All notes of the IJank of England pay- able on de- mand which shall ho issued out of Lon- don shall bo payable at tlic demand : provided always, that notliing herein or in the said recited act of the 7th year of the reign of his late Majesty Iviug George the Fourth contained shall be construed to pre- vent any body politic or corporate, or any society or company, or incorporated company or corporation, or copartnership, carrying on and transacting banking business at any greater distance than 65 miles from London, and not having any house of business or establishment as bankers in London, or within 6.5 miles thereof (except as hereinafter mentioned), to make and issue their bills and notes, payable on demand or otherwise, at the place at which the same shall be issued, being more than 65 miles from London, and also in London, and to have an agent or agents in London, or at any other place at which such bills or notes shall be made payable for the purpose of payment only, but no such bill or note shall be for any sum less than 5^., or be re-issued in London, or within 65 miles thereof. 3. A]id whereas the intention of this act is, that the Governor and Company of the Bank of England should, during the period stated in this act (subject nevertheless to such redemp- tion as is described in this act), continue to hold and enjoy all the exclusive privileges of banking given by the said recited act of the 39th and 46th years of the reign of "his Majesty King George the Third aforesaid, as regulated by the said recited act of the seventh year of his late IMajesty Iving George the Fourth, or any prior or subsequent act or acts of parliament, but no other or further exclusive privilege of banking : and whereas doubts have arisen as to the construction of the said acts, and as to the extent of such exclusive privilege ; and it is expedient that all such doubts should be removed, be it therefore declared and enacted, that any body politic or cor- porate, or society, or company, or partnership, although con- sisting of more than six persons, may carry on the trade or business of banking in London, or within 65 miles thereof, provided that such body politic or corporate, or society, or company, or partnership do not borrow, owe, or take up in England any sum or sums of money on their biUs or notes payable on demand, or at any less time than six montlis from the borrowing thereof, during the continuance of the privileges granted by this act to the said Governor and Company of the ]5ank of England. 4. Provided always, and be it further enacted, that from and after the 1st day of August, 1834, all jn-omissory notes payable on demand of the Governor and Company of the 13ank of England which sluill be issued at any place in that part of tlie United Kingdom called England out of London, where the trade and business of banking shall be carried on for and on behalf of the said Governor and Company of tlxo 3 & 4 Will. 4, c. 98. 611 Bank of England, shall be made payable at the place where pbico where such promissory notes shall bo issued; and it shall not bo issued, iSic. lawful for the said governor and company, or any committee, agent, cashier, officer, or servant of the said governor and company, to issue, at any such place out of London, any pro- missory note payable on demand which shall not be mado payable at the place where the same shall be issued, anything in the said recited act of the seventh year aforesaid to the contrary notwithstanding. 5. That upon one year's notice given within six months Exclusive after the expiration of ten years from the 1st day of August, privileges 1834, and upon repayment by parliament to the said governor ht-^'eljy given and company, or their successors, of all principal money, Qj^g ye^.^^°" interest, or annuities which may be due from the public to notice o-ivcn the said governor and company at the time of the expiration at the end of of such notice, in like manner as is hereinafter stipulated and ten years provided, in the event of such notice being deferred until after ^^^^J August, the 1st day of August, 1855, the said exclusive privileges of banking granted by this act shall cease and determine at the expiration of such year's notice ; and any vote or resolution What shall of the House of Commons, signified by the speaker of the said be deemed house in writing, and delivered at the public office of the said sufficient governor and company, or their successors, shall be deemed and adjudged to be a sufficient notice («). 6. That from and after the 1st day of August, 1834, unless Banknotes to and until parliament shall otherwise direct, a tender of a note ^^ ^ ^y^^ or notes of the Governor and Company of the Bank of Eng- jjt^^^e'banif^' land, expressed to be payable to bearer on demand, shall be a and branch legal tender, to the amount expressed in such note or notes, banks. and shall be taken to be valid as a tender to such amount for all sums above 51. on all occasions on which any tender of money may be legally made, so long as the Bank of England shall continue to pay on demand their said notes in legal coin : provided always, that no such note or notes shall be deemed a legal tender of pajonent by the Governor and Company of the Bank of England, or any branch bank of the said governor and company ; but the said governor and company are not to become liable or be required to pay and satisfy, at any branch bank of the said governor and company, any note or notes of the said governor and company not made specially payable at such branch bank ; but the said governor and company shall be liable to pay and satisfy at the Bank of England in London all notes of the said governor and company, or of any branch thereof. («) Repealed by Statute Law Revision Act, 187-i. R R 2 612 APPENDIX OF STATUTES. Accounts of bullion, &c. unci of notes in circulation to be sent Aveekly to the chancellor of the ex- chequer, (S:c. Public to pay the bank one fourth part of the debt of U,G86,800/. Capital stock of the bank may bo reduced. 7 (b). [Bills not having more than three months to run, not suhject to usury laws.] 8. That an account of the amount of hullion and securities in the Bank of England belonging to the said governor and company, and of notes in circulation, and of deposits in the said Lank, shall be transmitted weekly to the chancellor of the exchequer for the time being, and such accounts shall be con- solidated at the end of every month, and an average state of the bank accounts of the preceding three months, made from such consolidated accounts as aforesaid, shall be published every month in the next succeeding London Gazette. (c) 9. Tliat one fourth part of the debt of 14,G8G,800^., now due from the public to the Governor and Company of the Bank of England, shall and may be repaid to the said governor and company. (c) 10. That a general court of proprietors of the said Governor and Company of the Bank of England shall be held at some time between the passing of this act and the 5th day of October, 1834, to determine upon the propriety of dividing and ajDpropriating the sum of 3,638,2oOl^., out of or by means of the sum to be repaid to the said governor and company as hereinbefore mentioned, or out of or by means of the fund to be provided for that purpose, amongst the several persons, bodies politic or corporate, who may be proprietors of the capital stock of the said governor and company on the said 5th day of October, 1834, and upon the manner and the time for making such division and appropriation not incon- sistent with the provisions for that piu"pose herein contained ; and in case such general court, or any adjourned general court, shall determine tliat it will be proper to make such division, then, but not otherwise, the capital stock of the said governor and company shall be and the same is hereby de- clared to be reduced from the sum of 14,553,000/., of which the same now consists, to the sum of 10,914,750/., making a reduction or difference of 3,038,250/. capital stock, and such reduction shall take place from and after the said 5th day of October, 1834 ; and thereupon, out of or by means of the sum to be repaid to the said governor and company as hereinbefore mentioned, or out of or by means of the fund to be provided for that purpose, the simi of 3,638,250/. sterhng, or such pro- portion of the said fund as shall represent the same, sliall be apjDropriated and divided amongst the several persons, bodies politic or corporate, who may be projirietors of the said sum of 14,553,000/. bank stock on the said 5th day of October, {l>) Repealed by the Statute Law Ecvision Act, 18G1 (21 & 25 Vict. c. 101). {r) Sects. 9—13 repealed by Statute Law Revision Act, 1874. 3 Si 4: Will. 4, c. 98. 613 1834, at the rate of 2.5/. sterling for every 100/. of bank stock •which such persons, bodies politic and corporate, may then bo proprietors of or shall have standing in their respective names in the books kept by the said governor and company for the entry and transfer of such stock, and so in proportion for a greater or lesser sum. (c) 11. That the reduction of the share of each proprietor of Governor, and in the capital stock of the said Governor and Company of clep^ity the Bank of England, by the repayment of such one fourth f^pcctors not part thereof, shall not disqualify the present governor, deputy to be dis- governor, or directors, or any or cither of them, or any qualified In' governor, deputy governor, or director who may be chosen in reduction of the room of the present governor, deputy governor, or direc- J^^g'^jf'^^l ° tors at any time before the general court of the said governor gtock. and company to be held between the 2-jth day of March and the 25th day of April, 1835 : provided that at the said general court, and from and after the same, no governor, deputy governor, or director of the said corporation shall be capable of being chosen such governor, deputy governor, or director, or shall continue in his or their respective offices, unless he or they respectively shall at the time of such choice have, and during such his respective office continue to have, in his and their respective name, in his and their own right, and for his and their own use, the respective sums or shares of and in the capital stock of the said corporation in and by the charter of the said governor and company prescribed as the qualification of governor, deputy governor, and directors respectively. (c) 12. That no proprietor shall be disqualified from attending Proprietors and voting at any general court of the said governor and com- not to be dis- pany to be held between the said 5th day of October, 1834, q^^alihed. and the 25th day of April, 1835, in consequence of the share of such proprietor of and in the capital stock of the said governor and company having been reduced by such repay- ment as aforesaid below the sum of 500/. of and in the said capital stock ; provided such proprietor had in his own name the full sum of 500/. of and in the said capital stock on the said 5th day of October, 1834; nor shall any proprietor be re- quired, between the said 5th day of October, 1834, and the 25th day of April, 1835, to take the oath of qualification in the said charter. (c)13. That from and after the said 1st day of August, 1834, ^auk to the said governor and company, in consideration of the privi- '^f^^^^^^^ ^^^ leges of exclusive banking given by this act, shall, during the '^^ 120,000^ continuance of such privileges, but no longer, deduct from the ivom sum sums now payable to the said governor and company, for the aUowed for charges of management of the public unredeemed debt, the ^^J^g^^^^j'^* " debt. {(■) See last note. 614 APPENDIX OF STATUTES. remain in force, except as altered by this act. annual sum of 120,000/., anything in that act or acts of par- liament or agreement to the contrary not-^ithstanding : pro- vided always, that such deduction shall in no respect prejudice or affect the right of the said governor and company to be paid for the management of the public debt at the rate and accord- ing to the terms provided in an act passed in the 48th year of 48Geo. 3, c. 4. his late Majesty King George the Third, intituled "An Act to authorize the advancing for the public service, upon certain conditions, a proportion of the balance remaining in the Bank of England for payment of unclaimed dividends, annuities, and lottery prizes, and for regulating the allowances to be made for the management of the national debt." Provisions of 14. That all the powers, authorities, franchises, privileges, act of 39 & 40 and advantages given or recognized by the said recited act of Geo. 3, to ^]^Q 39th and 40tli years aforesaid, as belonging to or enjoyed by the Governor and Company of the Bank of England, or by any subsequent act or acts of parliament, shall be, and the same are hereby declared to be. in full force and continued by this act, except so far as the same are altered by this act, sub- ject nevertheless to such redemption upon the terms and con- ditions following ; (that is to say), that at any time, upon twelve months' notice to be given after the 1st day of August, 1855, and upon repayment by parliament to the said governor and company, or their successors, of the sum of 11,015,100/., being the debt which will remain due from the public to the said governor and company after the payment of the one fourth of the debt of 14,686,800/., as hereinbefore provided, without any deduction, discount, or abatement whatsoever, and upon payment to the said governor and company and their successors of all arrears of the sum of 100,000/. per annum in the said act of the thirty-ninth and fortieth years aforesaid mentioned, together with the interest or annuities payable upon the said debt or in respect thereof, and also upon repayment of all the principal and interest which shall be owing unto the said governor and company and their succes- sors upon all such tallies, exchequer orders, exchequer bills, or parliamentary funds which the said governor and company or their successors shall have remaining in their hands or be entitled to at the time of such notice to be given as last afore- said, then and in such case, and not till then (unless under the proviso hereinbefore contained), the said exclusive privileges of banking granted by this act shall cease and determine at the expiration of such notice of twelve months. 1 & 2 Vict. c. 9G. 615 Legal Procedure by Joint Stock Baiikii. 1 & 2 YicT. c. 96. An Act to amend, until the end of the next Session of Parlia- ment, the Law relative to Legal Proceedings hxj certain Joint Stock Banking Companies against their own Members, and by such Members against the Companies. [14th August, 1838.] Whereas by an act passed in the 7th year of the reign of his late Majesty King Cfeorge the Fourth, chapter 46, intituled "An Act for the better regulating copartnerships of certain 7 Geo. 4, c. 46. bankers in England" [setting forth the title of the act, ante, p. 588], as relates to the same, it was amongst other things enacted, that it should be lawful for any body politic or cor- porate erected for the purposes of banking, or for any number of persons united in covenants or copartnerships, although such persons so united or carrying on business together should consist of more than six in mimber, to carry on (sub- ject to certain provisions therein contained) the trade or business of bankers in England, in like manner as copart- nerships of bankers consisting of not more than six persons in number might lawfully do •, and it was further enacted, that aU actions and suits against any persons who might be at any time indebted to any such copartnership carrying on business under the provisions of the said act, and all other proceedings at laAV and in equity to be instituted on behalf of any such copartnership against any persons, bodies poHtic or corporate, or others, whether members of such copartner- ship or otherwise, for recovering any debts or enforcing any claims or demands due to such copartnership, or for any other matter relating to the concerns of such copartner- ship, might be commenced and prosecuted in the name of any one of the public officers for the time being of such copartner- ship, to be nominated as therein is mentioned, as the nominal party on behalf of such copartnership, and that actions or suits, and proceedings at law or in equity, to be instituted by any persons, bodies politic or corporate, or others, whether members of such copartnership or otherwise, against such copartnership, should be commenced and prosecuted against any one or more of the public officers for the time being of such copartnership as the nominal defendant on behalf of such copartnership, and that the death, resignation, removal, or any act of such public officer should not abate or prejudice any such action, suit, or other proceeding commenced against or on behalf of such copartnership, but that the same might be continued in the name of any other of the public officers of such copartnership for the time being : and whereas an act 616 APPENDIX OF STATUTES. Banking co- partnerships may sue and be sued. was passed in the 6tliyear of the reign of his said late Majesty, 6Geo. 4, c. 42. intituled "An Act for the better regulation of copartnerships of certain banters in Ireland:" and whereas it is expedient that the said acts should for a limited time be amended so far as relates to the powers enabling any such copartnership, not being a body corporate, to sue any of its own members, and the powers enabling any member of any such copartnership, not being a body corporate, to sue the said copartnership : be it therefore enacted, &c., that any person now being or having been, or who may hereafter be or have been, a member of any copartnership now carrying on or which may hereafter carry on the business of banking under the provisions of the said recited acts may at any time during the contimiance of this act («), in resj)ect of any demand which such pei'son may have, either solely or jointly Avith any other person, against the said copartnership, or the funds or property thereof, commence and prosecute, either solely or jointly with any other person (as the case may rec[uire), any action, suit, or other proceeding at law or in ecj^uity against any public officer appointed or to be appointed under the provisions of the said acts to sue and be sued on the behalf of the said copartnership ; and that any such public officer may in his own name commence and prosecute any action, suit, or other jn'oceeding at law or in equity, against any person being or having been a member of the said copartner- ship, either alone or jointly with any other person, against whom any such copartnership has or may have any demand whatsoever ; and that every person being or having been a member of any such copartnership shall, either solely or jointly with any other jierson (as the case may reqviire), be capable of proceeding against any such copartnership by their public officer, and be liable to be proceeded against, b}^ or for the benefit of the said copartnership, by such public officer as aforesaid, by such proceedings and with the same legal conse- quences as if such person had not been a member of the said copartnershij) ; and that no action or suit shall in anywise be afi'ected or defeated by reason of the plaintiffs or defendants or any of them respectively, or any other person in Avhom any interest may be averred, or who may be in anywise interested or concerned in such action, being or having been a member of the said copartnership ; and that all such actions, suits, and proceedings shall be conducted and have effect as if the same had been between strangers. Proceedings 2. That in case the merits of any demand by or against any in an action such copartnership shall have been determined in any action may be _ qj. g^j{. j^y q^ against any such public officer, the proceedings (a) Repealed by Statute Law Kevision Act, 1874. . 3 & 4 Vict. c. 111. 617 in such action or suit may be pleaded in bar of any other bar of any action or suit bj' or against the public officer of the same co- other action, partnership for the same demand. 3. That all the provisions of the said recited acts relative to Extending actions, suits, and proceedings commenced or prosecuted under provisions of the authority thereof, shall be applicable to actions, suits, and [o*^pr*esent^^ proceedings commenced or prosecuted under the authority of ^ct. this act. 4. That no claim or demand which any member of any such A m(>mbcr'8 copartnershiji may have in respect of his share of the capital ^^'''1'^ ^" or joint stock thereof, or of any dividends, interest, profits, or partnership'" bonus paj-able or apportionable in respect of such share, shall not to be set be capable of being set off, either at law or in equit}', against off against any demand which such copartnership may have against such any demand member on account of any other matter or thing whatsoever ; '^''^^^'^ ^^^\n but all proceedings in respect of such other matter or thing ^^^^ Ymve may be carried on as if no claim or demand existed in respect against him. of such capital or joint stock, or of any dividends, interest, profits, or bonus payable or apportionable in respect thereof. 5. That this act shall continue in force until the end of the Continuance next session of parliament ; and that any such action, suit, or °^ ^°* (")• other proceeding as aforesaid, which during the continuance of this act may have been commenced or instituted, shall (notwithstanding this act may have expired) be carried on in all respects whatsoever as if this act had continued in force («). Legal Procedure hy Joint Sfocic Banks. 3 & 4 Vict. c. 111. A71 Act to continue until the Z\st day of August, 1842, and to extend, the Provisions of an Act of the First and Second Years of Her present JIaJestt/, relating to Legal Proceed- ings by certain Joint Stock Banking Companies against their own Members, and by such Members against the Com- panies. [11th August, 1840.] Whereas an act was passed in the 1st and 2nd years of the reign of her present Majesty, intituled "An Act to extend, l & 2 Vict, until the end of the next session of parliament, the law relative to legal proceedings by certain joint stock banking companies against their own members, and by such members against the companies:" and whereas the said act has been continued until the 31st day of August, 1840, by an act passed {a) This act was continued by 2 & 3 Vict. c. 68, and by 3 & 4 Vict. Q. Ill, and was made perpetual by 5 & 6 Vict. c. 85. Sect. 5 has been repealed by Statute Law Re^-ision Act, 1874. 90. 618 APPENDIX OF STATUTES. Recited act continued. Punishing members of banking- con panies em- bezzling notes, &c. 3 & 4 Will. 4, c. 98. in the last session of parliament, and it is expedient tliat the same should be further continued : be it therefore enacted, &g., that the said first-recited act shall be further continued until the 31st day of August, 1842 (a). 2. And Avhereas it is ex]iedient to extend the provisions of the said act hereby continued in manner hereinafter stated ; be it enacted, that if any person or persons, being a member or members of any banking copartnership within the meaning of the said act, or of any other banting copartnership con- sisting of more than six persons, formed under or in pursuance of an act passed in the 3rd and 4th years of the reign of King William the Fourth, intituled "An Act for giving to the corporation of the Governor and Company of the Bank of England certain privileges, for a limited period, under certain conditions," shall steal or embezzle any money, yoods, effects, hills, notes, securities, or other property of or bclonyiny to any such copartner shij), or («) shall commit any fraud, forgery, crime, or offence against or with intent to injure or defraud any such copartnership, such member or members shall be liable to indictment, information, prosecution, or other pro- ceeding in the name of any of the officers for the time being of any such copartnership in whose name any action or suit might be lawfully brought against any member or members of any such copartnership for every such fraud, forgery, crime, or offence, and may thereupon be lawfully convicted, as if such person or persons had not been or was or were not a member or members of such copartnership ; any law, usage, or custom to the contrary notwithstanding. Spiritual Persons 2)yohibited being Members of Joint Stock Banks. 4 Vict. c. 14. An Act to make yood certain Contracts xohich have been or may he entered into by certain Bankiny and otlier Copartner- shipsib). [18th May, 1841.] Whereas divers associations and copartnerships, consisting of more than six members or shareholders, have from time to time been formed for the purpose of being engaged in and carrying on the business of banking and divers other trades [a) Repealed, as to sect. 1, and the words in i^a/ws in sect. 2, by Statute Law Revision Act, 1874. (/') This statute is a ro-cuactmcnt of 1 Vict. c. 10, oi'igiually temporary and limited in operation, and repealed by the Statute Law Revision Act, 18G1 (24 & 2.5 Vict. c. 101). 7 & 8 YicT. c. 32. 619 and doaliugs for gain and profit, and liavo accordingly for some time past been and are now engaged in carrying on the same by means of boards of directors or managers, committees or other officers, acting on belialf of all the members or share- holders of or j)ersons otherwise interested in snch associations or copartnerships : and whereas divers spiritual persons, having or holding dignities, prebends, canonries, benefices, stipendiary curacies, or lectureships, have been and are mem- bers or shareholders of or otherwise interested in divers of such associations and copartnerships : and whereas it is expe- dient to render legal and valid all contracts entered into by such associations or copartnerships, although the same may now be void by reason of such spiritual persons being or having been such members or shareholders or otherwise interested as aforesaid; be it therefore enacted, &c., that no No associa- such association or coj)artnership already formed or which tion or co- may be hereafter formed, nor any contract either as between paftnership, the members, partners, or shareholders composing such asso- entered '^uto elation or copartnership for the purposes thereof, or as between by any of such association or copartnership and other persons, heretofore them, to be entered into, or which shall be entered into by any such asso- iUeg-il or void ciation or copartnership already formed or hereafter to be by^'^ason formed, shall be deemed or taken to be illegal or void, or to smritual pcr- occasion any forfeiture whatsoever, by reason only of any such sons being spiritual person as aforesaid being or having been a member, members partner, or shareholder of or otherwise interested in the same, thereof. but all such associations and copartnerships shall have the same validity and all such contracts shall and may be enforced in the same manner to all intents and purposes as if no such spiritual person had been or was a member, partner, share- holder of or interested in such association or copartnership : provided always, that it shall not be lawful for any spiritual No spiritual person holding any cathedral preferment, benefice, curacy, or person bene- lectureship, or who shall bo licensed or allowed to perform need or^per- the duties of any ecclesiastical office, to act as a director or ccc^sii^tical ' managing, partner, or to carry on such trade or dealing as duty to act as aforesaid in person. director. Bank Notes Issue Eegulation, and Bank of England Privileges Act. 7 & 8 YicT. c. 32. An Act to regulate the Issue of Bank Notes, and for giving to the Governor and Company of the Bank of England certain Privileges for a limited Period. [19th July, 1844.] Whereas it is expedient to regulate the issue of bills or notes payable on demand : and whereas an act was passed in the 620 API^ENDIX OF STATUTES. 3 & 4 Will. 4, c. 98. Bank to establish a separate de- partment for the issue of notes. Management of the issue by Bank of England. 4th year of the reign of his late Majesty King William the Fourth, intituled " An Act for giving to the corporation of the Governor and Company of the Bank of England certain privi- leges for a limited period, under certain conditions ;" and it is expedient that the privileges of exclusive banking therein mentioned should be continued to the said Governor and Com- pany of the Bank of England, with such alterations as are herein contained, upon certain conditions : may it therefore please your Majesty that it may be enacted ; and be it enacted, &c., that from and after the 31st day of August, 1844, the issue of promissory notes of the Governor and Company of the Bank of England, payable on demand, shall be separated and thencefortli kept wholly distinct from the general banking business of the said governor and company ; and the business of and relating to such issue shall be thenceforth conducted and carried on by the said governor and company in a separate department to be called " The Issue Department of the Bank of England," subject to the rules and regulations hereinafter contained ; and it shall be lawful for the court of directors of the said governor and company, if they shall think fit, to appoint a committee or committees of directors for the conduct and management of such issue department of the Bank of England, and from time to time to remove the members and define, alter, and regulate the constitution and powers of such committee, as they shall think fit, subject to any bye-laws, rules or regulations which may be made for that purj)ose : j)rovided nevertheless, that the said issue department shall always be kept separate and distinct from the banking depart- ment of the said governor and company. 2. That upon the 31st day of August, 1844, there shall be transferred, appropriated, and set apart by the said governor and company to the issue department of the Bank of England securities to the value of fourteen million pounds, whereof the debt due by the public to the said governor and company shall be and be deemed a part ; and there shall also at the same time be transferred, appropriated, and set apart by the said governor and company to the said issue department so much of the gold coin and gold and silver bullion then held by the Bank of England as shall not be required by the banking department thereof ; and thereupon there shall be delivered out of the said issxie department into the said banking depart- ment of the Bank of England such an amoimt of Bank of England notes as, together with the ]3ank of England notes then in circulation, shall be equal to the aggregate amount of the securities, coin, and bullion so transferred to the said issue department of the liank of England ; and the whole amount of Bank of England notes then in circulation, including those delivered to the banldng department of the Bank of England 7 & 8 Vict. c. 32. G2l as aforesaid, shall be deemed to be issued on tlie credit of such securities, coin, and bullion so appropriated and set apart to the said issue department ; and from thenceforth it shall not be lawful for the said governor and company to increase the amount of securities for the time being in the said issue department, save as hereinafter is mentioned, but it shall be lawful for the said governor and company to diminish the amount of such securities, and again to increase the same to any sum not exceeding in the whole the sum of fourteen million pounds, and so from time to time as they shall see occasion ; and from and after such transfer and appropriation to the said issue department as aforesaid it shall not be lawful for the said governor and company to issue Bank of England notes, either into the banking department of the Bank of England, or to any persons or person whatsoever, save in exchange for other Bank of England notes, or for gold coin or for gold or silver bullion received or purchased for the said issue department under the provisions of this act, or in exchange for securities acquired and taken in the said issue department under the provisions herein contained : provided always, that it shall be lawful for the said governor and com- pany in their banking department to issue all such Bank of England notes as they shall at any time receive from the said issue department or otherwise, in the same manner in all respects as such issue would be lawful to any other person or persons. 3. And whereas it is necessary to limit the amount of silver Proportion of bullion on which it shall be lawful for the issue department of silver bullion^ the Bank of England to issue Bank of England notes ; be it r ^^J^^^^^^"^ therefore enacted, that it shall not be lawfid. for the Bank of department. England to retain in the issue department of the said bank at any one time an amount of silver bullion exceeding one fourth part of the gold coin and bullion at such time held by the Bank of England in the issue department. 4. That from and after the 31st day of August, 1844, all All persons persons shall be entitled to demand from the issue department ^\^^g ^^^3 of the Bank of England Bank of England notes in exchange department for gold bullion, at the rate of 3/. 17s. 9f/. per ounce of standard notes for gold gold : provided always, that the said governor and company bullion, shall in all cases be entitled to require such gold bullion to be melted and assayed by persons approved by the said governor and company at the expense of the parties tendering such gold bullion. 5. Provided always, that if any banker who on the 6th day Power to in- of May, 1844, was issuing his own bank notes shall cease to crease sceuri- issue his own bank notes, it shall be lawful for her Majesty g^f, "depart- in council at any time after the cessation of such issue, ui)_on ^^j^^^ ^nd the application of the said governor and company, to authorize issue addi- tional notes. 622 APPENDIX OF STATUTES. and empower the said governor and company to increase the amount of securities in the said issue department heyond the total sum or vakie of fourteen million pounds, and thereupon to issue additional Bank of England notes to an amount not exceeding such increased amount of securities specified in such order in council, and so from time to time : provided always, that such increased amount of securities specified in such order in council, shall in no case exceed the proportion of two-thirds the amount of bank notes which the banker so ceasing to issue may have been authorized to issue under the provisions of this act ; and every such order in council shall be published in the next succeeding London Gfazette. Account to bo 6. That an account of the amount of Bank of England notes +1" "R^^ V '^ issued by the issue department of the Bank of England and Euo-land '^^ gold coin and of gold and silver bullion respectively, and of securities in the said issue department, and also an account of the capital stock, and the deposits, and of the monoj^ and se- curities belonging to the said governor and company in the banking department of the Bank of England, on some day in every week to be fixed by the commissioners of stamps and taxes, shall be transmitted by the said governor and company weekly to the said commissioners in the form prescribed in the schedide hereto annexed marked (A.) («), and shall be pub- lished by the said commissioners in the next succeeding London Gazette in which the same may be conveniently inserted. Bank of 7. That from and after the said 31st day of August, 1844, England the said Governor and Company of the Bank of England shall exempted y^Q released and discharged from the payment of any stamp d^itvupon^^ duty, or comx^osition in respect of stamp duty, upon or in their notes. respect of their promissory notes payable to bearer on demand ; and all such notes shall thenceforth be and continue free and wholly exempt from all liability to any stamp duty whatso- ever. Bank to allow 8. That from and after the said 31st day of August, 1844, 180,000^. per the payment or deduction of the annual sum of 180,000^. made by the said governor and company, under the provisions of the said act passed in the fourth year of the reign of liis late Majesty King William the Eourth, out of the sums payable to them for the charges of management of the public unredeemed debt, shall cease, and in lieu thereof the said governor and company, in consideration of the privileges of exclusive bank- ing, and the exemption from stamp duties, given to them by this act, shall, during the continuance of such privileges and such exemption respectively, but no longer, deduct and allow to the public, from the sums nov,' payable by law to the said («) See note («), post, p. G23. annnm. 7 & 8 Vict. c. 32. 623 governor and company for the cliarges of management of tlie public uiu-edeemed debt, the annual sum of 180,000^., anything in any act or acts of parliament, or in any agreement, to the contrary notwithstanding : provided alvrays, that such deduc- tion shall in no respect prejudice or affect the rights of the said governor and company to bo paid for the management of the public debt at the rate and according to the terms provided in an act passed in the 48th year of the reign of his late Majest}' King George the Third, intituled "An Act to authorize 48 Geo. 3, the advancing for the public service, upon certain conditions, ^- *• a proportion of the balance remaining in the Bank of England, for the payment of unclaimed dividends, annuities, and lottery prizes, and for regulating the allowances to be made for the management of the national debt " (b). 9. That in case, imder the provisions hereinbefore contained, Bank to allow the securities held in the said issue department of the Bank of ^^^ public the England shall at any time bo increased beyond the total Profits of in- amount of fourteen million pounds, then and in each and lation. every year in which the same shall happen, and so long as such increase shall continue, the said governor and company (a) The following is tlie schedule referred to : — SCHEDULE (A.) Bank of England. An Account pursuant to the act 7 & 8 Vict. cap. ending on the day of Issue Department. £ Notes issued for the week Government debt . , . Other secmitics Gold coin and bullion . Silver bullion , Dated the day of 18 . Banking Department. £ cashier. Proprietors' capital Rest Public deposits (to include exchequer, savings banks, commissioners of national debt and dividend accounts) Other deposits Seven-day and other bills . . Government securities (in- cluding dead weight an- nuity) Other securities Notes Gold and silver coin Dated the day of 18 . (J) Kepealed by Statute Law Revision Act, 1874. cashier. 62i ArPEXDIX OF STATUTES. No new bank of issue. Restriction against issue of bank notes. shall, in addition to the said annual sum of 180,000?., mate a further payment or allowance to the public, equal in amount to the net profit derived in the said issue department during the current year from such additional securities, after deduct- ing the amount of the expenses occasioned by the additional issue during the same period, "^liich expenses shall include the amount of any and every composition or payment to be made by the said governor and company to any banker in consideration of the discontinuance at any time hereafter of the issue of bank notes by such banker; and skcIi further pay- ment or allo2va>ice to the jiiihlic hy the said (jovernor and com- pany shall, in every year while the iruhlic shall he entitled to receive the same, he deducted from the amount hy law payahle to the said governor and company for the charges of management of the unredeemed public debt, in the same maimer as the said annual sum of 180,000/. is hereby directed to he deducted there- from («). 10. That from and after the passing of this act no person other than a banker who, on the 6th day of May, 1844, was lawfully issuing his own bank notes shall make or issue bank notes in any part of the United Kingdom. 11. That from and after the passing of this act it shall not be lawful for any banker to draw, accejit, make, or issue, in England or "Wales, any bill of exchange or promissory note or engagement for the j)ayment of money payable to bearer on demand, or to borrow, owe, or take up, in England or "Wales, any svims ot sum of money on the bills or notes of such banker payable to bearer on demand, save and except that it shall be lawful for any banker who was on the 6th day of May, 1844, carrying on the business of a banker in Eng- land or Wales, and was then lawfully issuing, in England or Wales, his own bank notes, under the aiithority of a licence to that eif ect, to continue to issue such notes to the extent and under the conditions hereinafter mentioned, but not further or otherwise ; and the right of any company or partnership to continue to issue such notes shall not be in any manner prejudiced or affected by any change which may hereafter take place in the personal composition of such company or partnershij), either by the transfer of any shares or share therein, or by the admission of any new partner or member thereto, or by the retirement of any present partner or mem- ber therefrom : provided always, that it shall not be lawful for any company or partnership now consisting of only six or less than six persons to issue bank notes at any time after the number of partners therein shall exceed six in the whole. (a) Repealed, as to words in italics, by Statute Law Revision Act, 1874. 7 & 8 YicT. c. 32. G2o 12. That if any banker in any part of the United Kingdom Bankers ■who, after the passing of this act, shall be entitled to issue ceasing to bank notes shall become bankrupt, or shall cease to carry on ^^^'^^ ^°*''^ the business of a banker, or shall discontinue the issue of ^'^g'^*^*^ ^^' bank notes, either by agreement with the Governor and Company of the Bank of England or otherwise, it shall not be lawful for such banker at any time thereafter to issue any such notes. 13. That every banker claiming under this act to continue Existing- to issue bank notes in England or Wales shall, within one ^anks of issue month next after the passing of this act, give notice in writing *^ continue to the commissioners of stamps and taxes, at their head office limitations'*^^ in London, of such claim, and of the place and name and firm at and under which such banker has issued such notes during the twelve weeks next preceding the 27th day of April last ; and thereupon the said commissioners shall ascertain if such banker was, on the 6th day of May, 1844, carrjdng on the business of a banker, and lawfully issuing his own bank notes in England or Wales, and if it shall so appear then the said comxnissioners shall proceed to ascertain the average amount of the bank notes of such banker which were in cir- culation during the said period of twelve weeks preceding the 27th day of April last, according to the returns made by such banker in pursuance of the act passed in the 4th and 5th years of the reign of her present Majest}-, intituled " An Act 4 & 5 Vict, to make further provision relative to the returns to be made c. 50. by banks of the amount of their notes in circulation;" and the said commissioners, or any two of them, shall certify under their hands to such banker the said average amount, when so ascertained as aforesaid ; and it shall be lawful for every such banker to continue to issue his own bank notes after the pass- ing of this act : provided nevertheless, that such banker shall not at any time after the lOtli day of October, 1844, have in circulation upon the average of a period of four weeks, to be ascertained as hereinafter mentioned, a greater amount of notes than the amount so certified. 14. Provided always, that if it shall be made to appear to Provision for the commissioners of stamps and taxes that any two or more united banks, banks have, by written contract or agreement (which contract or agreement shall be produced to the said commissioners), become imited within the twelve weeks next preceding such 27th day of April as aforesaid, it shall be lawful for the said commissioners to ascertain the average amount of the notes of each such bank in the manner hereinbefore directed, and to certify the average amount of the notes of the two or more banks so imited as the amount which the united bank shall thereafter be authorized to issue, subject to the regulations of this act. G. S S G26 APPENDIX OF STATUTES. Duplicate certificate to be publislied in the Gazette. Gazette to be evidence. In case banks become united, com- missioners to certify the amount of bank notes ■which each bank was authorized to issue. Penalty on banks issiaiusr Issuing banks to render accounts. 15. That the commissioners of stamps and taxes shall, at the time of certifying to any banker such particulars as they are hereinbefore required to certify, also publish a duplicate of their certificate thereof in the next succeeding London Gazette in which the same may be conveniently inserted ; and the gazette in which such publication shall be made shall be conclusive evidence in all courts whatsoever of the amount of bank notes which the banker named in such certificate or duplicate is by law authorized to issue and to have in circula- tion as aforesaid. 16. That in case it shall be made to appear to the commis- sioners of stamps and taxes, at any time hereafter, that any two or more banks, each such bank consisting of not more than six persons, have, by written contract or agreement (which contract or agreement shall be produced to the said commissioners), become united subsequently to the passing of this act, it shall be lawful to the said commissioners, iqion the application of such united bank, to certify, in manner herein- before mentioned, the aggregate of the amounts of bank notes which such separate banks were previously authorized to issue, and so from time to time ; and every such certificate shall be published in manner hereinbefore directed ; and from and after such publication the amount therein stated shall be and be deemed to be the limit of the amount of bank notes which such united bank may have in circulation : provided always, that it shall not be lawful for any such united bank to issue bank notes at any time after the number of partners therein shall exceed six in the whole. 17. That if the montlily average circulation of bank notes of any banker, taken in the manner hereinafter directed, shall at any time exceed the amount which such banker is autho- rized to issue and to have in circulation under the provisions of this act, such banker shall in every such case forfeit a sum equal to the amount by which the average monthly circulation, taken as aforesaid, shall have exceeded the amount which such banker was authorized to issue and to have in circulation as aforesaid. 18. That every banker in England and "Wales who, after the 10th day of October, 1844, shall issue bank notes shall on some one day in every week after the 19th day of October, 1844 (such day to be fixed by the commissioners of stamps and taxes) transmit to the said commissioners an account of the amount of the bank notes of such banker in circulation on every day during the week ending on the next preceding Saturday, and also an account of the average amount of the bank notes of such banker in circu- lation during the same week ; and on completing the fii-st period of four weeks, and so on completing each successive period of four weeks, every such banker shall annex to such 7 & 8 Vict. c. 32. 627 account the average amount of bank notes of such banker in circulation during the said four weeks, and also the amount of bank notes which such banker is authorized to issue under the provisions of this act ; and every such account shall be verified by the signatiire of such banker or his chief cashier, or, in the case of a company or partnership, by the signature of a managing director or j^artner or chief cashier of such company or partnership, and shall be made in the form to this act annexed marked (B.) («) ; and so much of the said return as states the weekly average amount of the notes of such bank shall be published by the said commissioners in the next suc- ceeding London Gazette in which the same may be conveni- ently inserted ; and if any such banker shall neglect or refuse to render any such account in the form and at the time required by this act, or shall at any time render a false account, such banker shall forfeit the sum of 100^. for every such offence. 19. That for the purpose of ascertaining the monthly Mode of average amount of bank notes of each banker in circulation ascertaimng the aggregate of the amount of bank notes of each such banker amount of in circulation on every day of business during the first com- bank notes of each banker («) The schedule is as follows : — SCHEDULE (B.) Name and title as set forth | ■Rnnlc in the licence j Name of the firm Firm. Insert head of&ce or prin- ) PItop cipal place of issue . , . . / An Account pursuant to the act 7 & 8 Vict. cap. of the notes of the said bank in circulation during the week ending Saturday the day of 18 . Monday Tuesday Wednesday Thursday Friday Saturday 6) Average of the week .... [To be annexed to this account at the end of each period of four iceeks.'} Amount of notes authorized by law £ Average amount in circulation during the f oxu* ) ^ weeks ending as above j I, being [the banker, chief cashier, managing dii-ector, or partner of the bank, as the case maij k], do hereby certify that the above is a true account of the notes of the said bank in circidatiou dui-ing the Aveek above written. (Signed) Dated the day of 18 . ss2 628 APPENDIX OF STATUTES. in circulation during the first f our •weeks after 10th October, 1844. Commis- sioners of stamps and taxes em- powered to cause the books of bankers con- taining ac- counts of their bank notes in cir- culation to be inspected. Penalty for refusing to allow such inspection. All bankers to return names once a year to the stamp office. plete period of four weeks next after the lOth. day of October, 1844, sucli period ending on a Saturday, shall be divided by the number of days of business in such four weeks, and the average so ascertained shall be deemed to be the average of bank notes of each such banker in circulation during such period of four weeks, and so in each successive period of four weeks, and such average is not to exceed the amount certified by the commissioners of stamps and taxes as aforesaid. 20. And whereas, in order to insure the rendering of true and faithful accounts of the amount of bank notes in circu- lation as directed by this act, it is necessary that the commis- sioners of stamps and taxes should be empowered to cause the books of bankers issuing such notes to be inspected, as here- inafter mentioned : be it therefore enacted, that all and every the book and books of any banker who shall issue bank notes under the provisions of this act in which shall be kept, con- tained, or entered any account, minute, or memorandum of or relating to the bank notes issued or to be issued by such banker, or of or relating to the amount of such notes in circu- lation, from time to time, or any account, minute, or memo- randum, the sight or inspection whereof may tend to secure the rendering of true accounts of the average amount of such notes in circulation, as directed by this act, or to test the truth of any such account, shall be open for the inspection and examination, at all seasonable times, of any officer of stamp duties authorized in that behalf by writing, signed by the commissioners of stamjis and taxes or any two of them ; and every such officer shall be at liberty to take copies of or extracts from any such book or account as aforesaid ; and if any banker or other person keeping any such book, or having the custody or possession thereof, or power to produce the same, shall, upon demand made by any such officer, showing (if required) his authority in that behalf, refuse to produce any such book to such officer for his inspection or examina- tion, or to permit him to inspect and examine the same, or to take copies thereof or extracts therefrom, or of or from any such account, minute, or memorandum as aforesaid kept, con- tained, or entered therein, every such banker or other person so offending shall for every such offence forfeit the sum of 100^. : provided always, that the said commissioners shall not exercise the powers aforesaid without the consent of the com- missioners of her Majesty's Treasury. 21. That every banker in England and "Wales who is now carrying on or shall hereafter carry on business as such shall on the 1st day of January in each year, or within fifteen days thereafter, make a return to the commissioners of stamps and taxes at their head office in London of his name, residence, and occupation, or in the case of a company or partnership, of 7 & 8 Vict. c. 32. 029 the name, residence, and occupation of every person composing or being a member of such, company or partnership, and also the name of the firm imder which such banker, company, or partnership carry on the business of banking, and of every place where such business is carried on ; and if any such banker, company, or partnership shall omit or refuse to make such return within fifteen days after the said 1st day of January, or shall wilf ulty make other than a true return of the persons as herein required, every banker, company, or part- nership so offending shall forfeit and pay the sum of 50/. ; and the said commissioners of stamps and taxes shall on or before the 1st day of "March in every year publish in some newspaper circulating within each town or county respectively a copy of the return so made 'by every banker, company, or partnership carrying on the business of bankers within such town or county respectively, as the case may be. 22. That every banker who shall be liable by law to take Bankers to out a licence from the commissioners of stamps and taxes to ^^^^ °^* * authorize the issuing of notes or bills shall take out a separate if^j^^c'e for and distinct licence for every town or place at which he shall, every place at by himself or his agent, issue any notes or bills requiring which they such licence to authorize the issuing thereof, any thing in any i«sue notes or former act contained to the contrary thereof notwithstanding : " ^■ provided always, that no banker who on or before the 6th day Proviso in of May, 1844, had taken out four such licences, which on the fj^'^T"' °* , said last-mentioned day were respectively in force, for the ^^^ ^^^ g^^,]^ issuing of any such notes or bills at more than four separate licences in towns or places, shall at any time hereafter be required to force on the take out or to have in force at one and the same time more 6th of May, than four such licences to authorize the issuing of such notes or bills at all or any of the same towns or places specified in such licences in force on the said 6th day of May, 1844, and at which towns or places respectively such bankers had on or before the said last-mentioned daj' issued such notes or bills in pursuance of such licences or any of them respectively. 23. And whereas the several bankers named in the schedule Compensation hereto annexed marked (C.) (a) have ceased to issue their own to certain bank notes under certain agreements with the Governor and ^^^g'^'j^ q^.^ Company of the Bank of England ; and it is expedient that schedule, such agreement should cease and determine on the 31st day of December next, and that such bankers should receive by way of compensation such composition as hereafter mentioned ; and a list of such bankers, and a statement of the maximum sums in respect of which each such banker is to receive com- pensation, hath been delivered to the commissioners of stamps and taxes, signed by the chief cashier of the Bank of Eng- ((7) See note (o), post, p. 630. 630 APPENDIX OF STATUTES. land ; he It therefore enacted, that the several agreements suh- sisting hetiveen the said governor and company and the several bankers mentioned in the schedule hereto relating to the issue of Banli of England notes shall cease and determine on the ^\st day of December next ; and from and after that day {h) the said governor and company shall i^ay and allow to the several hankers named in the schedule hereto marked (C.) (c), so long as snch hankers shall he willing to receive the same, a com- position at and after the rate of \l. per centum per anmmi on the average amount of the Bank of England notes issued hy such hankers respectively and actually remaining in circula- tion, to he ascertained as follows; (that is to say,) on sorne day in the month of April, 1845, to be determined by the said governor and company, an account shall be taken of the Bank of England notes delivered to such bankers respectively by the said governor and company within three months next preceding, and of such of the said Bank of England notes as shall have been returned to the Bank of England, and the balance shall be deemed to be the amount of the Bank of England notes issued by such bankers respectively and kept in circulation; and a similar account shall be taken at in- (i) As to words in italics repealed by Statute Law Revision Act, 1874. (r) SCHEDULE (C.) Banks which have ceased to issue their own bank notes under certain agreements with the Governor and Company of the Bank of Enghmd. Bank of Liverpool. J. Earned & Co. Biddtdph, Brothers & Co. Birmingham Banking Co. Birmingham Tovni and District Bank. Birmingham and Midland Banking Co. Burgess & Son. Coopers fcTiu-ton. CunclifEes, Brookes & Co. Deane, Littlehales & Deanc. Dendy, Comper & Co. Devon and Cornwall Banking Co. Grants k GiUman. Hampslaire Banking Co. James W. B. HaU. J. M. Head & Co. Henty, TJpperton & Olliver. Thomas Kinnersly & Sons. E. J. Lamb ton & Co. Liverpool Commercial Banking Co. Liverpool Union Bank. Liverpool Borough Bank. Manchester and Liverpool District Banking Co. Manchester and Salf ord BankingCo. Monmouth and GlamorganBanking Co. Moss & Co. Mangles, Brothers. Newcastle Commercial Banking Co. Ne^\-castle-on-Tyne Joint Stock Banking Co. North of England Joint Stock Banking Co. Northumberland and Dm-ham Dis- trict Bank. Portsmouth and South Hants Bank Co. T. & R. Eaikcs & Co. Robinson & Brodhurst. Sheffield Union Bank. John Stovcld. Sunderland Joint Stock Banking Co. TugweU & Co. Union Bank of Manchester. Vivian, Ivitson & Co. Watts, Whitcway & Co. J. & J. C. Wright & Co. Webb, Holbrook & Spencer. 7 & 8 Vict. c. 32. 631 tervals of three calendar montlis ; and the average of the balances ascertained on taking four such accounts shall be deemed to be the average amount of Bank of England notes issued by such bankers respectively and kept in circulation during the year 1845, and on which amount such bankers are respectively to receive the aforesaid composition of one per centum for the year 1845 ; and similar accounts shall be taken in each succeeding year ; but in each year such accounts shall be taken in diiferent months from those in which the accounts of the last preceding year were taken, and on different days of the month, such months and days to be determined by the said governor and company ; and the amount of the compo- sition payable as aforesaid shall be paid by the said governor and company out of their own funds ; and in case any differ- ence shall arise between any of such bankers and the Grovernor and Company of the Bank of England in respect of the com- position payable as aforesaid, the same shall be determined by the chancellor of the eschec^uer for the time being, or by some person to be named by him, and the decision of the chancellor of the exchequer, or his nominee, shall be final and conclusive : provided always, that .it shall be lawful for any banker named in the schedule hereto annexed marked (0.) (d) to discontinue the receipt of such composition as aforesaid, but no such banker shall by such discontinuance as aforesaid thereby acquire any right or title to issue bank notes. 24. That it shall be lawful for the said governor and com- ^ank of pany to agree with every banker who, under the provisions ^g^^f Jfo" e^°to of this act, shall be entitled to issue bank notes, to allow to compound such banker a composition at the rate of one per centum per with issuing annum on the amount of Bank of England notes which shall banks. be issued and kept in circulation by such banker, as a con- sideration for his relinquishment of the privilege of issuing his own bank notes ; and all the provisions herein contained for ascertaining and determining the amount of composition payable to the several bankers named in the schedule- hereto marked (0.) (r/), shall apply to all such other bankers with whom the said governor and company are hereby authorized to agree as aforesaid ; provided that the amount of composition payable to such bankers as last aforesaid shall in every case in which an increase of securities in the issue department shall have been authorized by any order in council be deducted out of the amoimt payable by the said governor and company to _ _ the public under the provisions herein contained : provided Limitation of always, that the total sum payable to any banker, under the compositions, provisions herein contained, by way of composition as afore- said, in any one year, shall not exceed, in case of the bankers (d) See note (c), ante, p. 630. G32 APPENDIX OF STATUTES. Compositions to cease on 1st August, 1856. Banks witliin 65 miles of London may accept, &:c. bills. Bank to enjoy privileges, subject to re- demption. mentioned in the schedule hereto marked (C.) («), one per centum on the several sums set against the names of such bankers respectively in the list and statement delivered to the commissioners of stamps as aforesaid, and in the case of other bankers shall not exceed one per centum on the amount of bank notes which such bankers respectively would otherwise be entitled to issue under the provisions herein contained. 25. That all the compositions payable to the several bankers mentioned in the schedule hereto marked (C.) (a), and such other bankers as shall agree with the said governor and com- pany to discontinue the issue of their own bank notes as afore- said, shall, if not previously determined by the act of such banker as hereinbefore provided, cease and determine on the 1st day of August, 185G, or on any earlier day on which parliament may prohibit the issue of bank notes (b). 26. That from and after the passing of this act it shall be lawful for any society or company or any persons in partner- ship, though exceeding six in number, carrying on the busi- ness of banking in London, or within 65 miles thereof, to draw, accept or indorse bills of exchange, not being payable to bearer on demand, any thing in the hereinbefore recited act passed in the 4th year of the reign of his said Majesty Iving AVilliam the Fourth, or in any other act, to the contrary notwithstanding. 27. That the said Grovernor and Company of the Bank of England shall have and enjoy such exclusive privilege of banking as is given by this act, upon such terms and conditions, and subject to the termination thereof at such time and in such manner as is by this act provided and specified ; and all and every the powers and authorities, franchises, privileges and advantages, given or recognized by the said recited act passed in the 4th year of the reign of his Majesty King William the Fourth, as belonging to or enjoyed by the said Governor and Company of the Bank of England, or by any subsecjuent act or acts of parliament, shall be and the same are hereby declared to be in full force, and continued by this act, except so far as the same are altered by this act ; subject nevertheless to redemption upon the terms and conditions following; (that is to say,) at anytime uj)ou twelve months' notice to be given after the 1st day of August, 1855, and upon repayment by parliament to the said governor and company or their successors of the sum of 11,015,100/., being the debt now due from the public to the said governor and company, («) See note (c), ante, j). 630. [h) By 19 Vict. c. 20, s. 1, sect. 25 was repealed, and right to compound continued ; but by 38 & 3'J Vict. c. 61, sect. 1 of 19 Vict. c. 20, has in its turn been repealed. 8 & 9 ViLT. c. 76. 633 without any deduction, discount or abatement whatsoever, and upon jDayment to the said governor and company and their successors of all arrears of the sum of 100,000/. per annum, in the last-mentioned act mentioned, together with the interest or annuities payable upon the said debt or in respect thereof, and also upon repa^Tnent of all the principal and interest which shall be owing unto the said governor and company and their successors upon all such tallies, exchequer orders, ex- chequer bills or parliamentarj'- funds which the said governor and company or their successors shall have remaining in their hands or be entitled to at the time of such notice to be given as last aforesaid, then and in such case, and not till then, the said exclusive privileges of banking granted by this act shall cease and determine at the expiration of such notice of twelve months ; and any vote or resolution of the House of Commons, signified under the hand of the speaker of the said house in writing, and delivered at the public office of the said governor and company, shall be deemed and adjudged to be a sufficient notice. 28. That the term "bank notes" used in this act shall ex- Interpreta- tend and apply to all bills or notes for the payment of money tion clause, to the bearer on demand other than bills or notes of the Governor and Company of the Bank of England ; and that the term " Bank of England notes " shall extend and apply to the promissory notes of the Grovernor and Company of the Bank of England payable to bearer on demand ; and that the term " banker " shall extend and appty to all corporations, societies, partnerships and persons, and every individual person carrying on the business of banking, whether by the issue of bank notes or otherwise, except only the Governor and Company of the Bank of England ; and that the word "person" used in this act shall include corporations ; and that the singidar number in this act shall include the plural number, and the plural number the singular, except where there is anything in the context repugnant to such construction ; and that the masculine gender in this act shall include the feminine, except where there is anything in the context repugnant to such con- struction. Recovery and Ajiplication of Penalties under 7 (^' 8 Vict. c. 32. 8 & 9 Vict. c. 76. An Act . ... to amend an Act of the last Session of Parliament for rec/idating the Isszte of Bank Notes in Eng- land. [4th August, 1845.] 5. And whereas an act was passed in the last session of Provision for parliament, intituled "An Act to regulate the issue of bank recovery and application of 634 APPENDIX OF STATUTES, penalties notes, and for giving to tlie Governor and Company of the under 7 & 8 Bank of England certain privileges for a limited period," and Vict. c. 32. certain penalties are thereby imposed for oifences against the provisions of the same act, and it is expedient to provide for the recovery and application of such penalties : be it enacted, that from and after the passing of this act all pecuniary penalties imposed by or incurred under the said last-recited act may be sued or prosecuted for and recovered, for the use of her Majesty, in the name of her Majesty's attorney-general or solicitor-general, or of any person authorized to sue or prosecute for the same by writing under the hands of the commissioners of stamps and taxes, or in the name of any officer of stamp duties, by action of debt, bill, plaint or infor- mation in the Court of Exchequer at Westminster, in such and the same manner as any penalties imposed by any of the laws now in force relating to the duties under the manage- ment of the said commissioners ; and it shall be lawful in all cases for the said commissioners, either before or after any proceedings commenced for recovery of any such penalty, to mitigate or compound any such penalty as they shall think fit, and to stay any such proceedings after the same shall have been commenced, and whether judgment may have been obtained for such penalty or not, on payment of part only of any such penalty, with or without costs, or on payment only of the costs incurred in such proceedings, or of any part thereof, or on such terms as such commissioners shall judge reasonable : provided always, that in no such proceeding as aforesaid shall any essoign, protection, wager of law, or more than one imparlance, be allowed ; and all pecuniary penalties imposed by or incurred under the said last-recited act, by whom or in whose name soever the same shall be sued or prosecuted for or recovered, shall go and bo applied to the use of her Majesty, and shall be deemed to be and shall bo accounted for as part of her Majesty's revenue arising from stamp duties, anything in any act contained, or any law or usage to the contrary, in anywise notwithstanding : provided always, that it shall be lawful for the said commissioners, at their discretion, to give all or any part of such penalties as rewards to any person or persons who shall have detected the offenders, or given information, which may have led to their prosecution and conviction. 17 & 18 Vict. c. 83. 635 Drafts on Bankers imyahle to Order on Demand. 16 & 17 YicT. c. 59. An Act to repeat certain Stamp Duties, and to grant others in lieu thereof; to amend the Lairs relating to Stamp Duties, and to make perpetual certain Stamp Duties in Ireland {a). [4tli August, 1853.] 19, Provided always, tliat any di-aft or order drawn upon a Drafts on banker for a sum of money payable to order on demand which. bd. 205. After the commencement of this act there shall be repealed the several acts specified in the first part of the third schedule hereto, with this qualification, that so much of the said acts as is set forth in the second part of the said third schedule shall be hereby re-enacted and continued in force as if unrepealed. THIRD SCHEDULE. First Part. An Act to regulate Joint Stock Banks in England. An Act to regulate Joint Stock Banks in Scotland and Ireland. An Act to amend the Law relating to Banking Companies. An Act to amend the Joint Stock Banking Companies Act, 1857. An Act to enable Joint Stock Banking Companies to be formed on the principle of Limited LiabiUty. Secoio) Part. 7 (fe 8 Yict. c. 113, s. 47. Every company of more than six persons established on the 6th day of May, 1844, for the purpose of carrj'ing on the trade or business of bankers within the distance of sixty-live miles from London, and not within the provisions of the act passed in the session holden in the 7th and 8th years of the reign of her present Majesty, chapter 113, shall have the same jjowers and pri\'ileges of suing and being sued in the name of any one of the pubhc officers of such copartnership as the nominal plaintiff, petitioner, or de- fendant on behalf of such copartnership ; and all judgments, decrees, and orders made and obtained in any such suit may be enforced in like manner as is provided with respect to such com- panies carrj'ing on the said trade or business at any place in England exceeding the distance of sixty-five miles from London, irndfu- the provisions of an act jiassed in the 7th year of the reign of Geo. 4, c. 4G, intituled " An Act for the better regulating co- partnerships of certain bankers in England, and for amending so much of an act of the 3U & 40 Geo. 3, intituled ' An Act for 7 & 8 Vict. c. 113 . 9 & 10 Vict. c. 75 . 20 & 21 Vict. c. 49 . 21 & 22 Vict. c. 60. 21 & 22 Vict. c. 91 . 27 & 28 YicT. c. 32. 641 establisliing an agreement with the Governor and Company of the Bank of England for advancing the sum of three millions towards the supply for the service of the year 1800,' as relates to the same," provided that such first-mentioned company shall make out and deliver from time to time to the commissioners of stamps and taxes the several accounts or returns required bj* the last-mentioned act, and all the provisions of the last-recited act as to such accounts or returns shall be taken to apply to the accounts or returns so made out and delivered by such first-mentioned companies as if they had been originally included in the provisions of the last-recited act. 20 & 21 Vict. 0. 49, Part of Section Xn. Xotwithstanding anything contained in any act passed in the Power to session holden in the 7th and 8th years of the reign of her present form banking Majesty, chapter 11 o, and intituled "An Act to regulate joint stock copartner- banks in England," or in any other act, it shall be lawful for any ships of ten number of persons, not exceeding ten, to carry on in jtartnership Persons, the business of banking, in the same manner and upon the same conditions in all resj^ects as any company of not more than six 23ersons could before the passing of this act have carried on such business. Banhing Copaiincrsliips suing and sued hi/ PtiUic Officer. 27 & 28 Vict. c. 32. An Act to enahle certain Banking Copartnersliips which shall discontinue the issue of their own Bank Notes to sue and be sued brj their Public Officer. [30th June, 1864.] Whereas by the 7 Geo. 4, c. 46, banking copartnerships, 7 Geo. 4, registered and carrying on "business under that act, and ^- ^^• entitled to issue their own bank notes under the 7 & 8 Vict. 7 & 8 Vict. c. 32, have certain powers and privileges of suing and being ^- ^-• sued in the name of any one of their public officers, so long as such copartnerships carry on business under the provisions of the first-recited act : and whereas by the secondly-recited Section 2i. act such copartnerships are empowered to agree with the G-overnor and Company of the Bank of England to discon- tinue the issue of bank notes, and it is thereby enacted, that if any such banking copartnerships shall discontinue the issue of bank notes, either by agreement with the Governor and Company of the Bank of England or otherwise, it shall not be lawful for such copartnerships at any time thereafter to issue such notes: and whereas doubts are entertained whether Section 12, the powers and privileges so given by the first-recited act will extend to such of the said banking cojiartnerships as shall discontinue the issue of bank notes, and shall afterwards com- mence and carry on the trade or business of bankers in London, or within 6.3 miles from London, in such manner as they will then by law be authorized to do, and it is expedient that such G. T T 642 APPENDIX OF STATUTES. Banks dis- coutiuuing the issue of bank notes empowered to sue and bo sued by their jDublic officer. And not to empower any bank to carry on business in London. doubts bo removed : bo it tliereforo declared and enacted as follows : 1. From and after the passing of this act, every banking copartnership registered and carrying on business under the first-recited act, and entitled to issue their own bank notes under the secondly-recited act, which shall discontinue the issue of such bank notes, and shall afterwards commence and carry on the trade or business of bankers in London, or within G5 miles from London, in such manner as they shall be autho- rized to do, shall have the same powers and privileges of suing and being sued in the name of one of their public officers of such copartnership, as the nominal plaintiif, petitioner, or defendant, on behalf of such copartnership : and all judg- ments, decrees and orders made and obtained in any such suit may bo enforced in like manner as is provided by the first- recited act with respect to copartnerships carrying on business imder the provisions of that act : provided that nothing in this act contained shall empower any copartnership to carry on tlie trade or business of bankers in London, or within 6.5 miles therefrom, in any case where by the existing law they are not authorized so to do. Contracts for sale, &c. of sliaves to be void unless the numbers by which such sliares arc distin- guished are set forth in contract. Sale and Purchase of Shares in Joint Sfoch Banking ■ Companies. 30 Vict. c. 29. An Act to amend the Laio in respect of the Sale and Purchase of Shares in Joint Stock Bankiiig Compa7}ies. [17th Jimo, 1867.] WiiEiiEAS it is expedient to make provision for the prevention of contracts for the sale and purclmso of shares and stock in joint stock banking companies of which the sellers are not pos- sessed or over which they have no control : be it enacted, &c. 1. That all contracts, agreements, and tokens of sale and purchase which shall, from and after the 1st day of July, 1867, be made or entered into for the sale or transfer, or pur- porting to be for the sale or transfer, of any share or shares, or of any stock or other interest, in any joint stock banking company in the United Kingdom of Great Britain and Ireland constituted under or regulated by the provisions of any act of parliament, royal charter, or letters patent, issuing shares or stock transferable by any deed or written instrument, shall bo null and void to all intents and purposes whatsoever, imless such contract, agreement, or other token shall set forth and designate in writing such shares, stock, or interest by the 33 <) For 3 and 4 read 4 and .') (38 Vict. c. 13, s. 3). * 40 YicT. c. 2. C55 Treasury and Exchequer Bills. 40 Vict. c. 2. An Act to provide for the Preparation, Issue, and Payment of Treasury Bills, and make further Provision respectiny Exchequer Bills. [IGtli March, 1877.] Wheeeas it is expedient to provide for tlie issue of Treasury bills in cases -u-here the issue of excliequer bills by tlio treasury is authorized : Be it therefore enacted by the Queen's most excellent Majesty, by and with the advice and consent of the lords spiritual and temporal, and commons, in this present parlia- ment assembled, and by the authority of the same, as follows : 1. This act may be cited as the Treasury Bills Act, 1877. Short titles. The act of the session of the twenty-ninth and thirtieth years of the reign of her present Majesty, chapter twenty- five, intituled "An Act to consolidate and amend the several laws for regulating the preparation, issue, and payment of exchequer bills and bonds," is in this act referred to and may be cited as the Exchequer Bills and Bonds Act, 1866, and that act and this act may be cited together as the Ex- chequer and Treasury Bills Acts, 1866 and 1877. 2. In this Act, — _ _ Definitions. The expression "Treasury" means the Commissioners of Her Majesty's Treasury. The expression "Bank of England" means the Governor and Company of the Bank of Eng-land. The expression ' ' Comptroller and Auditor General of the receipt and issue of Her Majesty's Exchequer " includes, in case of the illness or absence of the comptroller, the assistant comptroller and auditor. The expression "financial year " means the twelve months beginning on the first day of April and ending on the following thirty-first day of March. The expression "prescribed" means prescribed by regula- tions made under this act. 3. Where the Treasury have authority under any act of Raisin Commissioners of Inland Eevenue, and also any savings bank ^ud "bank- certified under the acts relating to savings banks, and also any ers' books." post office savings bank. The fact of any such bank having didy made a return to the Commissioners of Inland lievenue may be proved in any legal proceeding by production of a copy of its return verified by the affidavit of a partner or officer of the bank, or by the pro- duction of a copy of a newspaper purporting to contain a copy of such return published by the Commissioners of Inland lievenue ; the fact that any such savings bank is certified under the acts relating to savings banks may be proved by an office or examined copy of its certificate ; the fact that any such bank is a post office savings bank may be proved by a certificate purporting to be under the hand of her Majestv's Postmaster-General or one of the secretaries of the Post Office. Expressions in this act relating to "bankers' books" in- clude ledgers, day books, cash books, account books, and all other books used in the ordinary business of the bank. C70 APPENDIX OF STATUTES. Interpreta- tion of "legal proceeding," ' ' court, ' ' "judge." Computation of time. 10. In this act — The expression " legal proceeding" means any civil or criminal proceeding or inc[uiry in which evidence is or may be given, and includes an arbitration ; The expression "the court" means the court, judge, arbitrator, persons, or person before whom a legal proceeding is held or taken ; The expression "a judge" means with respect to England a judge of the High Court of Justice, and with respect to Scotland a lord ordinary of the Outer House of the Court of Session, and with respect to Ireland a judge of the High Court of Justice in Ireland ; The judge of a county court may with respect to any action in such court exercise the powers of a judge under this act. 11. Suuda}', Christmas Day, Good Friday, and any bank holiday shall be excluded from the computation of time under this act. Short title. Act not to apply to Bank of England. Act to be con- strued with 25 & 2G Vict. c. 89, 30 & 31 Vict. c. 131, and 40 &41 Vict. c. 26. Registration anew of com- pany. 25 & 26 Vict. c. 89. 30 & 31 Vict. c. 131. 40 & 41 Vict. c. 20. Companies Act, 1879. 42 & 43 YiCT, c. 7G. An Act to amend the Laiv icith respect to the LkibiUty of Members of Bunldng and other Joint Stock Companies ; and for other purposes. [15th August, 1879.] Be it enacted by the Queen's most excellent majesty, by and with the advice and consent of the lords spiritual and tem- 23oral, and commons, in this present parliament assembled, and by the authority of the same, as follows : 1. This act may be cited as the Companies Act, 1879. 2. This act shall not apply to the Bank of England. 3. This act shall, so far as is consistent with the tenor thereof, be construed as one with the Companies Acts, 18G2, 1867', and 1877, and those acts together with this act may be referred to as the Companies Acts, 18G2 to 1879. 4. Subject as in this act mentioned, any company registered before or after the passing of this act as an unlimited com- pany may register under the Companies Acts, 18G2 to 1879, as a limited company, or any company already registered as a limited company may re-register under the provisions of this act. The registration of an unlimited company as a limited com- pany in pursuance of this act shall not affect or prejudice any debts, liabilities, obligations, or contracts incurred or entered into by, to, with, or on behalf of such company prior to regis- tration, and such debts, liabilities, contracts, and obligations 42 & 43 Vict. c. 70. . 671 may be enforced in manner provided by Part Til. of tlio 42 k 43 Vict. Companies Act, 1862, in the case of a company registering in c. 76. pursuance of tliat part. 25 & 26 Vict. 5. An imlimited company may, by tlie resolution passed by ^- ^^• the members Avben assenting to registration as a limited com- Reserve pany under the Companies Acts, 1862 to 1879, and for the capital of purpose of such registration or otherwise, increase the nominal how provided amount of its capital by increasing the nominal amoimt of .-,. ._ .-,, „. each of its shares. ~ 89 " Provided always, that no part of such increased capital 30 & 31 Vict, shall be capable of being called up, except in the event of and c. 131. for the purposes of the company being wound up. ^^ ^ '^^ "Vict. And, in cases where no such increase of nominal capital % ^/^3 y- f may be resolved upon, an unlimited company may, by such cr76. resolution as aforesaid, provide that a portion of its uncalled capital shall not be capable of being called up, except in the event of and for the purposes of the company being wound up. A limited company may by a special resolution declare that any portion of its capital which has not been already called up shall not be capable of being called up, except in the event of and for the purpose of the company being wound up ; and thereupon such portion of capital shall not be capable of being called up, except in the event of and for the purposes of the company being wound up. 6. Section one hundred and eighty-two of the Companies 25 & 26 Vict. Act, 1862, is hereby repealed, and in place thereof it is c. 89, s. 182, enacted as follows : — A bank of issue registered as a limited j".*^!?*^'^. ' ^°^ company, either before or after the passing of this act, shall tauk^of issue not be entitled to limited liability in respect of its notes ; and unlimited in the members thereof shall continue liable in respect of its respect of notes in the same manner as if it had been registered as an ^otes. unlimited company ; but in ease the general assets of the company are, in the event of the company being wound up, insuiflcient to satisfy the claims of both the noteholders and the general creditors, then the members, after satisf jdng the remaining demands of the note-holders, shall be liable to contribute towards payment of the debts of the general cre- ditors a sum equal to the amount received by the note-holders out of the general assets of the company. Por the purposes of this section the expression "the general assets of the company " means the funds available for pay- ment of the general creditor as well as the note-holder. It shall be lawful for any bank of issue registered as a limited company to make a statement on its notes to the effect that the Hmited liability does not extend to its notes, and that the members of the company continue liable in respect of its notes in the same manner as if it had been registered as an unlimited company. 672 APPENDIX OF STATUTES. Audit of accounts of banking comj)anies. Signature of balance sbcet. Application of 25 & 26 Vict. c. 89, 30 & 31 Vict. c. 131, and 40 &41 Vict. c. 26. 7. (1.) Once at the least ill every year the accounts of every banking company registered after the passing of this act as a limited company shall be examined by an auditor or auditors, who shall be elected annually by the company in general m.eeting. (2.) A director or officer of the company shall not be capable of being elected auditor of such company. (3.) An auditor on ciuitting office shall bo re-eligible. (4.) If any casual vacancy occurs in the office of any auditor the surviving auditor or auditors (if any) may act, but if there is no surviving auditor, the directors shall forthivith call an extraordinary general meeting for the purpose of sux^plying the vacancy or vacancies in the auditorship. (.3.) Every auditor shall have a list delivered to him of all books kept by the company, and shall at all reasonable times have access to the books and accounts of the company ; and any auditor may, in relation to such books and accounts, examine the directors or any other officer of the company : provided that if a banking company has branch banks be- yond the limits of Europe, it shall be sufficient if the auditor is allowed access to such copies of and extracts from the books and accounts of any such branch as may have been transmitted to the head office of the banking company in the United Kingdom. (6.) The auditor or auditors shall make a report to the members on the accounts examined by him or them, and on every balance sheet laid before the company in general meet- ing during his or their tenure of office ; and in every such report shall state whether, in his or their opinion, the balance sheet referred to in the report is a full and fair balance sheet properly drawn up, so as to exhibit a true and correct view of the state of the company's affairs, as shown by the books of the company ; and such report shall be read before the company in general meeting. (7.) The remuneration of the auditor or auditors shall be fixed by the general meeting appointing such auditor or auditors, and shall be paid by the company. 8. Every balance sheet submitted to the annual or other meeting of the members of every banking company registered after the passing of this act as a limited company shall be signed by the auditor or auditors, and by the secretary or manager" (if any), and by the directors of the company, or thi-ee of such directors at the least. 9. On the registration, in pursuance of tliis act, of a com- pany wliich has been already registered, the registrar shall make provision for closing the former registration of the company, and may dispense with the delivery to him of copies of any dociimcnts with copies of which he was fur- 43VicT. c. 11. 373 nishecl on the occasion of the original registration of the company; but, save as aforesaid, the registration of such a ,,"^ *^ " company shall take place in the same manner and have the ', " ' ^ same effect as if it were the first registration of that company ~'^ ^'^ ~ ^° " under the Companies Acts, 1862 to 1879, and as if the provi- 30 .fc'si Vict, slons of the acts under which the company -was previously c. 131, registered and regulated had been contained in different acts 40 & 41 Vict. of parliament from those under -which the company is regis- ^l^^i^'/o y- ^ tered as a limited company. c^'G. 10. A company authorised to register under this act may p . ., ^ » register thereunder and avail itself of the privileges conferred ^^j. available by this act, notwithstanding any provisions contained in any notwith- act of parliament, royal charter, deed of settlement, contract standing con- of copartnery, cost book, regulations, letters patent, or other stitution of instrument constituting or regulating the company. company. India Stock {Powers of Attorney) Ad, 1880. 43 Vict. c. H. An Act to make Poivers of Attorney and Requests for Trans- niission of Dividend Warrants hy Post relatiny to India Five per centum Stock applicable to India Four per centuin Stock. [19th March, 1880.] 1. This act may be cited as India Stock (Powers of Attorney) Short title. Act, 1880. 2. Every power of attorney in force at the time of the passing Powers of of this act for the sale and transfer of any India five per cent, attorney for stock shall, unless it be legally revoked or become void, remain saleandtrans- in force for the purpose of enabling the attorney or attorneys ff^Vr^ ent. therein named or referred to to receive and give receipts for gtock to apply any principal sum of such India five per cent, stock, and to to India four sell and transfer any India four per cent, stock, that may be per cent, accepted in exchange for such five per cent, stock, and to stock, receive the consideration money and give receipts for the same. 3. Every power of attorney in force at the time of the Powers of passing of this act for the receipt of dividends on any India attorney for five per cent, stock shall, unless it be legally revoked or JiJIdendf on become void, remain in force for the purpose of enabling the j^^^^^ ^^g p^j. attorney or attorneys therein named or referred to to receive cent, stock to the dividends to accrue on India four per cent, stock, and also apply to India to receive the said pajmient of one pound ten shillings per fo^uj^^per cent, cent, on India five per cent, stock which will become payable ^^^^ '• on the fiftli day of July one thousand eight Imndred and eighty. o. X X 674 Eequests for post dividend warrants in respect of India five per cent, stock, to apply to India four per cent, stock. APPENDIX OF STATUTES (sCOTLAND). 4. Every request for the transmission of dividend warrants by post relating to India five per cent, stock in force at tlie time of the passing of this act, or which may hereafter be made, in pursuance of the act of the 34th and 35th Victoria, chapter 29, shall, unless it be legally revoked or become void, extend and apply to India four per cent, stock as if the stock mentioned in such request were therein described as India four -pcv cent, stock. 43 & 44 Vict. c. 20. An Act to grant and alter certain Duties of Inland Revenue and to amend the Laiv in relation to certain other Duties. 57. It shall not after the passing of this act be obligatory on the commissioners to publish in any newspaper any return made to them by any banking company which is duly registered under the provisions of the several acts specified in the third schedule, or any of them. II. Eelating to Scotland exclusively. Preamble. From and after loth May, 17G6, no notes to be Bank Notes iMyable on Demand. 5 Geo. 3, c. 49 (a.d. 1765). An Act to prevent the Inconveniences arising from the present Method of issuing Notes and Bills by the Banks, Banking Companies and Bankers, in that part of Great Britain called Scotland {a). Wheeeas a practice has prevailed in that part of Great Britain called Scotland of issuing notes commonly called bank notes, for sums of money payable to the bearer on demand, or, in the option of the issuer or granter, j)ayable at the end of six months with a sum equal to the legal interest from the demand to that time : and whereas notes, with such option as aforesaid, have been and are circulated in that part of the United Kingdom to a great extent, and do pass from hand to hand as specie, whereby great inconveniences have arisen: for remedy whereof be it enacted, &c., that from and after the 15th day of May, 1766, it shall not be lawful for any person or persons whatsoever, bodies politic or corporate, ( fl 0) o g 2"^ a Q. P3-3 O o S" w ,/ o -si (5^ 3 1 a to ■5 9 60 CIS a; 4) 0) • Site "s: bcEP ere) .fe' o s. ;= I]^ >> 3 --^ o =r:J rg O C3 =^ J^ cl (U 0) o '2 (5 "3 ** ~ -fcl 5 o d "Slg tCa, ^ a o * ^ 8'"' ^2 Ml3p 2^ ^ to ^.3 fs-^a g.a OS 0) 0) -' -a.,-, o o .a-e ^1 a o Mea O - H ^ a) " o OJ >. M P, t< O^ OJ 1 1 8 & 9 Vict. c. 38. 687 shall, at the end of the first period of four ^veelis after the taxes to make said 6th day of December, 1845, and so at the end of each a montlily successive period of four weeks, make out a general return in ^^ ^"^• the form to this act annexed marked (B.) (a) of the monthly average amount of bank notes in circulation of each banker in Scotland during the last preceding four weeks, and of the average amount of all the gold and silver coin held by such banker, and certifying under the hand of any officer of the said commissioners duly authorized for that purpose, in the case of each such banker, whether such banker has held the amount of coin required by law during the period to which the said return shall apply, and shall publish the same in the next succeeding London Gazette in which the same can be conveniently inserted. 10. That for the purpose of ascertaining the monthly average Mode of _ amount of bank notes of each banker in circulation, the aggre- J^^^'J^'^^g^^f gate of the amount of bank notes of each such banker in circu- ^^^^^^^ ^f lation at the close of the business on Saturday of each week ^ank notes of during the first complete period of four weeks next after the each banker 6th day of December, 1845, shall be divided by the number in circulation, of weeks, and the average so ascertained shall be deemed ^^^^1° Jye"""' to be the average of bank notes of each such bank in circula- ^^.^^ f"^^, tion during such period of four weeks, and so in each successive weeks after period of four weeks ; and the monthly average amount of gold 3ist Decem- and silver coin respectively held as aforesaid by such banker ber, 184o. shall be ascertained in like manner from the amount of gold and silver coin held by such banker at the head ofiice or prin- cipal place of issue in Scotland of such banker at the close of business on Saturday in each week during the same period ; and the monthly average amount of bank notes of each such banker in circulation dm-ing any such period of fom- weeks is not to exceed a sum made up by adding the amount certified by the commissioners of stamps and taxes as aforesaid and the monthly average amount of gold and silver com held by such banker as aforesaid during the same period. 11. That in taking account of the coin held by any such In taking tlio banker as aforesaid, with respect to which bank notes to a account of further extent than the sum certified as aforesaid by the ^aSkcrs, silver commissioners of stamps and taxes may, under the provisions ^oin not to of this act, be made and issued, no amount of silver coin exceed the exceeding one fourth part of the gold coin held by such proportion of banker as aforesaid shaU be taken into account, nor shall any °^j/'''^*^^ ""* banker be authorized to make and issue bank notes in = Scotland, on any amount of silver coin held by such banker exceeding the proportion of one fourth part of the gold coin held by such banker as aforesaid. (d) See schedule, atite, p. C8G. 688 APPENDIX OF STATUTES (sCOTLANd). Commis- sioners of stamps and taxes em- powered to cause the books of bankers con- taining ac- counts of their l)ank notes in circulation, and of gold coin, to be in- spected. Penalty for refusing to allow such inspection. All bankers to return their names once a year to the btamp office. 12. And whereas in order to ensure the rendering of true and faithful accounts of the amount of hank notes in circula- tion, and the amount of gold and silver coin held by each banker, as directed by this act, it is necessary that the commissioners of stamps and taxes should be empowered to cause the books of bankers issuing such notes, and the gold and silver coin held by such bankers as aforesaid, to bo inspected as hereinafter mentioned: be it therefore enacted, that all and every the book and books of any banker who shall issue bank notes under the provisions of this act, in which shall be kejjt, contained or entered any account, minute or memorandum of or relating to the bank notes issued or to be issued by such banker, or of or relating to the amount of such notes in circulation from time to time, or of or relating to the gold and silver coin held by such banker from time to time, or any account, minute, or memorandum, the sight or inspection whereof may tend to secure the rendering of true accounts of the average amount of such notes in circulation and gold and silver coin held as directed by this act, or to test the truth of any such account, shall be open for the inspection and examination at all seasonable times of any officer of stamp duties authorized in that behalf by writing signed by the commissioners of stamps and taxes, or any two of them ; and every such officer shall be at liberty to take copies of or extracts from any such book or account as aforesaid, and to inspect and ascertain the amount of any gold or silver coin held by such banker; and if any banker or other person keeping any such book, or having the custody or possession thereof or power to produce the same, shall, upon demand made by any such officer showing (if required) his authority in that behalf, refuse to produce any such book to such officer for his inspection and examination, or to permit him to inspect and examine the same, or to take copies thereof or extracts therefrom, or of or from any such account, minute or memorandum as aforesaid, kept, contained or entered therein, or if any banker or other person having the custody or possession of any coin belonging to such banker shall refuse to permit or prevent the inspection of such gold and silver coin as aforesaid, every such banker or other person so offending shall for every such offence forfeit the sum of 100^.: provided always, that the said commissioners shall not exercise the powers aforesaid without the consent of the Commissioners of her Majesty's Treasury. 13. That every banker in Scotland who is now carrying on or shall hereafter carry on business as such, other than the Bank of Scotland, the Ixoyal Bank of Scotland, and the British Linen Company, shall, on tlie 1st day of January in each year, or within 15 days thereafter, make a return to the 8 & 9 Vict. c. 38. G89 commissioners of stamps and taxes, at their head office in London, of his name, residence and occupation, or, in the case of a company or partnership, of the name, residence and occupation of every person composing or being a member of such company or partnership, and also the name of the firm under which such banker, company or partnership carry on the business of banking, and of every place where such business is carried on ; and if any such banker, company or partnership shall omit or refuse to make such return within fifteen days after the said 1st day of January, or shall wilfully make other than a true return of the persons as herein required, every banker, company or partnership so offending shall forfeit or pay the sum of 50^. ; and the said com- missioners of stamps and taxes shall on or before the 1st day of March in every j^ear publish in some newspaper circulating within each town or county resj)ectively in which the head office or principal place of issue of any such banker be situated a copy of the return so made by every banker, company or partnership carrying on the business of bankers within such town or county respectively, as the case may be. 14. That if the monthly average circulation of bank notes Penalty on of any banker, taken in the manner herein directed, shall at banks issuing any time exceed the amount which such banker is authorized "^ excels. to issue and to have in circulation under the provisions of this act, such banker shall in everj^ such case forfeit a sum equal to the amount by which the average monthly circula- tion, taken as aforesaid, shall have exceeded the amount which such banker was authorized to issue and to have in circulation as aforesaid. 15. And whereas by 3 & 4 Will. 4, c. 98, s. 6, it was enacted, Bank of Eng- that from and after the 1st day of August, 1834, unless and land notes not until parliament should otherwise direct, a tender of a note a legal tender or notes of the Governor and Company of the Bank of England, expressed to be payable to bearer on demand, should be a legal tender to the amount expressed in such note or notes, and should be taken to be valid as a tender to such amount for all sums above 5/. on all occasions on which any tender of money may be legally made, so long as the Bank of England should continue to pay on demand their said notes in legal coin : provided always, that no such note or notes should be deemed a legal tender of payment by the Governor and Company of the Bank of England, or any branch bank of the said governor and company : and whereas doubts have arisen as to the extent of the said enactment, for removal whereof be it enacted and declared, that nothing in the said last recited act contained shall extend or be construed to extend to make the tender of a note or notes of the Governor and Company of the Bank of England a legal G. Y Y 690 APPENDIX OF STATUTES (sCOTLAND). Proviso. Notes for less than '20.S. not negotiaLle iu Scotland {a) . Notes of 2Qs. or above, and kss than oL, to be drawn iu certain form {a) . tender in Scotland: provided always, that nothing in this act contained shall be construed to prohibit the circulation in Scotland of the notes of the Governor and Company of the Bank of England as heretofore. 16. That all promissory or other notes, bills of exchange, or drafts, or undertakings in writing, being negotiable or trans- ferable, for the payment of any sum or sums of money, or any orders, notes, or undertakings in writing, being negotiable or transferable, for the delivery of any goods, specifying their value in money less than the sum of 205. in the whole, hereto- fore made or issued, or which shall hereafter be made or issued in Scotland, shall, from and after the 1st day of January, 1846, be and the same are hereby declared to be absolutely void and of no effect, any law, statute, usage, or custom to the contrary thereof in anywise notwithstanding; and that if any person or persons shall, after the 1st day of January, 1846, by any art, device, or means whatsoever, publish or utter in Scotland any such notes, bills, drafts, or engagements as aforesaid for a less sum than 20*., or on which less than the sum of 20*. shall be due, and which shall be in anywise negotiable or transferable, or shall negotiate or transfer the same in Scotland, every such person shall forfeit and pay for every such offence any sum not exceeding 201. nor less than 51., at the discretion of the justice of the peace who shall hear and determine such offence («). 17. That all promissory or other notes, bills of exchange, or drafts, or undertakings in writing, being negotiable or trans- ferable, for the payment of 20s., or any sum of money above that sum and less than 51., or on which 20*., or above that sum and less than 5^., shall remain undischarged, and which shall be issued within Scotland at any time after the 1st day of January, 1846, shall specify the names and places of abode of the persons respectively to whom or to whose order the same shall be made j)ayable, and shall bear date before or at the time of drawing or issuing thereof, and not on any day subsequent thereto, and shall be made payable within the space of 21 days next after the day of the date thereof, and shall not be transferable or negotiable after the time hereby limited for payment thereof, and that every indorsement to be made thereon shall be made before the expiration of that time, and to bear date at or not before the time of making thereof, and shall specify the name and place of abode of the person or persons to whom or to whose order the money con- tained in every such note, bill, draft, or undertaking is to be paid ; and that the signing of every such note, bill, draft, or («) The restrictions on issuing these notes are repealed or removed by 26 & 27 Vict. c. 10."), and 3G & 37 Vict. c. 7o, iintil the 28th July, 1874. 8 & 9 YicT. c. 38. 091 undertaking, and also of every such, indorsement, shall be attested by one subscribing Tvitness at tlie least ; and which said notes, bills of exchange, or drafts, or undertakings in writing, may be made or drawn in words to the purport or effect as set out in the schedules to this act annexed marked (C.) (b) and (D.) (c) ; and that all promissory or other notes, bills of exchange, or drafts, or undertakings in writing, being negotiable or transferable, for the payment of 20s., or any sum of money above that sum and less than 51., or on which 20s., or above that sum and less than 5^., shall remain undis- charged, and which shall be issued in Scotland at any time after the said 1st day of January, 184G, in any other manner than as aforesaid, and also every indorsement on any such note, bill, draft, or other undertaking to be negotiated under this act, other than as aforesaid, shall and the same are hereby declared to be absolutely void, any law, statute, usage, or custom to the contrary thereof in anywise notwithstanding : provided always, that nothing in this clause contained shall be construed to extend to any such bank notes as shall be lawfully issued by any banker in Scotland authorized by this act to continue the issue of bank notes. 18. That if any body politic or corporate or any person or Penalty for persons shall, from and after the said 1st day of January, persons other i^ , . . • • o ii 1 • than bankers 1846, make, sign, issue, or re-issue m Scotland any promissory Y^erchj autho- note payable on demand to the bearer thereof for any sum of rized, issuing money less than the sum of 51., except the bank notes of such notes payable bankers as are hereby authorized to continue to issue bank on demand for notes as aforesaid, then and in either of such cases every such ^^^^ *^^^ ^'• body politic or corporate or person or persons so making, signing, issuing, or re-issuing any such promissory note as (i) SCHEDTJLE (C.) [Flace'] idaijl [_month'] [l/ear}. Twenty-one days after date I promise to pay to A. B. of {pkee'], or his order, the sum of for value received by Witness, E. F. . C. D. And the endorsement, toties quoties. \_I)aij'] {jnontlt] [yt-a;-]. Pay the contents to G. H. of \_place'\, or his order. Witness, J. K. A. B. ((') Schedule (D.) \_I'lace] [day] [inonth:] [year']. Twenty-one days after date pay to A. B. of [p/('ff], or his order, the sum of value received, as advised by To E. F. of Iplace']. E. D. Witness, G. H. And the endorsement, toties quoties. [Dffy] [month'] [year]. Pay the contents to J. K. of [place], or his order. Witness, L. M. A. B. Y y2 692 Penalty for persons, other than bankers hereby autho- rized, titter in g- or negotiating notes, bills of exchange, &c., transfer- able, for pay- ment of 20a\ or less than bl. Not to pro- hibit checks on bankers. Mode of recovering penalties. APPENDIX OF STATUTES (sCOTLAND). aforesaid, except as aforesaid, shall for every sucli note so made, signed, issued or re-issued forfeit the sum of 20^. 19. That if any body politic or corporate or person or per- sons shall, from and after the passing of this act, pubhsh, utter, or negotiate in Scotland any promissory or other note (not being the bank note of a banker hereby authorized to continue to issue bank notes), or any bill of exchange, draft, or undertaking in writing, being negotiable or transferable, for the pajonent of 20*., or above that sum and less than bl., or on which 20s., or above that sum and less than bl., shall remain undischarged, made, drawn, or indorsed in any other manner than as is hereinbefore directed, every such body politic or corporate or person or persons so publishing, utter- in"-, or negotiating any such promissory or other note (not being such bank note as aforesaid), bill of exchange, draft, or undertaking in writing as aforesaid, shall forfeit and pay the sum of 20^. 20. Provided always, that nothing herein contained shall extend to prohibit any draft or order drawn by any person on his banker, or on any person acting as such banker, for the payment of money held by such banker or person to the use of the person by whom such draft or order shall be drawn. 21. That all pecuniary penalties under this act may be sued or prosecuted for and recovered for the use of her Majesty, in the name of her Majesty's advocate general or solicitor general in Scotland, or of the solicitor of stamps and taxes in Scotland, or of any person authorized to sue or prosecute for the same, by writing under the hands of the commissioners of stamps and taxes, or in the name of any ofhcer of stamp duties, by action of debt, bill, plaint, or information in the Court of Exchequer in Scotland, or, in respect of any penalty not ex- ceeding 20^., by information or complaint before one or more justice or justices of the peace in Scotland, in such and the same manner as any other penalties imposed by any of the laws now in force relating to the duties under the manage- ment of the commissioners of stamps ; and it shall be lawful in all cases for the commissioners of stamps and taxes, either before or after any proceedings commenced for recovery of any such penalty, to mitigate or compound any such penalty as the said commissioners shall think fit, and to stay any such proceedings after the same shall have been commenced, and whether judgment may have been obtained for such penalty or not, on pa_>anent of part only of any such penalty, with or without costs, or on payment only of the costs incurred in such proceedings, or of any part thereof, or on such other terms as sucli commissioners shall judge reasonable: provided always, that in no such proceeding aforesaid shall any essoign, protection, wager of law, nor more than one imparlance be 16 & 17 Vict. c. (j'S. 693 allowed ; and all pecuniary penalties imposed by or incurred under this act, by whom or in whoso name soever the same shall be sued or prosecuted for or recovered, shall go and be applied to the use of her Majesty, and shall be deemed to be and shall be accounted for as part of her Majesty's revenue arising from stamp duties, any thing in any act contained, or any law or usage, to the contrary in anywise notwithstanding: provided always, that it shall be lawful for the commissioners of stamps and taxes, at their discretion, to give all or any part of such penalties as rewards to any person or persons who shall have detected the offenders, or given information which may have led to their prosecution and conviction. 22. That the term "bank notes" used in this act shall Interpre- extend and apply to all bills or notes for the payment of t'^tion of act. money to the bearer on demand, other than bills and notes of the Governor and Company of the Bank of England; and that the term " banker" shall extend and apply to all corpo- rations, societies, partnerships, and persons, and every indi- vidual person carrying on the business of banking, whether by the issue of bank notes or otherwise ; and that the word " person" used in this act shall include corporations ; and that the word " coin" shall mean the coin of this realm ; and that the singular number in this act shall include the plural, and the plural number the singidar, except where there is any thing in the context repugnant to such construction ; and that the masculine gender in this act shall include the feminine, except where there is anything in the context repugnant to such construction. Composition for Stamp Duties 2)((!/nhle on Notes and Bills. 16 & 17 Vict. c. 63(a). An Act to repeal certain Stamp Duties, and to grant others in lieu thereof ; to give relief tvith respect to the Stamp Dttties 071 Neiosjyapers and Supplements thereto ; to repeal the Latu 071 Adrerfise7ne7its, and otherioise to a7ne7ul the Laivs re- lating to Stamp Duties. [4th August, 1853.] 7. And whereas, under and by virtue of certain acts of par- Power to trea- liament now in force, the Governor and Company of the Bank suiy to com- of Scotland, and the Eoyal Bank of Scotland, and the British V^^"^^ ^^ith Linen Company in Scotland, are respectively authorized and Sc°tr^\^ empowered to make and issue and re -issue their promissory the stamp notes payable to bearer on demand on unstamped paper, duties on their pro- missory notes. {a) 33 & 34 Vict. c. 99, s. 2, repeals the whole of this act except the above section 7. APPENDIX OF STATUTES (.SCOTLAND). giving security, and keeping and producing true accounts of all the notes so issued by them respectively, and accounting for and paj-ing the stamp duties payable in respect of such notes : and whereas it is expedient to authorize and empower the commissioners of her Majesty's treasury to compound with the said banks, as well as all bankers in Scotland, for the stamp duties on their promissory notes payable to bearer on demand as well as for stamps payable on their bills of exchange: it shall be lawful for the commissioners of her Majesty's treasury for the time being, or any three of them, and they are hereby authorized and empowered to compound and agree with the said Governor and Company of the Bank of Scotland, the Eoyal Bank of Scotland, and the British Linen Company in Scotland, and all or any other bankers in Scotland, or elsewhere, respectively, for a composition in lieu of the stamp duties payable on the promissory notes of the said banks and bankers respectively payable to the bearer on demand, as well as for stamps payable on their bills of ex- change ; and such composition shall be made on ^uch terms and conditions, and with such security for the payment of the same, and for keeping, producing, and rendering of such accounts, as the said last-mentioned commissioners may deem to be proper in that behalf ; and upon such composition being entered into by such banks and bankers respectively, it shall be lawful for them to issue and re-issue all notes and to draw all such bills for which such composition shall have been made upon unstamped paper, anything in any act contained to the contrary notwithstanding. Lien or Right of Retention over Shares in Joint Stock Banks, and signing Bills and Notes. 17 & 18 Vict. c. 73. An Act to amend the Acts for the Regulation of Joint Stock Banks in Scotland. [31st July, 1854.] "Whereas an act passed in the 8th year of the reign of her 7&8Vict. present Majesty, intituled "An Act to regidate joint stock c. 113. banks in England :" and whereas the said act was extended to Scotland and Ireland by an act passed in the 9th and 10th 9 & 10 Vict, years in the reign of her Majesty, intitided " An Act to regu- c. 75. late joint stock banks in Scotland and Ireland: " and whereas it is expedient that the recited acts should be amended in certain of the provisions thereof, in so far as the same apply to Scotland : be it enacted, &c., as follows : 11) Vict. c. 3. 095 1. No clause directed by the said acts to be inserted in the Right of re- deed of partnership of any joint stock banking- company in tention or lien Scotland to be executed previous to such company being in- p^rJ'ifers not° corporated under the recited acts shall take away or impair ^.^ ^^^ affected, the right of retention or lien which, in virtue of the common law of Scotland, such company has or may be entitled to exercise over the shares of its partners, for or in respect of any debt or liability incurred or obligation undertaken by them to the company. 2. Provided, that as often as the company may, in virtue of The company their right of lien or retention acquire any shares in the coni- *« ^f^iJ-g^ii^^ pany's stock, they shall be bound to sell the same within six yj'i^Ji^e of months after the same shall have been so acquired, and in right of lien, such manner as is by the said first-recited act provided for the sale of forfeited shares : and the company shall bo bound to account to the party or parties interested in such shares, or to their creditors, or heirs, or executors, for the balance of the price or prices which may have been realized by su.ch sale, after paying the debt due to the company, and the expenses incurred by them in securing their debt and selling the shares. 3. In such deed of partnership there shall be inserted pro- Provision to visions reg'ulating the manner in which bills of exchange or he inadc as to ^ , ° p ,^ 1 1 ii„ siKnins? bills promissory notes of the company may be made, accepted or ^^^ ^^ °.„^_ indorsed, and it shall not be necessary that such bills of exchange or promissory notes be signed in the manner pre- scribed by the fii-st-recited act. Joint StocJi Banks Incorporafio)i hy Letters Patoit. 19 YicT. c. 3. An Act to extend the Period for ivhich her Majesty may yrant Letters Patent of hicorporation to Joint Stock Banks in Scotland existing before the Act of 1846. [7th March, 1846.] Wherpas, under the provisions of the act of the 9th and 10th years of her present Majesty, chapter 75 (whereby the act of the 7th and 8th years of her Majesty, chapter 113, was extended to joint stock banks in Scotland), her Majesty, with the advice of her privy council, is empowered to grant letters patent of incorporation to any company of more than six persons who were carrying on the business of bankers in Scotland on or before the 9th day of August, 1845, upon the terms and in manner in the said acts mentioned or referred to, but only for a term of years not exceeding 20 years : and C96 APPENDIX OF STATUTES (iRELAKd). Extending period for which her Majesty may- grant letters patent of in- corjDoration to certain joint stock banks in Scotland. whereas it is expedient that her Majesty should be em- powered in certain cases to grant such letters patent of incorporation for a longer period : now be it enacted, &:c., as follows : 1. That notwithstanding anything in the said acts con- tained, it shall be lawful for her Majesty to grant letters patent of incorporation under the said acts to any company of more than six ^lersons in Scotland who were carrying on the business of bankers before the said 9th day of August, 1845, either for a term of years or in perpetuity, but so that the same shall be liable to be dealt with by or under tlie pro- visions of any future acts of parliament in every respect as if this act had not been passed. III. Relating to Ireland exclusively. Composition for stamps on notes of Bank of Ireland. Cancellation of wiuseil Bank Notes. 55 Geo. 3, c. 100. An Act to inovide for the Collection and Management of Stamp Duties payable on Bills of Exchange, Promissory Notes, Receipts, and Game Certificates, in Ireland (a). [22nd June, 1815.] 19. And be it further enacted, that all bank notes and bank post bills, which shall be issued by the Governor and Com- pany of the Bank of Ireland, shall be exempt from the stamp duties which may from time to time be charged thereon respectively (unless otherwise expressly provided in the act or acts charging the same), from every 25th day of March for one whole year next following ; provided the governor and company of the said bank shall on the said 25th day of March respectively have paid into his Majesty's treasury in Ireland, such sum of money as shall have been from time to time agreed upon by and between the said governor and company, and the lord high treasurer of Ireland, or the commissioners for executing the office of lord high treasurer of Ireland, as a compensation for and to be in lieu of and in full satisfaction for all stamp duties payable wpou aU notes and bills to bo (a) By the TuhiDd Eovenue Repeal Act, 1870, (33 & 34 Vict. c. 99), the whole of the act is repealed except sections I'J and 20, which are hero printed. By one of the repealed sections, sect. 3, bankers issuing notes were bound to register the name of the firm and of the partners in the bank at the stamp office in Dublin. 1 & 2 Geo. 4, c. 72. GO: issued by tlie said bank during tbe year next ensuing respectively, and that any such composition heretofore made shall be in force according to the terms thereof, as if this act had not passed. 20. And be it further enacted, that although any bank or Cancelling banker's note or notes shall be signed or otherwise executed "ot^^ ami by any banker or bankers duly registered in manner herein- j.°°jgtJ^^ti before mentioned, or by his or thoir servant or servants, yet if bankers, the same shall remain in a book and be part of the leaves, or any one leaf thereof, and not cut or separated therefrom, then and in every such case if such note or notes remaining in such book shall be brought to the stamp office in Dublin, it shall and may be lawful to and for the said commissioners of stamps, or any of them, or any officer by them duly autho- rized, and they are hereby required to cancel the stamps thereon respectively, and to mark or stamp any vellum, parch- ment, or paper which shall be brought to the said office by the person or persons so bringing such note or notes with any marks or stamps which he or they may require, on such person or persons paying the difference or price (if any) between the stamps so cancelled, and the stamps or marks so required to be marked or stamped on the vellum, parchment, or paper so brought to the said stamp office. T/ic Banh of Ireland Restriction Act. 1 & 2 Geo. 4, c. 72. An Act to establish an Agreement icitli the Governor and Company of the Banh of Ireland for advancing the Sum o/" 500,000^. Irish Currency; and to empoiver the said Governor and Company to enlarge the Capital Stock or Fund of the said Bank to 3,000,000^. (a). [2nd July, 1821.] 6. And be it further enacted, that from and after the Persons in passing of this act, it shall and may be lawful for any number P'^^^^^'l^P''' of persons in Ireland, united or to be united in societies or n^iipg^fo^ partnerships, and residing and having their establishments or Dublin may houses of business at any place not less than 50 miles distant borrow any from Dublin, to borrow, owe, or take up any sum or sums of sum of money money on their bills or notes payable on demand, and to ^Qtes^^'a^.^ble {a) By the Statute Law Revision Act, 1873, (36 & 37 Vict. c. 91), sections 1, 2 and 8 are repealed ; the remaining sections, 3, 4 and 5, relating to the capital of the Bank of Ireland, and the receipt of its notes in payment of the public debt, are not printed. 698 APPENDIX OF STATUTES (iRELANd). on clcmand, without being liable to penalty. 21 & 22 Geo. 3 (I.). No other privilege to be granted to partner- ships. make and issue such notes or bills accordingly, payable on demand, at any place in Ireland exceeding the distance of 50 miles from Dublin, all the individuals composing such societies or copartnerships being liable and responsible for the due payment of such bills and notes ; and such persons shall not be subject or liable to any penalty for the making or issuing such bills or notes ; anything in an act made in the parliament of Ireland, holden in the 21st and 22nd years of the reign of his late Majesty King George the Third, intituled "An Act for establishing a bank by the name of the Grovernor and Company of the Bank of Ireland," to the contrary notwith- standing. 7. Provided always, that no further or other power, privi- lege, or authority shall, previous to the said 1st day of January, 1838, nor until after payment to the said governor and company of all sum and sums of money which now are or hereafter shall or may become due to them from government, be granted to any copartnership or society of persons what- soever, contrary to the laws now in force for establishing and regulating the bank of Ireland, save and except the power of enabling such societies and copartnerships as aforesaid, re- siding and carrying on their business not less than 50 miles from Dublin, to sue and be sued in the name of a public officer, should parliament hereafter think fit to grant such a power. 1 & 2 Geo. 4, c. 72. Societies of persons more than six in number may be bankers in Ireland at places 50 miles from The Bankinrj Cojmrtnerships Regulation Act. 6 Geo. 4, c. 42. An Act for the better Rec/ulcition of Copartnerships of certain Bankers in Ireland {a). [10th June, 1825.] 2. And whereas an act was passed in the session of parlia- ment holden in the 1st and 2nd years of his present Majesty's reign, intituled "An Act to establish an agreement with the Governor and Company of the Bank of Ireland, for advancing the sum of 500,000/. Irish currency ; and to empower the said governor and company to increase the capital stock or fund of the said bank to three millions," and it is expedient that the said last-recited act should be altered and amended, be it further enacted, that from and after the passing of this act, it shall and may be lawful for any number of persons, xmited or to be united in any society or co2)artucrship in Ireland, con- sisting of more than six in number, and not having the (rt) The Statute Law Revision Act, 1873, (3G & 37 Vict. c. 91), repeals sects. 1, 4 and 8. 6 Geo. 4, c. 42. 699 establishments or houses of business of such society or co- Dublin, aud partnership at any place or places less than 50 miles distant issue bills and from Dublin, to carry on the trade and business of bankers, ^°*j^^^g^^-^g^o. in like manner as copartnerships of bankers, consisting of not responsible. ° more than six in number, may lawfully do ; and to borrow, owe, or take up any sum or sums of money on their bills or notes, payable on demand, or at any time after date, or after sight, and to make and issue such notes or bills accord- ingly at any place in Ireland, exceeding the distance of 50 mUes from Dublin, all the individuals composing such societies or copartnerships being liable and responsible for the due pay- ment of all such bills and notes, in manner hereinafter provided ; anything contained in an act made in the parlia- Notwith- ment of Ireland, in the 21st and 22nd years of the reign of -Jf l,ro- "^^^JJ'J^ ^°*®^ missory notes under the provisions of this act^ it shall be ^^ J^g^. ^j^ lawful for the commissioners of stamps, or their officers, to demand, and cancel and allow as spoiled the stamp upon such certificate, to grant and in lieu thereof to grant to such banker or bankers a licence licences imder under the authority of this act ; and every such licence shall, ^^^^ f^erTof . during its continuance in force, also authorize the re-issumg of all promissory notes payable to the bearer on demand, which such banker or bankers may have previously issued on paper duly stamped, until the 24th day of March inclusive 712 APPENDIX OF STATUTES (iRELAXd). Bankers licensed under this act to issue all their promis- sory notes of payment of money to the bearer on demand on unstamped paper. Bankers issuing un- stamped notes to give se- curity by bond for the due performance of the con- ditions herein contained. then next following', proYided sucli notes may so long be lawfully re-issued. 6. Provided always, that if any banker or bankers who shall take out a licence under the authority of this act, shall issue under the authority either of this or any other act, any un- stamped promissory notes for payment of money to the bearer on demand, such banker or bankers shall, so long as he or the}' shall continue licensed as aforesaid, make and issue on unstamped paper all his or their promissory notes for pajmient of money to the bearer on demand, of whatever amount or value (not exceeding the sum of 100^.) such notes may be ; and it shall not be lawful for such banker or bankers, during the period aforesaid, to issue, for the first time, any such pro- missory note as aforesaid on stamped paper. 7. That before any licence shall be granted to any person or persons to issue any unstamped promissory notes imder the authority of this act, such person or persons shall give security by bond to his Majesty, his heirs and successors, with a con- dition that if such person or persons do and shall from time to time enter or cause to be entered, in a book or books to be kept for that purpose, an account of all such unstamped pro- missory notes as he or they shall so as aforesaid issue, specify- ing the amount or value thereof respectively, and the several dates of the issuing thereof, and in like manner also a similar account of all such promissory notes as, having been issued as aforesaid, shall have been cancelled, and the dates of the can- celling thereof ; and do and shall from time to time, when thereunto recjuested, produce and show such accounts to and permit the same to be examined and inspected by the said commissioners of stamps, or any officer of stamps appointed under the hands and seals of the said commissioners for that p)urpose ; and also do and shall deliver to the said commis- sioners of stamps half-yearly (that is to say), within 14 days after the 1st day of January and the 1st day of July in every year, a just and true account in writing, verified upon the oaths or afiirmations (which any justice of the peace is hereby empowered to administer), to the best of the knowledge and belief of such person or persons, and of his or their cashier, accountant or chief clerk, or of such of them as the said com- missioners shall require, of the amount or value of all im- stamped promissory notes issued under the provisions of this act in circulation, Avithiu the meaning of this act, on a given day, that is to say, on Saturday in every week, for the space of ]ialf-a-year prior to the half-yearly day immediately pre- ceding the delivery of such account, together with the average amount or value of such promissory notes so in circulation according to such account ; and also do and shall pay or cause to he 2>uid to the receiver yeneral of slamp duties in Ireland, or 9 Geo. 4, c. 80. 713 to some other jjerson duly authorized hij the commissioners of stamps to receive the same, as a composition for the duties tvhich u-ould otherwise have been payable for such promissory notes issued or in circulation during such half year, the sum of Is. 6d. for every 100/., and also for the fractional part oflOOl. of the said averaye amount or value of such notes in circidation, ac- cording to the true intent and meaning of this act ; and on due performance thereof such bond shall be void, but otherwise the same shall be and remain in full force and virtue (a). 8. That every unstamped promissory note issued under the For -what provisions of this act shall, for the purpose of pajTaent of P^"?^ ^g°*^^ duty, be deemed to be in circulation from the day of the issu- ^pg^^^^ ing to the day of the cancelling thereof, both clays inclusive, circulation, excepting nevertheless the period during -svhich such note shall be in the hands of the banker or bankers who first issued the same, or by whom the same shall be expressed to be payable, or, in case of copartnerships of more than six persons, which shall be in the hands of the public officers of such copartnership. 9. That in every bond to be given pursuant to the directions Eegulations of this act, the person or persons intending to issue any such F^^-'^P,^^^"^ *^® unstamped promissory notes as aforesaid, or such and so many ^?^^^ °^ of the said persons as the commissioners of stamps, or their ^y^n^^i to this proper officer in that behalf, shall require, shall be the act. obligors ; and every such bond shall be taken in the sum of 100/., or in such larger sums as the said commissioners of stamps, or such officer as aforesaid, may judge to be the probable amount of the composition or duties that will be payable from such person or persons under or by virtue of this act during the period of one year ; and it shall be lawful for the said commissioners, or such officer as aforesaid, to fix the time or times of payment of the said composition or duties, and to specify the same in the condition to every such bond ; and every such bond may be recj^uired to be renewed from time to time, at the discretion of the said commissioners, or of such officer as aforesaid, and as often as the same shall be forfeited, or the parties to the same, or any of them, shall die, become bankrupt or insolvent, or reside in parts beyond the seas. 10. That if any alteration shall be made in any copartner- Fresh bonds ship of persons who shall have given any such security by to be given on bond as by this act is directed, whether such alteration shall ^"^^^4^°°! be caused by the death or retirement of one or more of the g^ips. partners of the firm, or by the accession of any additional or new partner or partners, a fresh bond shall, within one calendar month after any such alteration, be given by the re- («) By a & 6 Vict. c. 82, s. 1, this composition duty is repealed. 714 APPENDIX OF STATUTES (iRELAND). Penalty on bankers re- fusing to renew their bonds. This act not to exempt from penalties any persons issuing un- stamped notes not in ac- cordance herewith. Penalties how and by whom to be re- covered. Not to affect the privileges of the Bank of Ireland. maining partner or partners, or tlie persons composing the new copartnersHi), as the case may be, which bond shall be taken as a security for the duties which may be due and owing, or may become due and owing in respect of the un- stamped promissory notes which shall have been issued by the persons composing the old copartnership, and which shall be in circulation at the time of such alteration, as well as for duties which shall or may be or become due or owing in respect of the imstamped promissory notes issued or to be issued by the persons composing the new copartnership ; pro- vided that no such fresh bond shall be rendered necessary by any such alteration as aforesaid in any copartnership of per- sons exceeding six in number, but that the bonds to be given by such last-mentioned copartnerships shall be taken as se- curities for all the duties they may incur so long as they shall exist, or the persons composing the same or any of them shall carry on business in copartnership together, or with any other person or persons, notwithstanding any alteration in such copartnership ; saving always the power of the said commissioners of stamps to rec^uire a new bond in any case where they shall deem it necessary for better securing the payment of the said duties. 11. That if any person or persons, who shall have given security by bond to his Majesty in the manner hereinbefore directed, shall refuse or neglect, for the space of one calendar month, to renew such bond when forfeited, and as often as the same is by this act required to be renewed, such person or persons so offending shall for every such offence forfeit and pay the sum of 100^. 12. Provided always, that nothing in this act contained shall extend or be construed to extend to exempt or relieve, from the forfeitures or penalties imposed by any act or acts now in force upon persons issuing promissory notes not duly stamped as the law requires, any person or persons who, under any colour or pretence whatsoever, shall issue any unstamped pro- missory note, unless such person or persons shall bo duly licensed to issue such promissory note under the provisions of this act, and such note shall be drawn and issued in strict accordance with the regulations and restrictions herein con- tained. 13. That all pecuniary forfeitures and penalties which may be incurred under any of the provisions of this act, shall bo recovered for use of his Majesty, his heirs and successors, in any of his Majesty's courts of record, by action of debt, bill, plaint, or information, in the name of his Majesty's attorney or solicitor-general in Ireland. 14. Provided always, that nothing in this act contained shall extend or be construed to extend to prejudice, alter, or 9 GrEo. 4, c. 80. 715 affect any of the rights, po^vers, or privileges of the Governor and Company of the Bank of Ireland. 15. [Commissioners of stamps to cancel re-issuable pro- missory note stamps rendered unnecessary by the act, and to repay the amount, if application made within six calendar months after passing of the act ; section exhausted or expired.] 16. And whereas by an act passed in the 6th year of the 6Geo. 4, c. 42. reign of his present Majestj^, intituled " An Act for the better No society or regulation of copartnerships of certain bankers in Ireland," copartnership any certificate granted by the commissioners of stamps in g|j°|^^|f^'^ Ireland, to any society or copartnership of bankers in Ireland obliged to exceeding six in number, of the registry of the firm and name take out of such society, is liable to the stamp duty payable by law on more than certificates to be taken out yearly by any banker or bankers in J^J^g^^^J^ Ireland, that is to say, a stamp duty of 30^. : and whereas it ^^^^^^ ^ °^^ is provided by the said recited act, that a separate and distinct certificate, with a separate and distinct stamp, shall be granted for and in respect of every town or place where any such bills or notes as in the said act are mentioned shall be issued^ by any such society or copartnership : and whereas it is expedient that no such society or copartnership should be recjuired to take out more than four certificates in any one year, although it should issue such bills or notes as aforesaid at more than four towns or places in Ireland ; be it therefore further enacted, that no society or copartnership of bankers in Ireland exceeding six in number, and carrying on the trade or busi- ness of bankers under the authority of the said recited act, shall be obliged to take out more than four certificates in any one year of the entry and registry of the firm or name of such society or copartnership ; and in case any such society or co- partnership shall issue such bills or notes as _ aforesaid, by themselves or their agents, at more than fonr dift'erent towns or i)laces in Ireland, then after taking out three distinct cer- tificates for three of such towns or places, such society or co- partnership shall be entitled to have all the remainder of such towns or places included in a fourth certificate ; anything in the said act of the sixth year of the reign of his present Majestv to the contrary notwithstanding. 17. That every certificate which hath been or shall at any Certificates to time hereafter be taken out by any such last-mentioned continue in society or copartnership as aforesaid, shall continue in force, JjJ^^^jJ**'^^^" for the issuing of such bills and notes as aforesaid at the J^e^h r^gisSy. town or place or the several towns or places therein named, until the 2.5th day of March next following the date of such certificate, notwithstanding any fresh entry or registry of the name or firm of such society or copartnership ; and that if any fresh entry or registry shall be made from any cause whatever, after any such society or copartnership shall have taken out 716 APPENDIX OF STATUTES (iRELANd). four sucli distinct certificates as aforesaid, sucli society or co- partnersliip shall not be required to take out any further cer- tificate, in respect of any town or place not included in any of such fom' certificates, until the 24th day of March next following such fresh entry or registry. No banker in Ireland to issue notes which shall not express to be payable at the place where issued. Notes issued contrary hereto shall be valid against the party issuinpr; who shall also be liable iu double the amount. Bank Notes payable n-Jicre iissiied. 9 Geo. 4, c. 81. An Act for making Promissory Notes 2oayablc, issued by Banks, Banking Companies, or Bankers, in Ireland, at the Places ivhere they are issued. [2oth July, 1828.] Whereas divers banks, banking companies, and bankers, in Ireland, have made and issued promissory notes, without making the same payable in coin of the realm at the several places respectively where such notes have been issued or re- issued : and whereas it is expedient that in future all such promissory notes, and all bank post bills issued by such banks, banking companies, or bankers, shoidd be made payable at the places where the same shall be issued or re-issued ; be it therefore enacted, &c., that from and after the 1st day of Ajpril, 1829, no bank, banking company, or banker, in Ireland, shall, by themselves, or by any agent or agents, partner or partners, or other person or persons whomsoever on their or his behalf, or on their or his account, make, issue, or re-issue, in any place in Ireland where such bank, banking company, or banker shall have any house or establishment for business, or any authorized resident agent or agents, any promissory note or bank post bill of any denomination whatsoever, being or purporting to be the note or notes, bank post bill or bank post bills of the bank, banking company, or banker, making, issuing, or re-issuing the same, Avhich shall not be payable at the places respectively where the same shall be made, issued, or re-issued by or on behalf of such bank, banking company, or banker ; and in every such note the place where the same shall have been issued or re-issued shall be expressly men- tioned : lu-ovided nevertheless, that if any such promissory note or bank post bill shall be issued or re-issued contrary to the provisions of this act, the same shall nevertheless not only be valid against the bank, banking company, or banker issuing or re-issuing the same by any of the wa3-s or means aforesaid, but such bank, banking company, or banker, shall be liable and bound to pay, in the lawful coin of the realm, double the amount of the sum specified in each such note or bank post bill (to bo sued for and recovered by the holder 11 Geo. 4 & 1 Will. 4, c. 32. 717 thereof in any of his Majesty's coui'ts for tlie recovery of debts in Ireland, by action of debt, bill, plaint, or infor- mation), either at the place -where the same shall have been issued or re-issued by or on behalf of such bank, banking company, or banker, or at any other place where such bank, banking company, or banker shall have any house or esta- blishment for business, notwithstanding such note or bank post bill shall not be expressed to be so payable, or shall be or expressed to be otherwise jiayable : provided always, that Not to prevent nothing herein contained shall extend to prevent any such "ot «'>^'-\ P- 726. 728 APPENDIX OF STATUTES (iRELANu). Oatlis to be taken by directors, &c. of the Bank of Irclaud. Bankers claiming to be entitled to issue bank notes to give notice to com- missioners of stamps and taxes. Commission- ers to certify c.xi.stiDgbauks of issue and limitation of issue. 4 & 5 Vict. c. uO. Governor and Company of the Bank of England as here- tofore. 7. That from and after the passing of this act it shall not be necessary for any governor, deputy governor, or director of the said bank, before acting in the said several offices or trusts, to make and subscribe the declaration pursuant to the act of parliament passed in the kingdom of Ireland, intituled "An Act to prevent the further growth of poper}'," nor to take any- other oaths than the oath of allegiance, the oath of qualifica- tion by possession of stock and the oath of fidelity to the cor- poration prescribed in and by the charter of incorporation of the governor and company of the said bank, and that it shall not be necessary for any member of the said corporation, before voting in any general court, to make and subscribe the afore- said declaration, nor to take any other oaths than the oaths of allegiance, the oath of qualification by the possession of stock, and the oath of fidelity to the said corporation provided in the said charter of incorporation : provided always, that in case any of the persons called Quakers shall at any time be chosen governor, deputy governor, or director, or shall be or become a member of the said corporation, it shall be sufficient for such person or persons to make his or their solemn affirmation, to the purport and effect of the oaths prescribed by the said charter and by this act to be taken by governors, deputy governors, directors, or members respectively of the said corporation. 8. That every banker claiming to be entitled to issue bank notes in Ireland shall, within one month next after the passing of this act, give notice in writing to the commissioners of stamps and taxes, at their head office in London, of such claim, and of the place and name and firm at and under which such banker has issued such notes in Ireland during the year next preceding the 1st day of May, 1845, and thereupon the said commissioners shall ascertain if such banker was on the 6th day of May, 1844, and from thence up to the 1st day of May, 1845, carrj-iug on the business of a banker, and lawfully issuing his own bank notes in Ireland, and if it shall so appear, then the said commissioners shall proceed to ascertain the average amount of the bank notes of such banker which were in circulation during the said period of one j'ear preceding the 1st day of May, 1845, according to the returns made by such banker in piu'suance of the act passed in the 4th and 5th years of the reign of her present Majesty, intituled "An Act to make further provisions relative to the returns to be made by banks of the amount of their notes in circulation," and the said commissioners, or any two of them, shall certify under their hands to such banker the average amount, when so ascer- tained as aforesaid, omitting the fractions of a pound, if any; and it shall be laAvf ul for every such banker to continue to 8 & 9 Vict. c. 37. 729 issue liis own bank notes after the 6th day of December, 1845, to the extent of the amount so certified, and of the amount of the gokl and silver coin held by such banker, in the proportion and manner hereinafter mentioned, but not to any further extent ; and from and after the 6th day of Prohibiting December, 1845, it shall not be lawfid for any banker to issue by un- make or issue bank notes in Ireland, save and except only ccrtmed such bankers as shall have obtained such certificate from the commissioners of stamps and taxes. 9. Provided always, that if it shall bo made to appear to Trovision for the commissioners of stamps and taxes that any two or more united banks, banks have, by written contract or agreement (which con- tract or agreement shall be produced to the said commis- sioners), become united withiu the year next preceding such 1st day of May, 1845, it shall be lawful for the said commis- sioners to ascertain the average amount of the notes of each such bank in the manner hereinbefore directed, and to certify a sum ecpial to the average amount of the notes of the two or more banks so united as the amount which the united bank shall thereafter be authorized to issue, subject to the regvda- tions of this act. 10. That the commissioners of stamps and taxes shall, at Duplicate of the time of certifying to any banker such particulars as they certificate to are hereinbefore required to certify, also piiblish a duplicate ^^ published of their certificate thereof in the next succeeding Dublin Q^zette Gazette in which the same may be conveniently inserted ; and p ++ + r the gazette in which such publication shall be made shall be gyi^ence conclusive evidence in all courts whatsoever of the amount of bank notes which the banker named in such certificate or duplicate is by law authorized to issue and to have in circula- tion as aforesaid, exclusive of an amount equal to the monthly average amount of the gold and silver coin held by such banker as herein provided. 11. That in case it sliall be made to appear to the commis- In case banks sioners of stamps and taxes at any time hereafter that any become two or more banks have, by -written contract or agreement "°it'^'i> ^om- (which contract or agreement shall be produced to the said ^rtifv^the '^ commissioners), become united subsequently to the passing amount of of this act, it shall be lawful to the said commissioners, upon bank notes the application of such luiited bank, to certify, in manner "^^'luch each hereinbefore mentioned, the aggregate of the amount of bank °, ^^^^, , notes which such separate banks were previously authorized issue, to issue under the separate certificates previously delivered to them, and so from time to time ; and every such certificate shall be published in manner hereinbefore directed ; and from and after such publication the amount therein stated shall be and be deemed to be the limit of the amount of bank notes which such united bank may have in circulation, exclusive of 730 APPENDIX OF STATUTES (iRELANd). Banks entitled to the privilege of issuing notes may relinquish the same: but not resiune the issue. Limitation of bank notes in circulation. Issue of notes for frac'tional parts of a pound i)ro- hibited. Issuing banks to render accounts weekly. an amount equal to tlie montlily average amount of the gold and silver coin held b}' such banker as herein provided. 12. That it shall be lawful for any banker in Ireland who under the provisions of this act is entitled to issue bank notes to contract and agree with the Grovernor and Company of the Bank of Ireland, by an agreement in writing, for the relin- quishment of the privilege of issuing such notes in favour of the said governor and company, and in each such case a copy of such agreement shall be transmitted to the commissioners of stamps and taxes ; and the said commissioners shall there- upon certify, in manner hereinbefore mentioned, the aggre- gate of the amount of bank notes which the Bank of Ireland and the banker with whom such agreement shall have been made were previously authorized to issue under the sepa- rate certificates j)reviously delivered to them ; and every such certificate shall be published in manner hereinbefore directed ; and from and after such publication the amount therein stated shall be the limit of the amount of bank notes which the Governor and Company of the Bank of Ireland may have in circulation, exclusive of an amount equal to the amount of the gold and silver coin held by the Bank of Ireland as hertnn provided. 13. That it shall not be lawful for any banker who shall have so agreed to relinquish the privilege of issuing bank notes at any time thereafter to issue any such notes. 14. That from and after the 6th day of December, 1845, it shall not be lawful for any banker in Ireland to have in cir- culation, upon the average of a period of four weeks, to be ascertained as hereinafter mentioned, a greater amount of notes than an amount composed of the sums certified by the commissioners of stamps and taxes as aforesaid, and the monthly average amount of gold and silver coin held by such banker during the same period of four weeks, to be ascer- tained in manner hereinafter mentioned. 15. That all bank notes to be issued or re-issued in Ireland after the Gth day of December, 1845, shall be expressed to be for payment of a sum in pounds sterling, without any fractional parts of a pound ; and if any banker in Ireland shall from and after that day make, sign, issue, or re-issue any bank note for the fractional part of a pound sterling, or for any sum together with the fractional part of a pound sterling, every such banker so making, signing, issiung, or re-issuing, any such note as aforesaid shall for each note so made, signed, issued, or re-issued forfeit or pay the sum of 201. 16. Tliat every banker Avho after the 6th day of December, 1845, shall issue bank notes in Ireland shall, on some one day in every week after the 13th day of December, 1845 (such day 8 & 9 Vict. c. 37. 731 to be fixed by tlie couimissiouers of stamps aud taxes), transmit to the said commissioners a just and true account of the amount of bank notes of such banker in circulation at the close of the business on the next preceding- Saturday, distinguishing the notes of ol. and upwards, and the notes below bl., and also an account of the total amount of gold and silver coin held by such banker at each of the head offices or principal places of issue in Ireland of such banker at the close of business on each day of the week ending on that Saturday, and also an account of the total amount of gold and silver coin in Ireland held by such banker at the close of business on that day ; and on completing the first period of four weeks, and so on completing each successive period of four weeks, every such banker shall annex to such account the average amount of bank notes of such banker in circulation diu-ing the said four weeks, distinguishing the bank notes of 5^. and upwards, and the notes below bl., and the average amount of gold and silver coin respectively held by such banker at each of the head offices or principal places of issue in Ireland of such banker during the said four weeks, and also the amovmt of bank notes which such such banker is, by the certificate published as aforesaid, authorized to issue under the provisions of this act; and every such account shall be verified by the signature of such banker or his chief cashier, or in the case of a company or partnership by the signature of the chief cashier or other officer duly authorized by the directors of such company' or partnership, and shall be made in the form to this act annexed marked (A.) («) : and if any such banker shall neglect or refuse to render any such account in the form and at the time required by this act, or shall at any time render a false account, such banker shall forfeit the sum of 100/. for every such offence. 17. That all bank notes shall be deemed to be in circulation What shall be from the time the same shall have been issued by any banker, ^eemcd to be or any servant or agent of such banker, until the same shall circulatioii ^^ have been actually returned to such banker, or some servant or agent of such banker. 18. That from the returns so made by each banker to the Commission- commissioners of stamps and taxes the said commissioners ^^^ of stamps shall, at the end of the first period of four weeks after the monthlv said 6th day of December, 1845, and so at the end of each return. successive period of four weeks, make out a general return in the form to this act annexed marked (B.) {b) of the monthly average amount of bank notes in circulation of each banker in Ireland during the last preceding four weeks, and of the («) See note (a), post, p. 732. {h) Sec note {h), post, p. 733. 733 APPENDIX OF STATUTES (iRELAND). average amount of all tho gold and silver coin held by such banker during the same period, and certifying, under the band of any officer of the said commissioners duly authorized for that purpose in the case of each such banker, whether siich banker has held the amount of coin required by law during the period to which the said return shall apply, and shall publish the same in the next succeeding Dublin Gazette in which the same can be conveniently inserted. [a] SCHED-ULE (A.) Name and title set forth in licence Name of the firm Head offices or principal places of issue Amount of notes in circulation on \ £5 and ujjwards .... £ Saturday, the day of . ) Under £5 £ Total £ Bank. Firm. Place. Amount of gold and silver coin held at the head office or principal place of issue at the close of business on — Head Office at Head Office at Head Office at Head Office at Gold Silver Gold SUver Gold Silver Gold Silver Monday the Tuesday the "Wednesday the Thursday the Friday the Saturday the Total amount of coin held at the close of business on Saturday, the day of 18 . Gold £ Silver _£ Total £ \_To be inserted in the aecount at the end of each period of four u-ccksA Amoimt of notes authorized by certificate £ Average amount of notes in circulation \ £5 and upwards £ dui'ing the four weeks ending as above j Under £5 .... £ Average amoimt of coin held during the said ) Gold .... £ four weeks j Silver .... £ Total £ I being the [banker, chief cashier, director or partner, an the case may he\ do hereby certify, that the above is a true account of the notes in circulation, and of the coin held by the said bank, as required under the act 8 & 9 Vict. c. Signed Dated this day of 18 . 8 & 9 Vict. c. 37. 733 19. That for the purpose of ascertaining the monthly average amount of bank notes of each banker in circulation, the aggregate of the amount of bank notes of each such banker in circulation at the close of the business on the Saturday in each week during the first complete period of four -weeks next after the 6th day of December, 1845, shall be divided by the number of weeks, and the average so ascer- tained shall be deemed to be the average of bank notes of each such banker in circulation during such period of four weeks, and so in each successive period of four weeks ; and the monthly average amount of gold and silver coin respec- tively held as aforesaid by such banker shall be ascertained in like manner from the amount of gold and silver coin held by such banker at the head offices or principal places of issue of such banker in Ireland, as after mentioned, at the close of business on such day in each week ; and the monthly average amount of bank notes of each such banker in circula- tion during any such period of four weeks is not to exceed a sum made up by adding the amount certified by the com- missioners of stamps and taxes as aforesaid and the monthly average amount of gold and silver coin held by such banker as aforesaid during the same period. 20. That in taking account of the coin held by any banker in Ireland with respect to which bank notes to a further extent than the sum certified as aforesaid by the commis- sioners of stamps and taxes may, under the provisions of this act, be made and issued, there shall be included only the gold Mode of as- cei'tainiug" the average amount of bank notes of each banker in circulation, and gold coin, during the first four weeks after the 6th day of December, 18i5. Wliat shall be taken in the account of coin held by any banker. (b) Schedule (B.) Name and Title, as set forth in the Licence. Name of tlie rii'm. Head Office, or principal Place of Issue. Circula- tion au- thorized by Cei-ti- flcate. Average Circulation during Four Weeks ending the Average Amormt of Coin held during' Four Weeks ending- 1^" 3 is . 3 ^ 5 w I hereby certify, that each of the bankers named in the above return who have in circulation an amount of notes beyond that authorized iu theii- certificate [with the exception of A. B. or C. D., as the case may be,"] have held an amount of gold and silver coin not less than that which they are required to hold during the period to which this retuni relates. (Signed) Officer of Stamp Duties. Dated this day of 18 . 734 APPENDIX OF STATUTES (iRELAND). Silver coin not to exceed the proportion of one quarter of ffold. Commission- ers of stamps and taxes em- powered to cause the books of bankers, con- taining ac- counts of their bank notes in cir- culation, and of gold coin, to be in- spected. Penalty for refusing to allow such inspection. and silver coin lield by such, banker at the several head offices or principal places of issue in Ireland of such banker, such head offices or principal places of issue not exceeding four in number, of "which not more than two shall be situated in the same pro- vince ; and every banker shall give notice in writing to the said commissioners, on or before the 6th day of December next, of such head offices or principal places of issue at which the account of gold and silver coin held by him is to be taken as aforesaid ; and no amount of silver coin exceeding one fourth part of the gold coin held by such banker as aforesaid shall be taken into account, nor shall any banker be authorized to make and issue bank notes in Ireland on any amount of silver coin held by such banker exceeding the proportion of one fourth iiart of the gold coin held by such banker as aforesaid. 21. And whereas in order to ensure the rendering of true and faithful accounts of the amount of bank notes in circula- tion, and the amount of gold and silver coin held by each banker, as directed by this act, it is necessary that the com- missioners of stamps and taxes should be empowered to cause the books of bankers issuing such notes, and the amount of gold and silver coin held by such bankers as aforesaid, to be inspected as hereinafter mentioned ; be it therefore enacted, that all and every the book and books of any banker who shall issue bank notes under the provisions of this act, in which shall be kept, contained, or entered any accoixnt, minute, or memorandum of or relating to the bank notes issued or to be issued by such bank, of or relating to the amount of such notes in eii'culation from time to time, or of or relating to the gold or silver coin held by such banker from time to time, or any account, minute, or memorandum the sight or inspection whereof may tend to secure the rendering of true accounts of the average amount of such notes in cir- culation and gold or silver coin held as directed by this act, or to test the truth of any such account, shall be open for the inspection and examination at all seasonable times of any officer of stamp duties authorized in that behalf by writing signed by the commissioners of stamps and taxes, or any two of them ; and every such officer shall be at liberty to take copies of or extracts from any such book or account as afore- said, and to inspect and ascertain the amount of any gold or silver coin held by such banker ; and if any banker or other person keeping any such book, or having the custody or j^os- session thereof or power to produce the same, shall, upon demand made by any such officer showing (if required) his authority in that behalf, refuse to produce any such book to such officer for his inspection and exaiiiination, or to permit him to inspect and examine the same, or to take copies thereof or extracts thorofroni, or of or fi-om any sucli accoimt. 8 & 9 Vict. c. 37. 735 minute or memorandum as aforesaid, kept, contained, or entered therein, or if any banker or other person having the custody or possession of any coin belonging to such banker shall refuse to permit or prevent the inspection of such gold and silver coin as aforesaid, every such banker or other person so offending shall for every such offence forfeit the sum of 100^. : provided always, that the said commissioners shall not exercise the powers aforesaid without the consent of the commissioners of her Majesty's treasury. 22. That every banker in Ireland, other than the Bank of All bankers Ireland, who is now carrying on or shall hereafter carry on to return their l)usiness as such, shall, on the first day of January in each ^^™cs once a year, or within 15 days thereafter, make a return to the com- \^^^-^,-, q^^^q missioners of stamps and taxes, at their office in Dublin, of ' his name, residence, and occupation, or, in the case of a company or partnership, of the name, residence, and occupa- tion of every person composing or being a member of such company or partnership, and also the name of the firm under which such banker, company, or partnership carrying on the business of banking, and of every place where such business is carried on ; and if any such banker shall omit or refuse to make such return within 15 days after the said 1st day of January, or shall wilfully make other than a true return of the persons as herein required, every banker so offending shall forfeit or pay the sum of 50^. ; and the said commis- sioners of stamps and taxes shall on or before the 1st day of March in every year publish in the Dublin Gazette a copy of the return so made by every banker. 23. That if the flionthly average circulation of bank notes Penalty on of any banker, taken in the manner herein directed, shall at banks issuing any time exceed the amount which such banker is authorized i^ excess. to issue and to have in circulation under the provisions of this act, such banker shall in every such case forfeit a sum equal to the amount by which the average monthly circulation, taken as aforesaid, shall have exceeded the amount which such banker was authorized to issue and to have in circula- tion as aforesaid. 24. That all promissory or other notes, bills of exchange, Notes for less or drafts, or undertakings in writing, being negotiable or than 20s. not transferable, for the payment of any sum or sums of money, negotiable in or any orders, notes, or undertakings in writing, being nego- ■'■^^^^'i^' tiable or transferable, for the delivery of any goods, sjiecifying their value in money less than the sum of 20s. in the whole, heretofore made or issued, or which shall hereafter be made or issued in Ireland, shall, from and after the 1st day of January, 1846, be and the same are hereby declared to be absolutely void and of no efl'eet, any law, statute, usage, or custom to the conti'ar}^ thereof in anywise notwitlistanding ; 736 APPENDIX OF STATUTES (IRELAND.) Notes for 20s. and above, and le.ss than M., to Le drawn in certain foi-m ((•). find that if any person or persons sliall, after the 1st day of January, 184G, by any art, device, or means whatsoever, publish or utter in Ireland any such notes, bills, drafts, or engagements as aforesaid, for a less sum than 20s., or on ■which less than a sum of 20s. shall be due, and which shall be in anywise negotiable or transferable, or shall negotiate or transfer the same in Ireland, every such person shall forfeit and pay for every such offence any sum not exceeding 20/. nor less than 5/., at the discretion of the justice of the peace who shall hear and determine such offence. 25. That all promissory or other notes, bills of exchange, or drafts, or undertakings in writing, being negotiable or transferable, for the payment of 20s., or any sum of money above that sum and less than 5/.. or on which 20s., or above that sum and less than 5Z., shall remain undischarged, and which shall be issued within Ireland at any time after the 1st day of Januaiy, 1846, shall specify the names and places of abode of the persons respectively to whom or to whose order the same shall be made payable, and shall bear date before or at the time of drawing or issuing thereof, and not on any day subsequent thereto, and shall be made payable within the space of 21 days next after the date thereof, and shall not be transferable or negotiable after the time hereby limited for pajmient thereof, and that every indorsement to be made thereon shall be made before the expiration of that time, and to bear date at or not before the time of mating thereof, and shall specify the name and place of abode of the person or persons to whom or to whose order the money contained in every such note, bill, draft, or undertaking is to be paid ; and that the signing of every such note, bill, draft, or imdertaking, and also of every such indorsement, shall be attested by one subscribing witness at the least ; and which said notes, bills of exchange, or drafts, or undertakings in writing, may be made or drawn in words to the purport or effect as set out in the .schedules to this act annexed marked (D.) («) and(E.) (h)\ and that all promissory or other notes, bills of exchange, or drafts, or undertakings in writing being negotiable or transferable, for the payment of 20s., or any sum of money (ff) Schedule (D.). [^Place] [_day'\ {jnontW] [yeny'\ Twonty-one days after date I promise to pay to A. B. of [_placc], or his order, the sum of for value received by Witness, E. F. C. D. A)ul the Indurscmcnt, toties quoties. [Drt//] \jiwn(h'\ [//mr] Piiv the contents to Cr. II. of \_i)h(ce], or his order. Witness, J. K. A. B. (Jj) See note (i), post, p. 737. {<') See note {c), post, p. 737, 8 & 9 YiCT. c. 37. 737 above that sum and less than 5/., or in which 205., or above that sum and less than 5/., shall remain undischarged, and which shall be issued in Ireland at any time after the said 1st day of January, 1846, in any other manner than as aforesaid, and also every indorsement on any sucli note, bill, draft, or other undertaking to be negotiated under this act, other than as aforesaid, shall and the same are hereby declared to be absolutely void, any law, statute, usage, or custom to the con- trary thereof in anywise notwithstanding ; provided that nothing in this clause contained shall be construed to extend to any such bank notes as shall be lawfully issued by any banker in Ireland authorized by this act to continue the issue of bank notes (c). 26. That if any body politic or cor2:)orate or any person or Penalty for persons shall, from and after the said 1st day of January, persons other 1846, make, sign, issue, or re-issue in Ireland any promissory tlian 'bankers note payable on demand to the bearer thereof for any sum of ^^^^^ ^jTidno- " money less than the sum of 51., except the bank notes of such notes payable bankers as are hereby authorized to continue to issue bank on demand for notes as aforesaid, then and in either of such cases every such ^^^^ *^^^ ^^'® body politic or corporate or person or persons so making, P°"° '^^ signing, issuing, or re-issuing any such promissory note as aforesaid, except as aforesaid, shall for every such note so made, signed, issued, or re-issued forfeit the sum of 20/. 27. That if any body politic or corporate or person or Penalty for persons shall, from and after the passing of this act, publish, persons other utter, or negotiate in Ireland any promissory or other note than bankers (not being the bank note of a banker hereby authorized to ^.^^ed utterino- continue to issue bank notes), or any bill of exchange, draft, or or negotiating undertaking in writing, being negotiable or transferable, for notes, bills of the payment of 20s., or above that sum and less than 51., or exchange, on which 20s., or above that sum and less than 51., shall f °;', j^^^**'. remain undischarged, made, drawn, or indorsed in any other payment of manner than as is hereinbefore directed, every such body 20s., or less politic or corj)orate or person or persons so publishing, utter- than five ing, or negotiating any such promissory or other note (not poinds. {b) Schedule (E.). [^Flace] [_da!/'] [^month'] [ye^''] Twenty-one days after date pay to A. B. of \_ place"], or his order, the sum of value received, as advised by To E. F. of [place]. C. D. Witness, G. H. And the indorsement, toties quoties. [Z'fl'.y] \_month] [y^«>'] Pay the contents to J. K. of [_ place], or his order. "Witness, L. M. ^ A. B. (c) By 27 & 28 Vict. c. 20, the restrictions on the issue of these notes were removed originally for three years, and now continued by 36 & 37 Vict. c. 75, to the 13th May, 1874. G. 3 B • APPENDIX OF STATUTES (iRELAND). Not to pro- liibit cheques on bankers. being such bank note as aforesaid, bill of exchange, draft, or undertaking in writing as aforesaid, shall forfeit and pay the snm of 201. 28. Provided always, that nothing herein contained shall extend to prohibit any draft or order drawn by any person on his banker, or on any person acting as such banker, for the payment of money held by such banker or person to the use of the person by whom such draft or order shall be drawn. 29. That all pecuniary penalties under this act maybe sued or prosecuted for and recovered for the use of her Majesty, in the name of her Majesty's attorney-general or solicitor-general in Ireland, or of the solicitor of stamps in Ireland, or of any person authorized to sue or prosecute for the same, by writing under the hands of the commissioners of stamps and taxes, or in the name of any officer of stamp duties, by action of debt, bill, plaint, or information in the Court of Exchequer in Dublin, or by civil bill in the court of the recorder, chairman, or assistant barrister within whose local jurisdiction any offence shall have been committed, in respect of any such penalty, or, in respect of any penalty not exceeding 201., by information or complaint before one or more justice or justices of the peace in Ireland, in such and the same manner as any other penal- ties imposed by any of the laws now in force relating to the duties under the management of the commissioners of stamps ; and it shall be lawful in all cases for the commissioners of stamps and taxes, either before or after any proceedings commenced for recovery of any such penalty, to mitigate or compound any such penalty as the said commissioners shall think fit, and to stay any such proceedings after the same shall have been commenced, and whether judgment may have been obtained for such penalty or not, on pajnnent of part only of any such penalty, with or without costs, or on payment only of the costs incurred in such proceedings, or of any part thereof, or on such other terms as such commissioners shall judge reasonable : provided always, that in no such proceed- ing as aforesaid shaU any essoign, protection, wager of law, nor more than one imparlance be allowed ; and all pecuniary penalties imposed by or incurred under this act, by whom or in whose name soever the same shall be sued or prosecuted for or recovered, shall go and be applied to the use of her INIajesty, and shall be deemed to be and shall bo accounted for as part of her Majesty's revenue arising from stamp duties, any thing in any act contained, or any law or usage, to the contrary in anywise notwithstanding : provided always, that it shall be lawful for the commissioners of stamps and taxes, at their discretion, to give all or any part of such penalties as rewards to any person or persons who shall have detected the 8 & 9 Vict. c. 37. 739 offenders, or given information xohich may have led to their prosecution and conviction (a). 30. That after the passing of this act every company or co- Companies to partnership of more than six persons estahHshed. before the sue and be passing of this act, for the purpose of carrying on the "trade or ^^^^^ ^^^^^^ business of bankers within the distance of 50 miles from ^^^^^'^ oi t'l^n- Dublin, shall have the same powers and privileges of suing and being sued, and of presenting petitions to found se- questrations or fiats in bankruptcy, in the name of any one of the public officers of such company or copartnership, as the nominal plaintiff, petitioner, or defendant, on behalf of such company or copartnership, as are provided with respect to companies carrying on the said trade or business at any place in Ireland exceeding the distance of 50 miles from Dublin, under the provisions of an act passed in the 6th year of the reign of Kang Greorge the Foiu-th, intituled " An Act for G Geo. 4,c. 42. the better regulation of copartnerships of certain bankers in Ireland ;" and all judgments, decrees, and orders made and obtained in any action, suit, or other proceeding brought, instituted, or carried on by or against any such company or copartnership carrying on business within the distance of 50 miles from Dublin, in the name of their public officer, shall have the same effect and operation, and may be enforced in like manner in all respects, as is provided in and by the last- mentioned act with respect to the judgments, decrees, and orders therein mentioned ; provided that every such company or copartnership as last aforesaid shall make out and deliver from time to time to the commissioners of stamps and taxes the several accounts or returns required by the last-mentioned act ; and all the provisions of the last-mentioned act as to such accoimts or returns shall be taken to apply to the accounts or returns so made out and delivered by the said last-mentioned companies, as if they had been originally included in the pro- visions of the last-mentioned act. 32. That the term '' bank note " used in this act shall Inteipre- extend and apply to all biUs or notes for the payment of tation of act. money to the bearer on demand; and that the term "banker" shall, when the Bank of Ireland be not specially excej)ted, extend and apply to the Gfovernor and Company of the Bank of Ireland, and to all other corporations, societies, partner- ships, and persons, and every individual person carrying on the business of banking, whether by the issue of bank notes or otherwise ; and that the word " coin " shall be construed to mean the coin of this realm; and that the word " j)erson " used in this act shall include corporations ; and that the singular number used in this act shall include the plural {a) This repealed by 38 k 39 Vict. c. 6G. 3 b2 ^40 APPENDIX OF STATUTES (iRELAND). number, and the plural number the singular, except where there is anything in the context repugnant to such construc- tion ; and that the masculine gender in this act shall include the feminine, except where there is anything in the context repugnant to such construction. Stamp duties in Ireland, 5 & G Vict, c. 82, and continued by 8 & 9 Vict. 0. 2, 11 & 12 Vict. c. 9, 14 & 15 Vict. 0. 18, and 15 & IGVict. 0. 21, made peqjetual. Acts con- tinued in force. Stamp Duties in force for a limited Period made Perpetual. 16 & 17 Vict. c. 59, s. 20. An Act . ... to make perpetual certain Stamp Duties in Ireland («). [4th August, 1853.] 20. And whereas by an act passed in the session of par- liament held in the 5th and 6th years of her Majesty's reign, chapter 82, certain rates and duties, denominated stamp duties, were granted and made payable in Ireland for a limited term ; and by four several acts passed respectively in the 8th, 11th, 14th and 15th years of her Majesty's reign, the same rates and duties were continued for four other several and successive terms, the last of which will expire on the 10th day of October, 1853; and it is expedient to make the said rates and duties perpetual. All the several sums of money and duties, and composition for duties granted and made payable in Ireland by the said act of the 5th and 6th years of her Majesty, chapter 82, and not repealed by any subsequent act, and also all duties now payable in lieu or instead of any of the said duties which may have been so repealed, shall be and the same are hereby continued and made perpetual, and shall be charged, raised, levied, collected, and paid unto and for the use of her Majesty, her heirs and successors for ever. The said act of the 5th and 6th years of her Majesty, and all and every other act or acts now in force in relation to the duties and com- position for duties which are continued by this act, shall severally be continued and remain in full force in all respects in relation to the said duties and composition for duties hereby continued and granted, and all and every the powers and authorities, rules, regulations, directions, penalties, for- feitures, clauses, matters and things contained in the said acts or any of them, and in force as aforesaid, shall severally and respectively be duly observed, practised, applied and put (a) The Inland Ecvenuo llepeal Act, 1870, 33 & 34 Vict. c. 99, s. 2, excepts sect. 20 from its operation, so far as it continues or perpetuates jiny enactment, wliich is thereby repealed. 27 & 28 Vict. c. 8G. 741 in execution in relation to the said duties, and compositions for duties hereby continued and granted, for the charging, raising, levpng, paying, accounting for, and securing of the said duties and composition for duties, and all arrears thereof ; and for preventing, detecting and punishing of all frauds, forgeries, and other offences relating thereto, as fully and effectually to all intents and purposes as if the same powers, authorities, rvdes, regulations, directions, penalties, forfeitures, clauses, matters and things were particularly repeated and re-enacted in the body of this act with reference to the said duties and composition for duties hereby granted. Compositions for Stamp Duty on Bank Post Bills of 61. and iqnvards. 27 & 28 YiOT. c. 86. An Act to permit for a limited Period Compositions for Stamp Duty on Bank Post Bills of 51. and upivards in Ireland. [29th July, 1864.] Whereas by an act passed in the 16th and 17th years of 16 & 17 Vict. her Majesty's reign, chapter 63, the commissioners of her ^- ^•^• Majesty's treasury are authorized and empowered to com- pound and agree with all or any bankers in Scotland or elsewhere for a composition in lieu of the stamp duties payable on the bills of exchange of such bankers: and whereas it is expedient to permit bankers in Ireland for a limited period to compound for the stamp duties payable on their bank post bills as well as on their bills of exchange : be it enacted, &c. as follows: 1. It shall be lawful for the commissioners of her Majesrty's Power to treasury and they are hereby authorized and empowered to treasury to compound and agree with any banker in Ireland for a com- ^^bankers position in lieu of the stamp duties payable on the bank post j^ Ireland bills to be made or drawn by such banker at any time duriny for the stamp the period of three years from the passiny of this act (a), for duty on bank any sum of money amounting to 51. or upwards, and such ^g^*Q^o| composition shall be made on the like tei-ms and conditions ^'j^j.^^ years. and with such security as the said commissioners are by the said act empowered to require in the case of compounding for the stamp duties on bills of exchange; and upon such com- position being entered into by such banker it shall be lawful for him duriny the period aforesaid («), to make, draw, and (a) These words repealed by Statute Law Revision Act, 1875. 742 APPENDIX OF STATUTES (iRELAND). issue all such bank post bills, for wMcli composition stall have been made, on unstamped paper, anything in any act contained to the contrary notwithstanding. 27 & 28 Vict. c. 86. PoTvers of 27 & 28 Vict, c. 8G, made perpetual. Short title. Compositions for Stani]) Duty on Bank Post Bills of 61. and upwards. 30 & 31 YicT. c. 89. An Act to render perpetual an Act passed in the Session /widen in the 27th and 2Sth Years of her i^resent Majesty, intitided ^^ An Act to permit for a limited Period Compositions for Stamp Duty on Bank Post Bills of 51. and rqnvards in Ireland:' [12th August, 18G7.] Whereas by an act passed in the session holden in the 27th and 28th years of the reign of her present Majesty, chapter 86, intituled " An Act to permit for a limited period com- positions for stamp duty on bank post bills of hi. and upwards in Ireland," the commissioners of her Majesty's treasury are empowered to compound and agree, in manner therein men- tioned, with any banker in Ireland for a composition in lieu of the stamp duties payable on the bank post bills to be made or drawn by such banker at any time during the period of three years from the passing of the said act for any sum of money amounting to 5^. and upwards: and whereas it is expedient to make perpetual the powers conferred by the said act: be it enacted, iSrc, as follows: 1. The powers conferred by the said act of the session of the 27th and 28th years of the reign of her i)resent Majesty shall be perpetual, and the said act shall he construed as if the- words " during the period of three years from the passing of this act''^ had been omitted therefrom {h). 2. This act may be cited for aU purposes as " The Stamp Duty Composition (Ireland) Act, 1867." {h) These words repealed by Statute Law Revision Act, 1875. INDEX. ACCEPTANCE, may be genei-al or qualified, 102 — 107. what is a qualified, ib. 1 & 2 Geo. IV. c. 7, ib. "payable at a bankers," 103. when presentment must be proved, ib. holder of draft may refuse to take a qualified, 102. conditional, 105. ■whether acceptance is or is not question of law, ib. per procuration, 300. order to banker to obtain, 118. order to banker to accept drafts against biUs of lading, ib. ACCOIBIODATIOX BILL, 279. notice of dishonour not required as against di'awer of, 536. proof upon, 537. ACCOL^T, customer opening account with banker, 1. opening by partners, 30, 260. authority of one partner to open, and to transfer, ib. coi-poration, 32. trustees, 29. infants, 26. executors, ib. agent, 27. companies, 33. keeping customer',?, 195. {See Pass Book.) accounts at several branches, 199, 428. {See Beanch Banks.) debiting account with costs of action, 198. charging with interest, 199. deposit, 3. customer overdi-awing, 1. disclosing state of, 6, 44. trust accounts, 275 — 280. (-S^-eTEtrsTEES.) Bank of England does not take notice of trusts, 317. ACCOUNTABLE OR DEPOSIT RECEIPTS, 125. what is an accountable receipt, ib. what stamp required, ib. liability of banker on change of firm, 127. on bankruptcy of firm, 128. double liability on, 129. whether it is a negotiable instrument, 130. may bo subject of a donatio mortis causa, ib. Statute of Limitations applies to, ib. forging, 131. obtaining by false pretence, 133. 744 INDEX. ACCOUNTANT-GENERAL, cheques of, 21. ADMINISTRATOR. {See Executoe.) ADVANCES. {See Deposit of Sectteities.) by manager, 472. guaranty to secure, 202. {See Guaeaijties.) to directors, 274. AGENT. {See Bankee, Relation of, and Coeeespondent ; Oedees TO Bankees ; Joint Stock Companies.) ■when he can bind principal by drawing or indorsing cheques, 27. when liable personally, ib. indorsing or accepting bills " per proc," 300. liability of agent indorsing bill, 301. banker making himself agent, 5, 133. notice to agent, 162. London agent, 135. frauds by, 184. taking shares, liability of, 565. ALTERATION, avoids " cheque " if material, 14. altering date is material, ib. fraudulent, who must suffer, 1 7. altering number on bank note. {See Addendum.) APPROPRIATION OF PAYMENTS, 236. general rule as to, ib. in case of partnership, 236. distinct account, 238. legal and illegal items, 242. as to baiTing Statute of Limitations, ib. specific appropriation of payments, ib. where banker becomes bankrupt, ib. in cases of guaranty, 208. ARTICLES OF ASSOCIATION. {See Limited Banking Companies.) under Companies Act, 1862. .406. what it must contain, ib. and how stamped, ib. how altered, ib. ASSIGNEE OF BANKRUPT. {See Bankettptcy and Teustee in Bankeuptcy.) ASSIGNMENT, of debt, 115. of shares, 107. of policies, 163. ATTACHMENT OF FUNDS IN BANKER'S HANDS, 487. under Judicature Act, ib. debt must be absolute not conditional, ib. foreign attachment in Mayor's Court, 488. does not apjily to a corporation, ib. nor to consols, 489. INDEX. 745 ATTACHMENT OF FUNDS IN BANKER'S HANDS— co«. effect of account opened in wife's name, 28. and in their joint names, ib. separate estate under Married Women's Act, 29. and rights of the wife to invest and sue, ib. wife can sue for dishonouring cheque, ib. wife taking shares in company, and her and her husband's liability, 437, 438, 504. INDIAN BANKS, 425. INDORSEMENT. {Sec Cheques ; Bills of ExcHAsaE ; Discoitnt.) of cheques, 22. conditional, of bill, 299. restrictive, of bill, ib. what amounts to, ib. "per proc," 301. liability of person indorsing as agent, ib. INFANT, cheques by, 26. shareholder, liability of, 505. INTEREST. [Sec Pass Book.) on deposits, 4, n., 125. on rests, 199. on balances, ib. comijoiind, ib. IRISH BANKS, 326. JOINT-STOCK BANKS, 375. {Sec Limited Banking Companies ; Winding Up ; Shares.) restrictions upon, 329, 375. siunmary of the statutes relating to issue by, 376. under 7 Geo. IV. c. 4G, ib. return of names under 7 Geo, IV. c. 46, ib. what the return proves, 377. annual returns, 378. contracts by copartnerships under 7 Goo. IV. c. 46. .380. how such partnerships shoidd sue and be sued, ib. setoff, 381. effect of judgment, decrees and orders, ib. registering judgments against members, 382. statute still in force, 383. INDEX. 763 JOINT STOCK BA:^KS—co>itini. may be made to cover futui-e advances, ib. when fixtiu'es pass, 169. mortgagee of lease not bound to take legal assignment, 171. remedy, is foreclosure, ib. Statute of Limitations, ib. as against whom mortgage will prevail, 173. by comxjany, 175. policies of insurance, 161. shares, 163. scrip certificate, 167. biUs of exchange, &c., 177. bills of lading, 179. goods, 183. ships, 185. MUTUAL CREDIT AND SET OFF. {See Banketjptcy.) NOTES, 340. {See Bake Notes.) NOTICE, of dishonor of cheques, 62. bills and notes, 349, 536. to branch banks, 429. to company, thi-ough directors, 451. service of, on manager, 464. OFFICER. {See Public Officee.) ORDERS TO BANKERS, 102. orders to pay, 102. bills of exchange, ib. bills drawn payable at bankers, ib. general or qualified acceptances, ib. acceptances under 1 & 2 Geo. IV. c. 78, ib. to whom payable, 107. paying in forged bUl, banker not protected, ib. banker recci\'ing sum to meet bill cannot apply to other purposes, 108, 110. when is bill paid, ib. payment by cheques provisional or absolute, 109. refusal of banker to pay, 110. no action lies by holder, ib. money specifically appropriated to take up bills, ib. cancellation by mistake. 111. refusal of holder to take a special acceptance, 112. bills payable " in case of need," ib. promissory notes, 113. not within 1 '& 2 Geo. IV. c. 73, ib. made payable at bankers, ib. INDEX. '67 ORDERS TO BXKKEBS—co»ii»Hed. orders other tlian mere orders to pay, 113. appropriation or assignment of funds in favour of third person, 114. ■when such order can be revoked, il>. cheque not an equitable assignment, 115. how assigned in la-w, ib. under Judicature Act, il>. banker's liability to assignee, ib. order to receive dividends, 116. how stamped, ib. order to hold money as stakeholder, 117. contracts of wagering void under 8 &9 Vict. c. 109, s. 18, ib. subscription for winner of lawful game excepted, ib. order to obtain acceptance, 118. order to accept drafts against bills of lading, ib. order to transfer or place to credit of another, ib. order to invest money, 119. as to deposit of securities for safe keeping. {Sec Deposit of Secxteities fok Safe Custody.) general liability of bankers on such deposit, 120. order as to trust fimds, 122. following trust monies in banker's hands, 123. application of Clai/to/i^s case, ib. illegal orders of customers, ib. PAETNERSHIPS AT COMMON LAW, 251. liability of firm for partner's contracts, ib. no implied authority to transfer banking account, ib. drawing or indorsing bills, 252. submission to arbitration, ib. pledging property, ib. liabilitj' of firm for pai-tner's wrongs, ib. defence in actions by partner, 255. joint and several liability of partners, ib. in equity is joint and several, ib. death of partner, 256. no sur\-ivorship of goodwill, ib. partnerships in other firms, ib. change of firm and substitution of liability, 257. incoming partners, 258. partnership account with banker, 260. PASS BOOKS, 195. what it is, ib. change of firm, 197. when credit given in, binds the banker, ib. feloniously making a false entry in, 198. mode of keeping accounts in, ib. accounts at several branches, 199. {Sec Beaxch BA^•KS.) when interest and commission can be charged, i4. deduction of income tax, 201. PAYMENT, appropriation of, 236. {See Appeopeiation.) after notice of bankruptcy, 525. {Set Bankeuptcy.) stopping payment of cheque for benefit of payee's creditors, ib. 768 INDEX. 'PAYMEiHT— continued. of cheques, 36. [See Cheques.) in forged notes, 38. in country bank notes, 39. in bills of exchange, 41. in cash, 43. part payment of cheque, ib.' cheques as evidence of, 74. of lost cheque, 89. of lost note, 355. by cheques, 109. in Bank of England notes, 34 1, 342. in country bank notes, ib. PLATE. {See Deposit.) deposit of, with banker, 191. liability of banker, ib. PLEDGE, with banker, 183. {See Deposit.) how far available for subsequent advances, ib. when default made, banker may sell, ib. pledgor not the i-eal owner, ib. liability of banker, 184. POLICIES OF INSURANCE, 161. {See Deposit.) is a chose in action within Bankruptcy Act, ib. notice need not be given as against the trustee of depositor of, 162. notice should be sent for other purposes, ib. assignment of policies, ib. POST-DATING CHEQUES, 14. POWER OF ATTORNEY, to transfer stocks by, 313. by forged power, 314. forging, to receive dividends, 321. PRESENTMENT, of cheques, 49. {See Cheques.) time for, ib. as between payee and drawer, ib. payee and drawee, 51, transferee and payee, 52. transferee and di-awer, ib. place of, ib. through Clearing House, 53. by post, 57. stale or overdue, ib. when presentable for payment, 59. dispensing with, 61. of bms, 84, 85, 103. {See Bills.) of notes, 345. {See Bank Notes.) PROMISSORY NOTES, 328. {See Banks of Issue.) of Bank of England, exempt from stamp duty, 329. stamp duty on, 330. lien on, 244, 248. deposit of, 177. payable at bankers, 113. INDEX. 769 PUBLIC OFFICES, 375. {Sse Joixt Stock Bank?.) duties of, 376, 474. actions and suits by and against, 380, 47o. judgments, decrees, and orders against, 3S1, 479. how payment to bo realized, ib. indemnity of, 480. death, resignation or removal, 478. criminal proceedings by and against, 48. RECEIPTS, 125. [Ses Accouxtable oe Deposit Receipts.) stamp on banker's, 125 RECEIVER. pajdng into bank, 282. REGISTER, 411. {See Joint Stock Banks ; Limited Banks.) of members, 411. what it must contain, if). rectifying register, 412. inspection of, 413. of office, 409. of mortgage, 415. effect of neglect, 415. who must do so, ib. of judgments, 382. REGISTRATION OF JOINT STOCK BANKS, 393, 395, 400, 422. REMITTANCES, 372. {See Discount ; Relation of London and Country Bankees ; Commission.) loss of note remitted to creditor by debtor, 373. when banlier liable for loss of, 133, 131. remittances abroad, 374. of bank post bills, 152. sijecific ax^propriation of, 135. REPUTED OWNERSHIP, 523. {Sec Bankruptcy.) RETURNS. {See Joint Stock Banks ; Banks of Issue.) of names under 7 Geo. IV. c. 46. ,376. what return proves, 377. annual, 378. to stamp office, 382. of notes in circulation, ib. SAVINGS BANKS, 262. definition of, ib. how formed, ib. deposits, rules to be observed, 263. purchase of annuities in, 265. deposit book, ib. remedies of depositors, 266. investments, 267. weelily and annual accounts, ib. officers in, must give security, 268. loss by acts or misconduct of, ib. trustees of, 270. civil liability of, 271. criminal liability, ib. Military, Naval, and Post Office savings banks, ib. SCOTCH BANKS, 422. G. 3 D 770 INDEX. SCRIP CERTIFICATE, what it is, 1G7. passes by delivery, ili. must be stamped, ib. deposit of, ib. SECURITIES. {Sec Deposit op Securities.) SET-OFF, 293, 539. {See Bankeuptcy.) what debts can be, 510. must be in same right, ib. object of Sect. 39 of Bankruptcy Act, ib. persons liable on bills, &c., to a bank buying up their notes after stoj)page to, 354, as to country bank notes, 352. as to contributories' right of, 508. against calls, 138. SHARES AND SHAREHOLDERS, 431. {See Dibectoe3 ; Wind- ixG-up ; Deposits; Lien; Joint Stock Banks.) are personal propei-ty, ib. equitable mortgage of, 161, 432. scrip certificate, 167. purchase or sale of shares, 432. contract for sale not within 17th sect, of Statute of Frauds, 433. stamp required for contract, ib. purchase of, induced by fravid, ib., 410, 506. transfer of, ib. 434. consent of directors, 434, 456. liability of transferee, 510. shareholders, 435. {See Winding-up.) who are, under Companies Act, ib. and under 7 Geo. IV. c. 46, ib. applicants and allottees, 503. bankrupt's trustee, ib. directors, 504. infants, 505. legatees, ib. principal and agent, ib. trustees, 506. executors, 437, 504. husband and wife, ib., 504. liability of husband, ib. Married Women's Property Act, 438. spiritual persons, ib. calls, 439. when to be made, ib. money due on, is specialty debt, 439. charging shares, 441. when it operates, 442. how it may be made, ib. banker's lien on. {See Lien.) appropriating, by directors, 451. purchase of, by comjDany, 455. enhancing price of, dii'ectors, 459. suiTeuder of, 400. forfeiting, 461. shareholders' liability on wiuding up. {See Winding up.) criminal liability of sliarcholders, 481. SHIP. {See Deposit to secure Advances.) mortgage on, IS 5. under Merchant Shipping Act, 1S51, ib. INDEX. SKIP— mitiiiiicd. direct mortgage with registration, 185. moi'tgage under certificate, 1S6. equities may be enforced against mortgagees, 187. ecjuitable mortgage of, valid without registration, ib. SHORT BILLS, Uo. {Sc-e Deposit.) STAMPS. {See Appendix.) on receipts of banker, 125. on cheques, 18. cancelling, 19. on order to receive dividend, 110. on letter of credit, 100. bank notes, 33-5. adhesive, 18. on order to pay a sum of money out of a debt, 115. on bills. {See Appendix.) STOCK. {See Bank of England.) contract for the sale of, 309. in public funds, 308. transfer of, 310 — 315. transfer by executor, 311. by joint proprietors, 312. mortgage of, 315. investment of trust funds in Bank of England, 323. bequests of, 326. charging, 318. STOPPAGE OF BANK, not act of bankruptcy, 517. SURETY. {See Guaeanty.) release of, 208. by variation of agreement, ib. time or indulgence given to principal, 209. non-disclo.sure, 211. creditors taking security, 213. release of debtor, 215. payment, 218. TENDER. {See Bank Notes.) in bank notes, 39. of coin, 36. TITLE DEEDS, 1G&. {See Deposit to secxtee Advances.) TRANSFER OF STOCK, 310—315. {SeeSwcx.) of shares, 434. {See Shakes.) TRUST PROPERTY, lien as to, 246. TRUSTEE IN BANKRUPTCY. (5ec Bankkuptct.) cheques drawn by, 26. as contributory, 503. TRUSTEES, depositing trust funds with banker, 275. liability of, 270. mixing trust fund with his o^vn, 278. banker's liability for misapplication by, 281. payment to, 279. CO -trustee must join, ib. liability for co-trustee, 280. cheques of, 29. when shareholders, 506. 771 772 INDEX. TUVSTEES— continued. "when liable as contributories, 506. investing in bank stock, 323. TRUSTEES OF PUBLIC BODIES, 273. TEUSTS, Bank of England does not notice, 317. (See Trustee.) UNCLAIMED DIVIDENDS, 322. ITNLIMITED BANKING COMPANIES, 375, 397. {See Joint Stock Banks.) converting into limited liability, 397. {See Li>nTED Banks.) WARRANT FOR DIVIDENDS, sent by post, 321. making out false, 322. "WILL, what words in, pass an account at bankers, 2. bank note, 342. WINDING-UP AND DISSOLUTION, of banking copartnerships, 490. of limited banking companies, 491. compulsory, 492. petition for, 494. restraining actions against company, ib. forwarding order to registrar, 495. voluntary, ib. imder supervision of court., 497. liquidators, ib. prosecuting delinquent lic^uidators, 485. winding-up of companies existing before 1862. .500. contributories generally, 502. applicants, 503. allottees, ib. bankrupt's trustee, ib. directors, 504. executors and administrators, ib. females marrying, ib. infants, 505. legatees, ib. principals and agents, id, trustees, 506. purchasers by means of misrepresentation, 506. scripholders, ib. list of contributories, ib. past members, 507. rectifying register on settling list,'__508, proving debts, ib. making calls, ib. right of set off, ib. nature of liability, 510. extent of liability, ib. enforcing calls, ib. dissolution of companies on winding-up, 511. other modes of winding up, 512. of colonial banks, 513. WITNESS, obligation of banker to give evidence, 4. C. F. EOWOETH, PEINTEE, BEEAll'S BUILDINGS, ClIANCEEY LANE, E.G. •wjpllfincnt FOURTH EDITION OF GRANT'S TREATISE LAW RELATmCi TO BANKERS BANKING COMPANIES, CONTAIXIXG THE BILLS OF EXCHANGE AND BILLS OF SALE ACTS, 1882, V/ITH NOTES. BY CLAUDE C. M. PLUMPTRE, OF THE MIDDLE TEMPLE, BAKRISTER-AT-LAW, ESQ. Middk Temple Common Law Scholar, Hilary Term, 1877, Author of " A Summary of the Law of Simple Contracts." LONDON: BUTTERWORTHS, 7, FLEET STREET, ICatD \0u6lis'^crs to tijc C^uccn's most excellent JWajcstn. HODGES, FIGGIS & CO., GRAFTON STREET, DUBLIN. CALCUTTA: THACKER, SPINIC & CO. MELBOURNE: GEORGE ROBERTSON. MANCHESTER : JMEREDITH, RAY & LITTLER. EDINBURGH : T. & T. CLAEK ; BELL & BRADFUTE. 1882. LONDON : PRINTED BY C. F. EOWOETH, BREAM'S BUTLDINOS, CHANCERY LANE. ( -73 ) BILLS OF EXCHANGE ACT. 1882. 4.5 & 46 YiCT. c. 01. An Act to codify the law relating to Bills of Exchange, Cheques, and Promissory Notes. [18tli August, 1882.] Be it enacted by the Queen's most excellent Majesty, by and ■with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : PAET I.— PRELIillNAP.Y. 1. This act may be cited as the Bills of Exchange Act, Short title. 1882 («). 2. In this act, unless the context otherwise requires,— Interpreta- " Accejjtance " means an acceptance completed by delivery tionof teims. or notification (b). " Action " includes counter claim and set off. " Banker " includes a body of persons whether incorporated or not who carry on the business of banhing. " Bankrupt " includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy. "Bearer" means the person in possession of a bill or note which is payable to bearer. "Bill" means bill of exchange, and "note" means pro- missory note (c). "Delivery" means transfer of possession, actual or con- structive, from one person to another {d). "Holder" means the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof (e). " Indorsement " means an indorsement completed by delivery (/). (rt) The law relating to the issue of bank notes is not affected by this act (sect. 97). The act extends to Ireland and Scotland, and only to bills, cheques, and notes. (b) See sect. 21 as to what constitutes "delivery." (c) For fui-ther definition of "bill," see .sect. 3 (1), and for "note," see sect. 83; for defiuition of "bill payable on demand," see sect. 10, and for "cheques," sect. 73. (d) As to what amounts to an effectual delivery, see sect. 21. {e) For definition of " holder in due course," see sect. 29. (/) As to the requisites of a valid indorsement, and as to the kinds of indorsements, see sects. 32, 33, 34, 3o. G. ^ I^ 774 SUPPLEMENT. " Issue " means the first delivery of a bill or note, complete in form to a person wlio takes it as a holder. " Person " includes a body of persons whether incorporated ornot(/). "Value" means valuable consideration (5^). "Written" includes printed, and "writing" includes print. PAET II. — Bills of ExcnAxoE. Form and Interpretation. Bill of 3. (1.) A bill of exchange is an unconditional order in exchange writing, addressed by one person (//) to another ii), signed by defined. ^-j^g person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person {!<), or to bearer. (2.) An instrument which does not comply with these con- ditions, or which orders any act to be done in addition to the payment of money, is not a bill of exchange. (3.) An order to pay out of a particular fund is not uncon- ditional within the meaning of this section ; but an unqualified order to pay, coupled with (a) an indication of a particular fund out of which the drawee is to reimburse himself or a particular account to be debited with the amount, or (b) a statement of the transaction which gives rise to the bill, is unconditional. (4.) A bill is not invalid by reason — (a.) That it is not dated (^) ; (b.) That it does not specify the value given, or that any value has been given therefor ; (c.) That it does not specify the place where it is drawn or the place where it is payable. Inland and 4. (1.) An inland bill is a bill which is or on the face of it foreign bills, purports to be (a) both drawn and payable within the British Islands, or (b) drawn within the British Islands upon some person resident therein. Any other bill is a foreign bill (?»). For the purposes of this act "British Islands" mean any (/) As to a corporation drawing, accepting, or indorsing bills, see sect. 22. {g) See further as to valuable consideration, sect. 27. (A) Called the "drawer." \i) Called the "drawee," and if he accepts, the "acceptor." \k) Called the "payee." {I) See further as to dating a bill, sects. 12, 13. \m) Foreign bills arc frequently drawn in sets. See sect. 71. The pro- visions in the Stamp Act relating to foreig-n bills are still in force. See sect. 07 (3). Tlic Stamp Act is printed in the Appendix to Grant, p. G43. 45 & 46 VioT. c. Gl. 775 part of the United Kingdom of Great Britain and Ireland, the i.slands of Man, Griierusey, Jersey, Alderney, and Sark, and the islands adjacent to any of them being part of the dominions of her Majesty. (2.) Unless the contrary appear on the face of the bill the holder may treat it as an inland bill(«). 5. (1.) A bill may be drawn payable to, or to the order of. Effect whero the drawer; or it may be drawn payable to, or to the order (different of, the drawee. bmtrcthe (2.) Where in a bill drawer and drawee are the same ^^^^ person, person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note. 6. (1.) The drawee must be named or otherwise indicated Address to in a bill with reasonable certainty. drawee. (2.) A bill may be addressed to two or more drawees whether they are partners or not, but an order addressed to two drawees in the alternative or to two or more drawees in succession is not a bill of exchange. 7. (1.) AYhere a bill is not paj'able to bearer, the payee Certainty must be named or otherwise indicated therein with reasonable required as certainty. to payee. (2.) A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an ofiico for the time being (o). (3.) Where the payee is a fictitious or non-existing person the bill may be treated as payable to bearer. 8. (1.) AVhen a bill contains words prohibiting transfer, or What bills indicating an intention that it should not be transferable (]}), are ncgo- it is valid as between the j^arties thereto, but is not nego- ^' tiable. (2.) A negotiable bill may be payable either to order or to bearer. (3.) A bill is payable to bearer which is expressed to be so payable, or on which the only or last indorsement is an in- dorsement in blank. (4.) A bill is payable to order which is expressed to be so payable, or which is expressed to be poi/able to a particidar person, and does not contain loords j^rohibitiny transfer or indi- cating an intention that it shoidd 7iot be transferable (g). («) This is new. (o) This provision as to an alternative payee and to the holder of an office for the time being is new. {j}) See sects. 35, 36. {q) This is new. A bill payable to A. B. will henceforth Lc oquiv.alent to a bill payable to " A. B. or order." :j E 2 776 SUPPLEMENT. (5.) Where a bill, either originally or by indorsement, is exj)ressed to be i-)ayable to tlie order of a specified person, and not to liim or his order, it is nevertheless payable to him or his order at his option. Sum payable. 9. (1.) The sum payable by a bill is a sum certain within the meaning of this act, although it is required to be paid — (a.) With interest, (b.) By stated instalments. (c.) By stated instalments, with a provision that upon default in payment of any instalment the whole shall become due. (d.) According to an indicated rate of exchange or ac- cording to a rate of exchange to be ascertained as directed by the bill. (2.) Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable {?•). (3.) AVhere a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated from the issue thereof. 10. (1.) A bill is payable on demand — (a.) AVhich is expressed to be payable on demand, or at sight, or on presentation ; or (b.) lu which no time for payment is expressed. (2.) Where a bill is accepted or indorsed when it is overdue, it shall, as regards the acceptor who so accepts, or any indorser who so indorses it, be deemed a bill payable on demand (s). 11. A bill is payable at a determinable future time within the meaning of this act which is expressed to be payable — (1.) At a fixed period after date or sight (i). (2.) On or at a fixed period after the occurrence of a speci- fied event tchich is certain to happen, though the time of happening may be uncertain. An instrument expressed to bo payable on a contingency is not a bill, and the happening of the event does not cure the defect. 12. AVhere a bill expressed to bo payable at a fixed period after date is issued undated, or where tlie acceptance of a bill payable at a fixed period after sight is undated, any holder Bill payable on demand. Bill payable at a future time. Omis.sion of date in bill payable after date. (r) Tliis is confirmatory of the common law. See Grant, jx 16. («) As to when a bill payable on demand is to be deemed to be over- due, see sect. 3G (3) ; and as to the eqiutics attaching to an overdue bill, lb. sub-sect. 2. As to presentment of such bills, see sect. 45 (2). As to the effect of a bankcn- paying such bills with a forged indorsement thereon, sec sect. CO. A cheque is defined l>y sect. 73 to be a bill payable on demand. {!) See sects. U (2). {?,), and C. (-i). • 4o .t 4() YicT. c. 61. 777 may insert tlioreiu the true date of issue or acceptance, and the bill shall be payable accordingl}'. Provided that (1) -where the holder in good faith and by mistake inserts a wrong date, and (2) in every case where a wrong date is inserted, if the TdIII subsequently comes into the hands of a holder in due course the bill shall not be avoided thereby, but shall operate and be payable as if the date so inserted had been the true date («). 13. (1.) Where a bill or an acceptance or any indorsement Ante-dating on a bill is dated, the date shall, unless the contrary be proved, ^^. V^st- be deemed to be the true date of the drawing, acceptance, or ^ "^=* indorsement, as the case may be. (2.) A bill is not invalid by reason only that it is ante-dated or post-dated, or that it bears date on a Sunday (v). 14. Where a bill is not payable on demand (.r) the day on Computation which it falls due is determined as follows : o* *""® °^ (1.) Three days, called days of grace, are, in every case pay°^ent. where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace : Provided that — (a.) When the last day of grace falls on Sunday, Christmas Day, Good Friday, or a day appointed by royal proclamation as a public fast or thanksgiving day, the bill is, except in the case hereinafter pro- \Tided for, due and payable on the preceding business day (y) ; (b.) When the last day of grace is a bank holiday (other than Christmas Day or Good Friday) under the Bank Holidays Act, 1871, and acts amending or 34 & 35 Vict, extending it, or when the last day of grace is a c. 17. Sunday and the second day of grace is a bank holiday, the bill is due and payable on the succeed- ing business day. (2.) Where a bill is payable at a fixed period after date, after sight, or after" the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run and by including the day of payment. (3.) Where a biU is payable at a fixed period after sight ,^ the time begins to run from the date of the acceptance if the bill be accepted, and from the date of noting or pro- test if the bill be noted or protested for non-acceptance, or for non-delivery. (4.) The term "month " in a bill means calendar month. («) This section is new. ((■) As to the former law relating to post-dating cheques, see Grant, p. 14. {x) As to what bills are payable on demand, sec sect. 10. (y) This is new. As to the expression " business day," sec sect. 92. / 1' SUPPLEMENT. Optioual stipvilations by drawer or indorser. Definition aud requi- sites of ac- ceptance. Case of need. 15. The drawer of a till and any indorser may Insert therein the name of a person to whom the holder may resort in case of need, that is to say, in case the hill is dishonoured by non-acceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may think fit (z). 16. The drawer of a bill, and any indorser, may insert therein an express stipulation — (1.) Negativing or limiting his own liability to the holder : (2.) "Waiving as regards himself some or all of the holder's duties. 17. (1.) The accex-)tance of a bill is the signification by the drawee of his assent to the order of the drawer. (2.) An acceptance is invalid unless it complies with the following conditions, namely : (a.) It must be written on the bill and be signed by the drawee. The mere signature of the drawee without additional words is sufficient. (b.) It must not express that the drawee will perform his promise by any other means than the payment of money. Time for 18. A bill may be accepted — acceptance. (1.) Before it has been signed by the drawer, or while otherwise incomplete («). (2.) When it is overdue, or after it has been dishonoured by a previous refusal to accept, or dj non-payment {b). (3.) "When a bill payable after sight is dishonoured by non- acceptance, and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of fu-st presentment to the di'awee for acceptance (c). General and 19. (1.) An acceptance is either (a) general, or (b) quali- qualified fied {(/). acceptances. ^2.) A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn. In particular an acceptance is qualified which is — (a.) conditional, that is to say, which makes payment by the acceptor dependent on the fulfilment of a condition therein stated {e) : (:) By sect. G7 the bill mnst be noted before presentment to the referee. It woiild seem that notice of dishonour to the referee is not notice to the indorser {In re Leeds Bankiiuj Co., Ex parte Fnonje, L. R., 1 Eq. I). {a) See sect. 21. {b) Sec sects. 10, 39 (4). (e) This sub-section is new. {d) Sec Grant, p. 102, where the subject of general aud qualified acceptances is fully discussed. As to the right of the holder to refuse, and the effect of such an acceptance, see sect. 44. {e) Sec Grant, p. 10.5. 45 & 46 Vict. c. <3l. 779 (b.) partial, tliat is to say, an acceptance to pay part only of the amount for which the bill is drawn : (c.) local, that is to saj', an acceptance to pay only at a particular specified place (/) : An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only and not elsewhere if) : (d.) qualified as to time ; (e.) the acceptance of some one or more of the drawees, but not of all. 20. (1.) AVhere a simple signature on a blank stamped Inchoate ia- paper is delivered by the signer in order that it may be con- struments. verted into a bill, it operates as a prima facie authorit}^ to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the cbawer, or the acceptor, or an indorser ; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill iip the omission in any way he thinks fit. (2.) In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a cj^uestion of fact. Provided that if any such instrument after completion is negotiated to a holder in due course it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been tilled up within a reasonable time and strictly in accordance with the authority given (g). 21. (1.) Every contract on a bill, whether it be the di-awer's. Delivery, the acceptor's, or an indorser's, is incomplete and revocable, until delivery of the instrument in order to give effect thereto. Provided that where an acceptance is written on a bill, and the drawee gives notice to or according to the directions of the person entitled to the bill that he has accepted it, the accept- ance then becomes complete and irrevocable. (2.) As between immediate parties, and as regards a remote party other than a holder in due course, the delivery — (a.) in order to be effectual must be made either by or under the authority of the party drawing, accepting, or indorsing, as the case may be : (b.) may be shown to have been conditional or for a special purpose only, and not for the pui-pose of transferring the property in the bill (A). (/) See Grant, p. 102. {(/) For definition of " holder in due course," see sect. 29. (A) As to deposit of bills with banker for special purposes, p. 252, 2.jG. {I) See sects. 54 (2), 55, GO, 80 and 82. (/«) By sect. 73, this section applies to cheques. As regards the banker's obligation to know his customer's signature at common law, sec Grant, p. 11 ; and for cases in which the customer has been dis- allowed U) set up a forgery, sec Grant, p. 1 7. As to forged indorccmcnts on cheques, see sects. CO and 82. 45 & 46 Vict. c. 61. 781 agent has "but a limited authority to sign, and the principal is onl}' bound by such signature if the agent in so signing was acting within the actual limits of his authority (m). 26. (1.) Where a person signs a bill as drawer, indorser, or Person sigTi- acceptor, and adds words to his signature, indicating that ho ing as agent signs for or on behalf of a principal, or in a representative °'" ^'^ repre- character, he is not personally liable thereon ; but the mere ^^^*^*'.^^'® addition to his signatui'e of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. (2.) In determining whether a signature on a biU is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instru- ment shall be adopted (o). T/ic Consideration for a Bill. 27. (1.) Yaluable consideration for a bill may bo con- -Value and stituted by — holder for (a.) Any consideration sufficient to support a simple con- "*''^^^^- tract ; (b.) An antecedent debt or liability. Such a debt or liabi- lity is deemed valuable consideration whether the bill is payable on demand or at a future time. (2.) Where value has at any time been given for a bill the holder is deemed to be a holder for value as regards the ac- ceiitor and all parties to the bill who became parties prior to such time. (3.) Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien (/j). 28. (1.) An accommodation party to a bill is a person who Accommoda- has signed a bill as drawer, acceptor, or indorser, without re- tio^ ^il^ ^^ ceiving value therefor, and for the purpose of lending his P^'^*^' name to some other person. (2.) An accommodation party is liable on the bill to a holder for value ; and it is immaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not {q). (h) See Grant, pp. 300, 301. (o) As to the liability of an agent signing without authority, see Grant, p. 301. The Companies Act is not affected by this act, see sect. 97 ; and consequently the in-ovisions of the -ITth section of the former statute, re- lating to the signing of bills by agents, still remain in force. (j») As to banker's lien, see Grant, p. 244. ((/) As to notice of dishonour being dispensed with in case of accom- modation bill, see sect. 50 (2) (c) and (d), and Grant, p. 530. 782 SUPPLEMENT. Holdei" in due course. Presumptiou of value and arood faith. 29. (1.) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the fol- lowing conditions ; namely — (a.) That he became the holder of it .before it was overdue, and without notice that it had been previously dis- honoured, if such was the fact : (b.) That he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who nego- tiated it. (2.) In particular the title of a person who negotiates a bill is defective within the meaning of this act when he obtained the bill, or the acceptance thereof, by fraud, duress, or force and fear, or other unlawf id means, or for an illegal considera- tion, or when he negotiates it in breach of faith, or iinder such circumstances as amount to a fraud. (3.) A holder (whether for value or not), who derives his title to a bill through a holder in due course, and who is not himself a party to any fraud or illegality affecting it, has all the rights of that holder in due course as regards the acceptor and all parties to the bill prior to that holder {>•). 30. ( 1 . ) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value. (2.) Every holder of a bill is prima facie deemed to be a holder in due course ; but if in an action on a biU it is ad- mitted or jiroved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is sliifted, imless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill. Negotiation of bUl. Kcgotiatioyi of Bills. 31. (1.) A bill is negotiated when it is transferred from one person to another in such a manner as to constitute the trans- feree the holder of the bill (s). (2.) A bill payable to bearer is negotiated by delivery (/). (^.) A bill payable to order is negotiated by the indorse- ment of the holder completed by delivery {u). (4.) A\Tiere the holder of a bill payable to his order trans- fers it for value without indorsing it, the transfer gives the (;•) The expression "holder iu duecoui'.so" is substituted for the com- mon law expression, "bona fide holder and for value." As to the rights of a " holder in due course," see sect. 3S. (a) For definition of holder, see sect. 2. {t) As to delivery, see sects. 2,21. («) See as to indorsement, sects. 32, 33, 31, 35. 45 & 46 Vict. c. 61. 783 transferee sucli title as tlie transferor liad in tlie Lill, and tlie transferee in addition acquires the right to have the indorse- ment of the transferor. (5.) Where any person is under obligation to indorse a hill in a representative capacity, he may indorse the bill in such terms as to negative personal liability (x). 32. An indorsement in order to operate as a negotiation Requisites must comply with the following conditions, namely — of a valid (1,) It must be written on the bill itself and be signed by ii^iorseinent. the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient. An indorsement written on an allonge (y), or on a "coj)y" of a bill issued or negotiated in a country where "copies" are recognized, is deemed to be written on the bill itself. (2.) It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which pur- ports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotia- tion of the bill. (3.) Where a bill is payable to the order of two or more payees or indorsees who are not partners all must indorse, unless the one indorsing has authority to indorse for the others. (4.) Where, in a bill payable to order, the payee or in- dorsee is wrongly designated, or his name is misspelt, he may indorse the bill as therein described, adding, if he think fit, his proper signature. (5.) AYhere there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved. (6.) An indorsement may be made in blank or special. It may also contain terms making it restrictive (;:). 33. Where a bill purports to be indorsed conditionally the Conditional condition may be disregarded by the payer, and paj-meut to indorsement, the indorsee is valid whether the condition has been fulfilled or not (rt). 34. (1.) An indorsement in blank specifies no indorsee, and Indorsement a bill so indorsed becomes payable to bearer. in blank and (2.) A special indorsement specifies the person to wliom, or ^T^tial in- to whose order, the bill is to be payable. ' orsemen . {x) See sects. 16, 25, 26, and Grant, p. 301. (;/) j^ ' ' allonge " is a slip of paper annexed to the bill Avhere there is no room left for further indorsements. {z) See sect. 35. (n) This is new. As regards the old law, sec aiife, p. 298. 784 SUPPLEMENT. Restrictive indorsement (.3.) The provisions of tTiis act relating to a payee apply, ■with the necessary modifications, to an indorsee under a special indorsement (c). (4.) AVhen a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person. 35. (1.) An indorsement is restrictive which prohibits the further negotiation of the bill, or which expresses that it is a mere authority to deal with the l)ill as thereby directed, and not a transfer of the ownership thereof ; as, for example, if a bill be indorsed " Vaj I), only," or "Pay D. for the account of X.," or " Pay 1). or order for collection." (2.) A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee, unless it expressly authorize him to do so. (3.) Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the bill with the same rights, and subject to the same liabilities as the first indorsee under the restrictive indorsement (r/). 36. (1.) "Wliere a bill is negotiable in its origin, it continues of overdue or ^q }jq negotiable until it has been (a) restrietively indorsed, dishonoured ^j. ^-^^-^ discharged by payment or otherwise (e). (2.) Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had (/). (3.) A bill payable on demand is deemed to be overdue ■within the meaning and for the purposes of this section when it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact (y). (4.) Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue. (5.) Where a bill which is not overdue has been dishonoured, any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of Negotiation (c) See sects. 7, 8. {d) As regards restrictive indorsements at common la'w, sec ante, p. 299. (c) As to discharge of bill, sec sects. ')9 ct seq. {/) As to defective title, see sect. 29 (2). (/■/) This provision, though it does not apply to notes (see sect. 86 (3) ), applies to cheques (sec sect. 73). Sec as to the common law rule regard- ing the latter instnunents, a)ile, pp. 57, 58, 4o & 46 Vict. c. 61. 785 dishonour, but iiotliiug in this sub-section shall affect the rights of a holder in due course (h). 37. "Where a bill is negotiated back to the drawer, or to a Negotiation prior indorser or to the acceptor, such party may, subject to °^ ^^^ ^^ the provisions of this act(/), re-issue and further negotiate fiabie thereou the bill, but he is not entitled to enforce pajinent of the bill against any intervening party to -whom he was previously liable. 38. The rights and powers of the holder of a bill are as Rights of the- folloAVS : holder. (1.) He may sue on the bill in his own name : (2.) "Where he is a holder in due course, he holds the bill free from any defect of title of prior parties, as well as from more personal defences available to prior parties among themselves, and may enforce payment against all parties liable on the bill : (3.) Where his title is defective (a) if he negotiates the bill to a holder in due course, that holder obtains a good and complete title to the bill, and (b) if he obtains pay- ment of the bill, the person who pays him in due course gets a valid discharge for the bill (A). General Ditties of the Holder. 39. (1.) "W^here a bill is payable after sight, presentment When pre- fer acceptance is necessary, in order to fix the maturity of the sentment for instrument. ^ _ neceLw' '' (2.) "WTiere a bill expressly stipulates that it shall be presented for acceptance, or where a bill is drawn payable elsewhei'e than at the residence or place of business of the drawee, it must be presented for acceptance before it can be presented for payment. (3.) In no other case is presentment for acceptance neces- sary in order to render liable any j)arty to the bill. (4.) "Where the holder of a bill, drawn payable elsewhere than at the place of business or residence of the drawee, has not time, with the exercise of reasonable diligence, to present the bill for acceptance before presenting it for payment on the day that it falls due, the delay caused by presenting the bill for acceptance before presenting it for payment is excused, and does not discharge the drawer and indorsers [k). 40. (1.) Subject to the provisions of this act(/), when a Time for bill payable after sight is negotiated, the holder must either presenting ^ '' & o ' IjJ^j payable ~~~ after sight. (A) As to "holder in due course," and "defects of title," see sect. 29. This section does not apply to a person deriving a title through a forgciy, see sect. 24. (?■) See sects. 59 (3) and 61. {Jc) This provision is new. (/) See pect. 41 (2). r86 f5UPPLEMENT. Rules as to jDresentment for accept- ance, and excuses for non-present- ment. Non-accept- ance. Dishonour Ly non- acceptance and its con- sequences. present it for acceptance or negotiate it within a reasonable time. (2.) If he do not do so, the drawer and all indorsers prior to that holder are discharged. (3.) In determining what is a reasonable time within the meaning of this section, regard shall be had to the nature of the biU, the usage of trade with respect to similar biUs, and the facts of the particular case. 41. (1.) A bill is duly presented for acceptance which is presented in accordance with the following rules : (a.) The presentment must be made by or on behalf of the holder to the drawee or to some person aixthorized to accept or refuse acceptance on his behalf at a reason- able hour on a business day and before the bill is overdue : (b.) Where a bill is addressed to two or more di-awees, who are not partners, presentment must be made to them all, unless one has authority to accept for all, then present- ment may be made to him only : (c.) Where the di-awee is dead, presentment may be made to his personal representative : (d.) Where the drawee is bankrupt, presentment may be made to him or to his trustee : (e.) Wliere authorized by agreement or usage, a present- ment through the post office is sufficient. (2.) Presentment in accordance with these rules is excused, and a bill may be treated as dishonoured by non-acceptance — (a.) Where the drawee is dead or bankrupt, or is a fictitious person or a person not having capacity to contract by biU : (b.) Where, after the exercise of reasonable diligence, such presentment cannot be effected : (c.) Where although the presentment has been irregular, acceptance has been refused on some other ground. (3.) The fact that the holder has reason to believe that the bill, on presentment, will bo dishonoured does not excuse presentment. 42. (1.) AVhen a bill is duly presented for acceptance and is not accepted within the customary time («), the person presenting it must treat it as dishonoured by non-acceptance. If he do not, the holder shall lose his right of recourse against the drawer and indorsers. 43. (1.) A bill is dishonoured by non-acceptance — (a.) AVhen it is duly presented for acceptance, and such an acceptance as is prescribed by this act is refused or cannot be obtained ; or («) ITsually 21 houvH. Sec Byles on Bills, p. 18.'), 13th vd. 45 & 46 YicT. c. 01. 787 (b.) When presentment for acceptance is excused and tho bill is not accepted. (2.) Subject to the provisions of this act (o) when a bill is dishonoured by non-acceptance, an immediate right of recourse against the di-awer and iudorsers accrues to the holder, and no presentment for payment is necessar}-. 44. (1.) The holder of a biU may refuse to take a qualified Duties as to acceptance, and if he does not obtain an unqualified acceptance q.uanned ac- niay treat the bill as dishonoured by non-acceptance. ^^^ ances. (2.) Where a qualified acceptance is taken, and the drawer or an indor&er has not expressly or impliedly authorized the holder to take a qualified acceptance, or does not subsequently assent thereto, such drawer or indorser is discharged from his liability on the bill. The provisions of this sub-section do not apply to a partial acceptance, whereof due notice has been given. Where a foreign bill has been accepted as to part, it must be protested as to the balance. (3.) When the drawer or indorser of a bill receives notice of a qualified acceptance, and does not within a reasonable time express his dissent to the holder he shall be deemed to have assented thereto (/»). 45. Subject to the provisions of this act a bill must be duly Rules as to presented for payment (y). If it be not so presented the prescutment drawer and iudorsers shall be discharged. °^ pajTnen . A bill is duly presented for payment which is presented in accordance with the following rules : — (1.) Where the bill is not payable on demand, presentment must be made on the day it falls due (?•). (2.) "S^Tiere the bill is payable on demand, then, subject to the provisions of this act, presentment must be made within a reasonable time after its issiie in order to render the drawer liable, and within a reasonable time after its indorsement, in order to render the indorser liable (s). In determining what is a reasonable time, regard shall be had to tho nature of the bill, the usage of trade with regard to similar biUs, and the facts of the jiarticular case {(). (3.) Presentment must be made by the holder or by some person authorized to receive payment on his behalf at a reasonable hour on a business day, at the proper jDlace as hereinafter defined, either to the person designated by (o) See sect. 65. Ip) See further as to qualified acceptances, (oite, p. 102, and sect. 19. (q) See next section. (»■) See sect. 14. («) As to cheques, see sect. 74. {i) See as to cheques, p. 49. 788 SUPPLEMENT. Excuses for delay or non- presentment for paymeut. the bill as payer, or to some person authorized to pay or refuse payment on his behalf if with the exercise of reasonable diligence such person can there be found. (4.) A bill is presented at the proper place : — (a.) Where a place of payment is specified in the bill and the bill is there presented, (b.) "Where no place of payment is specified, but the address of the drawee or acceptor is given in the bill, and the bill is there presented, (e.) AVhere no place of pa^-ment is specified and no address given, and the bill is presented at the drawee's or acceptor's place of business if known, and if not, at his ordinary residence if known, (d.) In any other ease if presented to the drawee or acceptor wherever he can be found, or if presented at his last known place of business or residence. (5.) "Where a bill is presented at the proper place, and after the exercise of reasonable diligence no person authorized to pay or refuse paj'ment can bo found there, no further presentment to the drawee or acceptor is required. (G.) Where a bill is drawn upon, or accejjted by two or more persons who are not partners, and no place of pay- ment is specified, presentment must be made to them all. (7.) Where the drawee or acceptor of a bill is dead, and no place of payment is specified, presentment must he made to a personal representative, if such there be, and with the exercise of reasonable diligence he can be found (»). (8.) AVhere authorized by agreement or usage a present- ment through the post ofiice is sufficient. 46. (1.) Delay in making presentment for payment is excused when the delay is caused by circumstances beyond the control of the holder, and not imputable to his default, misconduct, or negligence. When the cause of delay ceases to operate presentment must be made with reasonable dili- gence. (2.) Presentment for payment is dispensed with, — (a.) AMiere, after the exercise of reasonable diligence, presentment, as required by this act, cannot be effected. The fact that the holder has reason to believe that the bill will, on presentment, be dishonoured, does not dispense with the necessity for presentment, (b.) Where the drawee is a fictitious person. (c.) As regards the drawer where the drawee or acceptor is («) The case of the acceptor having become bankrupt is not dealt with. It is presumed, however, the presentment would still have to be made to him. As to i)rcsentment of notes, see an/', p. 31.j. 45 & 46 Vict. c. 61. 789 not bound, as between liimself and the drawer, to accept or pay the bill, and the drawer has no reason to beliovo that the bill would be paid if presented. (d.) As regards an indorsor, where the bill was accepted or made for the accommodation of that indorser, and he has no reason to expect that the bill would be paid if pre- sented. (e.) By waiver of presentment, express or implied. 47. (1.) A bill is dishonoured by non-payment (a) when Dishonour by it is duly presented for pa^nnent and payment is refused or °^J|^"^^^^'" cannot be obtained, or (b) when presentment is excused and the bill is overdue and unpaid. (2.) Subject to the provisions of this act (x), when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer and indorsers accrues to the holder. 48. Subject to the provisions of this act (y), when a bill has Notice of been dishonoured by non-acceptance or by non-payment, '^^'^^^g""^ ^j notice of dishonour must be given to the drawer and each ^Q^.^otl^e^ indorser, and any drawer or indorser to whom such notice is not given is discharged ; Provided that — (1.) Where a bill is dishonoured by non-acceptance, and notice of dishonour is not given, the rights of a holder in due course subsequent to the omission, shall not be prejudiced by the omission. (2.) Where a bill is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be necessary to give notice of a subsequent dishonour by non-payment unless the bill shall in the meantime have been accepted. 49. Notice of dishonour in order to be valid and effectual Tailes as to must be given in accordance with the following rules : — honour (1.) The notice must be given by or on behalf of the holder, or by or on behalf of an indorser who, at the time of giving it, is liimself liable on the bill. (2.) Notice of dishonour may be given by an agent either in his own name, or in the name of any party entitled to give notice whether that party be his principal or not. (3.) AVhere the notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all jn-ior indorsers who have a right of recourse against the party to whom it is given. (4.) Where notice is given by or on behalf of an indorser entitled to give notice as hereinbefore provided, it enures for the benefit of the holder and all indorsers subsequent to the party to whom notice is given. (5.) The notice may be given in writing or by personal communication, a"nd may be given in any terms which (x) See sects. Co— C8. (jj) See sect. 50. 790 SUPPLEMENT. sufficientl}^ identify tlio bill, and intimate that tlie bill has been dishonoured by non-accej^tanee or non-payment. (6.) The return of a dishonoured bill to the drawer or an indorser is, in point of form, deemed a sufficient notice of dishonour. (7.) A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the bill shall not vitiate the notice unless the i^arty to whom the notice is given is in fact misled thereby. (8.) Where notice of dishonour is required to be given to any person, it may be given either to the i:)arty himself, or to his agent in that behalf (y). (9.) Where the drawer or indorser is dead, and tlie party giving notice knows it, the notice must be given to a personal representative if such there bo, and with the exercise of reasonable diligence he can be found. (10.) Where the drawer or indorser 'is bankrupt, notice may be given either to the party himself or to the trustee. (11.) Where there are two or more drawers or indorsers who are not partners, notice must be given to each of them, unless one of them has authority to receive such notice for the others. (12.) The notice may be given as soon as the biU is dis- honoured and must be given within a reasonable time thereafter. In the absence of special circumstances notice is not deemed to have been given within a reasonable time, unless, — (a.) where the person giving and the person to receive notice reside in the same place, the notice is given or sent off in time to reacli the latter on the clay after the dishonour of the bill. (b.) where the person giving and the person to receive notice reside in different places, the notice is sent off on the day after the dishonour of the bill, if there be a post at a convenient hour on that day, and if there be no such post on that day then by the next post thereafter (z). (13.) Where a bill when dishonoured is in the hands of an agent, he may either himself give notice to the parties liable on the bill, or he may give notice to his principal. If he give notice to his principal, he must do so within the same time as if he were the holder, and the principal ((/) A ' ' referee in case ' ' of need does not appear to be an agent for an indorser for this purpose. See In re Leeds Bankhuj Co., Ex pari e Trail ffe, L. R., 1 Eq. 1. (:) See as to clulace of business or residence of some person other than the draAvee, has been dishonoured by non-acceptance, it must be protested for non-payment at the place Avhere it is expressed to be pay- able, and no further presentment for payment to, or demand on, the drawee is necessary. (7.) A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify — (a.) The person at whose request the bill is protested : (b.) The place and date of protest, the cause or reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found. (8.) AVhere a bill is lost or destroyed, or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof {e). (9.) Protest is dispensed with by any circumstance which would dispense with notice of dishonour (/). Delay in noting (t) See further as to lo.st bills, sects. 69, 70. (/) Soft. r.o. 45 & 46 Vict. c. 61. 793 or protesting is oxc-used wlieu tlie delay is caused Ly circuiu- stanees beyond the control of the holder, and not imputable to his default, misconduct, or negligence. AVhen the cause of delay ceases to operate the bill must be noted or protested "svith reasonable diligence. 52. (1.) "When a biU is accepted generally presentment for Duties of payment is not necessary in order to render the acceptor bolder as liflblp legaras (2.) When by the terms of a qualified acceptance (^) pre- acceptor, sentment for payment is required, the acceptor, in the absence of an express stipulation to that effect, is not discharged by the omission to present the bill for payment on the day that it matures. (3.) In order to render the acceptor of a bill liable it is not necessary to protest it, or that notice of dishonour should bo given to him. (4.) Where the holder of a bill presents it for payment, he shall exhibit the biU to the person from whom he demands payment, and when a bill is j)aid the holder shall forthwith deliver it up to the party paying it. Liabilities of Parties. 53. (1.) A bill, of itself, does not operate as au assign- Funds in ment of funds in the hands of the drawee available for the J{J°^gg°^ pajTiient thereof, and the drawee of a bill who does not accept *^ ^^ as required by this act is not liable on the instrument. This sub-section shall not extend to Scotland. (2.) In Scotland where the drawee of a bill has in his hands funds available for the payment thereof, the bill_ operates as an assignment of the sum for which it is di-awn in favour of the holder, from the time when the bill is presented to the drawee. 54. The acceptor of a bill, by accepting it — Liability of (1.) Engages that he will pay it according to the tenor of his acceptor. acceptance : (2.) Is precluded from denying to a holder in due course :_ (a.) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the biU; (b.) In the case of a bill payable to drawer's order, the then capacity of the drawer to indorse, but not the genuineness or validity of his indorsement ; (c.) In the case of a bill payable to the order of a third person, the existence of the payee and his then capacity to indorse, but not the genuineness or validity of his indorsement. (-7) See sects. 19, 44. 794 SUPPLEMENT. Liability of drawer or indorscr. Stranger signing bill liable as in- dorscr. Measure of damages against par- ties to dis- lionoured bill. 55. (1.) The drawer of a bill by drawing it — (a.) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dis- honoured he will compensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken ; (b.) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. (2.) The indorser of a bill by indorsing it— (a.) Engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dis- honoured he will compensate the holder or a subseqiient indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken ; (b.) Is precluded irom denying to a holder in due course the genuineness and regularity in all respects of the di-awer's signature and all previous indorsements; (c.) Is precluded from denying to his immediate or subse- quent indorsee that the bill was at the time of his indorsement a valid and subsisting bill, and that he had then a good title thereto. 66. Where a person signs a bill otherwise than as drawer or acceptor, he thereby incurs the liabilities of an indorser to a holder iu due course. 67. AVhere a bill is dishonoured, the measure of damages, whicli shall be deemed to be liquidated damages, shall be as follows : (1.) The holder may recover from any party liable on the bill, and the drawer who has been compelled to pay the bill may recover from the acceptor, and an indorser who has been, compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser — (a.) The amount of the bill: (b.) Interest thereon from the time of presentment for payment if the bill is payable on demand, and from the maturity of the bill in any other case : (c.) The expenses of noting, or, when protest is neces- sary, and the protest has been extended, the expenses of protest. (2.) In tho case of a bill which has been dishonoured abroad, in lieu of the above damages, the holder may recover from the drawer or an indorser, and tlie draAver or an indorser who has been compelled to pay the bill may recover from any party liable to him, the amount of the re-exchange (A) with interest thereon until tlie time of payment. (/() E,c-exchange is the difference iu the value of a bill occasioned by its being dishonoured in a foreign countiy iu which it was payable. The 45 & 46 Vict. c. 61. 795 (3.) Where by this act interest may be recovered as damages, siicli interest may, if justice reqiiire it, be witlilield wholly or in j)nvt, and where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper. 58. (1.) Where the holder of a bill payable to bearer Transferor by- negotiates it by delivery without indorsing it, he is called a delivery and <( + „ 4? -u 1 T )) o 7 transferee. " transieror by dellvcr3^ (2.) A transferor by delivery is not liable on the instru- ment. (3.) A transferor by delivery who negotiates a bill thereby warrants to his immediate transferee being a holder for value that the biU is what it purports to be, that he has a right to transfer it, and that at the time of transfer he is not aware of any fact which renders it valueless (?'). Discharge of Bill. 59. (1.) A bill is discharged by pajonent in due course by Payment in or on behalf of the drawee or acceptor. *^l">^i° course. " Payment in due course " means paj^ment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective (A-). (2.) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but (a.) where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re- issue the bill. (b.) where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party pajdng it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorse- ments, and again negotiate the bill. (3.) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged. 60. AVhen a bill payable to order on demand is cbawn on a Banker pay- banker, and the banker on whom it is drawn pays the bill in ing demand draft whereon existence and amount of it depend on the rate of exchange between the two countries. Byles on Bills, p. 418, 13th edit. (/) For definition of the terms "delivery" and "bearer," and for "holder" and "value," sec sect. 2; and see further as to the trans- feror's liability, Grant, p. 343. (/l) Payment to a person claiming through a forged indorsement docs not discharge the payer (see sect. 24), except in the case mentioned in the next section. 796 SUPPLEMENT. indorsement is forged. Acceptor the holder at matvirity. Express waiver. Cancellation. Alteration of bill. good faith and iu tlie ordinary course of business, it is not incumbent on tlie banker to show that the indorsement of the payee or any subsequent indorsement "^as made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority (tn). 61. 'WTien the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is dis- charged. 62. (1.) When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor the bill is discharged. The renunciation must be in tvriting («), unless the bill is delivered up to the acceptor. (2.) The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity ; but nothing in this section shall affect the rights of a holder in due course without notice of the renunciation. 63. (1.) "Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged. (2.) In like manner any party liable on a bill may be dis- charged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged. (3.) A cancellation made imintentionally, or under a mis- take, or without the authority of the holder, is inoperative ; but where a bill or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority. 64. (1.) AVhere a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers. Provided that, — Where a bill has been materially altered, biit the alteration is not ajiparent, and the bill is in the liands of a holder in duo course, such holder may avail himself of the bill {ill) Tliis enactment, so far as it extend.s to cheques, is similar to 16 & 17 Vict. c. 59, s. 19 (see ante, sect. 22), which act, it must be noticed, is not repealed. See further, sects. 73, 74. {ii) This is new. Formerly not even a wi'iting was reqiiired. Con- eideration for the renunciation need not exist. 45 & 46 Vict. c. 61. 797 as if it had not been altered., and may enforce payment of it according to its original tenour (o). (2.) In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment with- out the acceptor's assent (j;;). Acceptance and Payment for Honour. 65. (1.) Where a bill of exchange has been ^j?-o^fs/e('/(y) for Acceptance dishonour by non-acceptance, or protested for better security, f«r honour and is not overdue, any person, not being a party already ^"P"^'^ protest. liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest, for the honour of any party liable thereon, or for the honour of the person for whose accoxmt the bill is drawn. (2.) A bill may be accepted for honour for part only of the sum for which it is drawn. (3.) An acceptance for honour supra protest in order to be valid must — (a.) be written on the bill, and indicate that it is an accept- ance for honour : (b.) be signed by the acceptor for honour (?•). (4.) "Where an acceptance for honour does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer. (5.) Where a bill payable after sight is accepted for honour, its maturity is calculated from the date of the noting for non-acceptance, and not from the date of the acceptance for honour. 66. (1.) The acceptor for honour of a bill by accepting it Liability of engages that he will, on due presentment, pay the bill accord- acceptor for ing to the tenor of his acceptance, if it is not jiaid by the ^°^^^- drawee, provided it has been duly presented for payment, and protested for non-payment, and that he receives notice of these facts. (2.) The acceptor for honour is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has accepted. (o) This important provision is new. An alteration may, however, be such as to constitute the instrument a new bill, and as such render it void under the Stamp Act for want of a stamp. {p) As to alteration of cheque before this act, see Grant, p. 14 ; and as regards bank notes, see Addendum. [q) As to when noting is equivalent to protest, see sect. 93. (;•) An acceptance for honour supra protest need not be made before a notary public. Payment for honour supra protest, on the other hand, must be. See sect. 68 (3), (4). 798 SUPPLEMENT. Presentment to acceptor for honour. Payment for honour supra protest. 67. (1.) Whei'G a dishonoured bill has been accepted for honour supra protest, or contains a reference in case of need, it must he 2^roteste(l{t) for non-payment before it is presented for payment to the acceptor for honour, or referee in case of need. (2.) "Where the address of the acceptor for honour is in the same place Trhere the bill is protested for non-payment, the bill must be presented to him not later than the day following its maturity; and where the address of the acceptor for honour is in some place other than the place where it was protested for non-pajanent, the bill must be forwarded not later than the day following its maturity for presentment to him. (3.) Delay in presentment or non-presentment is excused by any circumstance which would excuse delay in present- ment for payment or non-presentment for payment (ii). (4.) When a bill of exchange is dishonoured by the acceptor for honour, it must be protested for non-payment by him. 68. (1.) "Where a bill has been protested {t) for non-pay- ment, any person may intervene and pay it supra protest for the honour of any party liable thereon, or for the honour of the person for whose account tlie bill is drawn. (2.) AVhere two or more persons offer to pay a bill for the honour of different parties, the person wdiose payment will discharge most parties to the bill shall have the preference. (8.) Payment for honour supra protest, in order to ojDerate as such and not as a mere voluntary payment, must be attested by a notarial act of honour, which may be appended to the protest or form an extension of it. (4.) The notarial act of honour must be founded on a declaration made by the payer for honour, or his agent in that behalf, declaring his intention to pay the bill for honour, and for whose honour he pays. (5.) Where a bill has been paid for honour, all parties subsequent to the party for whose honour it is paid are dis- chai'ged, but the payer for honour is subrogated for, and succeeds to both the rights and duties of, the holder as regards the party for whoso honour ho pays, and all parties liable to that party. (6.) The payer for honour on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonour is entitled to receive both the bill itself and the protest. If the holder do not on demand deliver them up ho shall bo liable to tlio payer for honour in damages. (7.) Where the holder of a bill refuses to receive payment supra protest ho shall lose his right of recourse against any party who would have been discharged by such payment. {() As to notiug iu lieu of protest, sec scot. 93. {n) See sect. 46. 45 & 46 Vict. c. G1. 799 Lost Instrttments. 69. "Where a bill 1ms been lost before it is overdue, the Holder's person who was the holder of it may aj)ply to the drawer to rig^^t to give him another bill of the same tenor, giving security to f" ,?TJn the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost shall bo found again. If the di-awer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so {x). 70. In any action or proceeding upon a bill, the court or a Action on j udge may order that the loss of the instrument shall not be ^°^* ^^^^• set up, i)rovided an indemnity be given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question (j-). BUI in a Set. 71. (1.) Where a bill is drawn in a set, each part of the Rules as to set being numbered, and containing a reference to the other ®'-'*'^- parts, the whole of the parts constitute one bill (y). (2.) Where the holder of a set indorses two or more parts to ditferent persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has him- self indorsed as if the said parts were separate bills. (3.) Where two or more parts of a set are negotiated to different holders in due course (~), the holder whose title first accrues is as between such holders deemed the true owner of the bill ; but nothing in this sub-section shall affect the rights of a person who in due course accepts or jiays the part first presented to him. (4.) The acceptance may be written on vmj part, and it must be written on one part only. If the drawee accepts more than one part, and such ac- cepted parts get into the hands of different holders in due coiu'se, he is liable on every such part as if it were a separate bill. (5.) "WQien the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be de- livered uj) to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof. (6.) Subject to the preceding rules, where any one part of a bill di-awn in a set is discharged by payment or otherwise, the whole bill is discharged. {x) As to the former law respecting lost cheques and bills, see Grant, p. 89, and as to the loss of bank notes, Grant, p. 3.5o. (y) Foreign bills are frequently drawn in parts. Bvles, p. 393, 13th cd. iz) See sect. 29. 800 SUPPLEMENT. Conflict of Laios. Rules where 72. Where a bill drawn in one country is negotiated, ac- laws conflict, cepted, or payable in another, the rights, duties, and liabili- ties of the parties thereto are determined as follows : (1.) The validity of a bill as regards requisites in form is determined by the law of the place of issue {a), and the validity as regards requisites in form of the supervening contracts, such as acceptance {a), or indorsement {a), or acceptance supra protest, is determined by the law of the place where such contract was made. Provided that — ■ (a.) AVhere a bill is issued out of the United Kingdom it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue : (b.) AVhere a bill, issued out of the United Kingdom, conforms, as regards requisites in form, to the law of the United Kingdom, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold, or become parties to it in the United Kingdom. (2.) Subject to the provisions of this act, the interpretation of the drawing, indorsement, acceptance, or acceptance supra protest of a biU, is determined by the law of the place where such contract is made. Provided that where an inland bill is indorsed in a foreign country the indorsement shall as regards the payer be interpreted according to the law of the United Kingdom. (3.) The duties of the holder with respect to presentment for acceptance or payment and the necessity for or suf- ficiency of a protest or notice of dishonour, or otherwise, are determined by the law of tlie place where the act is done or the bill is dishonoured. (4.) Where a bill is drawn out of but payable in the United Kingdom and the sum payable is not expressed in the currency of the United Kingdom, the amount shall, in the absence of some express stipulation, be calculated according to the rate of exchange for sight drafts at the place of payment on the day the biU is payable. (5.) Where a bill is drawn in one country and is payable in another, the due date thereof is determined according to the law of the place where it is payable. PAPT III. — Cheques ox a Banker. Cheque dc- 73. A cheque is a bill of exchange drawn on a banker pay- fined, able on demand. Except as otherwise provided in this part, the provisions of («) For definition of these tcnns, see sect. 2. 45 & 46 Vict. c. 61. 801 this act applicable to a bill of exchange payable on demand ajiply to a cheque {b). 74. Subject to the provisions of this act (c) — Presentment (1.) Where a cheque is not presented for payment "u-ithiu of cheque for a reasonable time of its issue, and the drawer or the P^y™^^*- person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid and suifers actual damage through the dela}', he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid. (2.) In detemiining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case. (3.) The holder of such cheque as to which such drawer or person is discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge, and entitled to recover the amount from him(f/). 75. The duty and authority of a banker to pay a chec^ue Revocation of drawn on him by his customer are determined b}' — banker's (1.) Countermand of paj-ment : authority. (2.) Notice of the customer's death (e). Crossed Cheques {/). 76. (1.) Where a cheque bears across its face an addition General and of — special cross- (a.) The words "and company" or any abbreviation thereof ings defined, between two parallel transverse lines, either with or without the words " not negotiable " ; or {h) A cheque being thus made equivalent to a bill payable on demand, not merely will those sections which especially deal with such bills (see sects. 36 (3), 45 (2) and 60) apply to cheques, but, it is presumed, all those sections of the act which deal with, and are applicable to, bills g'enerally. For definition of a "bill payable on demand," see sect. 10. The term " banker" is defined by sect. 2. {c) See excuses for Non-preseutment, stated in sect. 46. {d) This section is new and alters the common law. [e) As to the effect of death at common law, see Grant, pp. 85, 88. Notice of an act of bankruptcy by the customer also determines the banker's authority. See sect. 97, by which the bankruptcy laws are preserved. (/) The Crossed Cheques Act of 1876 is repealed by the present act (see second schedule), but its provisions are, with one or two additions, substantially re-enacted by the following sections. For a full discussion on the old law relating to crossed cheques, see Grant, p. 63. The pro- \'isions of this act as to crossed cheques apply also to all dividend warrants, see sect. 95. 802 SUPPLEMENT. Crossing by di'awer or after issue. Crossing a material part of cheque. Duties of banker as to crossed cheques. (b.) Two parallel transverse lines simply, either with or without the words "not negotiable " ; that addition constitutes a crossing, and the cheque is crossed generally. (2.) AVhere a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable," that addition constitutes a crossing, and the cheque is crossed specially and to that banker. 77. (1.) A cheque may be crossed generally or specially by the drawer. (2.) A\Tiere a cheque is uncrossed, the holder (y) may cross it generally or specially (A). (3.) Where a cheque is crossed generally the holder may cross it specially. (4.) AVhere a cheque is crossed generally or specially, the holder may add the words "not negotiable." (5.) Where a cheque is crossed special!}^, the banker to whom it is crossed may again cross it specially to another banker for collection. (6.) "WTiere an uncrossed cheque, or a cheque crossed gene- rally, is sent to a banker for collection, he may cross it spe- cially to himself (A). 78. A crossing authorized by this act is a material part of the cheque ; it shall not be lawful for any person to obliterate or, except as authorized by tliis act, to add to or alter the crossing (?'). 79. (1.) Where a cheque is crossed specially to more than one banker except when crossed to an agent for collection being a banker, the banker on whom it is drawn shall refuse payment thereof. (2.) Where the banker on whom a cheque is drawn which is so crossed nevertheless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or his agent for collection being a banker, he is hable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. Provided that where a cheque is presented for payment which does not at the time of presentment appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as autho- rized by this act, the banker pa^'ing the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be cjuestioned by reason of (ff) The " holder" is defined by scot. 2. (A) These clauses are new. (i) See further as to " alterations," sect. G4. 15 & 4G Vict. c. G1. 803 the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorized by this act, and of payment having been made otherwise than to a banker or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be. 80. "Where the banker, on whom a crossed cheque is drawn, Protection to in good faith and Avithout negligence pavs it, if crossed gene- banker and raUy, to a banker, and if crossed specially, to the banker to ™^^ ^^^""^ whom it,is crossed, or his agent for collection being a banker, cjogged. tlie banker paying the cheque, and, if the checxue has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof. 81. Where a person takes a crossed cheque which bears on Effect of it the words "not negotiable," he shall not have and shall crossing on not be capable of giving a better title to the cheque than that ^° ^^' which the person from whom he took it had. 82. ^Miere a banker in good faith and without negligence Protection to receives payment for a customer of a cheque crossed generally collecting or specially to himself, and the customer has no title, or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such paj-ment. PAET IV.— Promissory Notes (k). 83. (1.) A promissory note is an unconditional promise in Promissoiy writing made by one person to another signed by the maker, ^°*® defined, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer. (2.) An instrument in the form of a note payable to maker's order is not a note within the meaning of this section unless and until it is indorsed by the maker. (3.) A note is not invalid by reason only that it contains also a pledge of collateral secimty, with authority to sell or dispose thereof. (4.) A note which is, or on the face of it purports to be, both made and payable within the British Islands is an inland note. Anj other note is a foreign note (l). 84. A promissory note is inchoate and incomplete until dc- Delivery livery (?n) thereof to the payee or bearer. necessary. 85. (1.) A promissory note mav be made by two or more Joint and ^ " several notes. {k) As regards bank note, see Grant, p. 340. (/) As to inland and foreign bills, see sect. 4. {m) See fin-thcr as to doliveiy, soct.i. 2, 21. .804 SUPPLEMENT. Note payable on demand. Presentment of note for payment. Liability of maker. Application of Part II. to notes. makers, and tliey may be liable thereon jointly, or jointly and severally, according to its tenour. (2.) Where a note runs "I promise to pay," and is signed by two or more persons, it is deemed to be their joint and several note. 86. (1.) Whore a note payable on demand {n) has been indorsed, it must be presented for payment within a reason- able time of the indorsement. If it be not so presented the indorser is discharged. (2). In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particular ease. (3.) Where a note payable on demand is negotiated, it is not deemed to be overdue, for the purpose of affecting the holder with defects of title of which he had no notice, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue. 87. (1.) Where a promissory note is in the body of it made payable at a particular place, it must be presented for payment at that place in order to render the maker liable. In any other case, presentment for payment is not necessary in order to render the maker liable. (2.) Presentment for payment is necessary in order to render the indorser of a note liable. (3.) AVhere a note is in the body of it made payable at a particular place, presentment at that place is necessary in order to render an indorser liable ; but when a place of pay- ment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a presentment to the maker elsewhere, if sufficient in other respects, shall also suffice (o). 88. The maker of a promissory note by making it — (1.) Engages that he will pay it according to its tenour ; (2.) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. 89. (I.) Subject to the provisions in this part and, excejit as by this section provided, the provisions of this act relating to bills of exchange apply, with the necessary modifications, to promissory notes. (2.) In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer's order. (3.) The following provisions as to bills do not apply to notes ; namely, provisions relating to — (a.) Presentment for acceptance ; (w) Sec sect. 10. {o) See Grant, p. lOG ; and sec sect. 52. 45 & 46 Vict. o. G1. 805 (b.) Acceptance ; (c.) Acceptauce supra protest ; (d.) Bills iu a set. (4.) Wliere a foreign note is dishonoured, protest thereof is unnecessary. PAET y. — SuPrLEMEXTARY. 90. A thing is deemed to be done in good faith, within the Good faith, meaning of this act, where it is in fact done honestly, whether it is done negligently or not {p). 91. (1.) Where, by this act, any instrument or writing is Signature, required to be signed by any person, it is not necessary that he should sign it with his own hand, but it is sufficient if his signature is written thereon by some other person by or under his authority. (2.) In the case of a corporation, where, by this act, any instrument or writing is required to be signed, it is sufficient if the instnmient or writing be sealed with the corporate seal. But nothing in this section shall be construed as requiring the bill or note of a corporation to be under seal(y). 92. Where, by this act, the time limited for doing any act Computation or thing is less than three days, in reckoning time non-business of time, days are excluded (r). " Non-business days," for the purposes of this act, mean — (a.) Sunda}', Good Friday, Christmas Day: (b.) xi bank holiday under the Bank Holidays Act, 1871, or acts amending it : (c.) A day appointed by royal proclamation as a public fast or thanksgiving day. Any other day is a business day. 93. For the purposes of this act, where a bill or note is When noting required to be protested within a specified time or before some equivalent to further proceeding is taken, it is sufficient that the bill has protest. been noted for protest before the expiration of the specified time or the taking of the proceeding ; and the formal protest may be extended at any time thereafter as of the date of the noting (s). 94. Where a dishonoured bill or note is authorized or Protest when required to be protested, and the services of a notary cannot notary not be obtained at the place where the bill is dishonoured, any accessible, householder or substantial resident of the place may, in the presence of two witnesses, give a certificate, signed by them, attesting the dishonour of the bill, and the certificate shall iu all respects operate as if it were a formal protest of the bill. {p) See on this subject, Grant, (r) See sects. 49 (12), 67 (2). p. 355. (.v) See sects. 65 to 68. {q) See (irant, pp. 32, 33. c;. 3 G 806 SUPPLEMENT. Dividend warrants may be crossed. Repeal. Saving's. 33 & 34 Yict. c. 97. 25 & 26 Vict. 0. 89. Saving of summary diligence ia Scotland. Construction ■with other acts, &c. Parol evi- dence allowed in certain judicial pro- The form given in Scliedulo 1 to tliis act may "be nsed Trith necessary modifications, and if xised shall he sufficient. 95. The provisions of this act as to crossed cheques shall apply to a "^arrant for payment of dividend {t). 96. The enactments mentioned in the second schedule to this act are hereby repealed as from the commencement of this act to the extent in that schedule mentioned. Provided that such repeal shall not affect anything done or suffered, or any right, title, or interest acquired or accrued before the commencement of this act, or any legal proceed- ing or remedy in respect of any such thing, right, title, or interest. 97. (1) The rules in bankruptcy relating to bills of ex- change, promissory notes, and cheques, shall continue to apply thereto notwithstanding anything in this act contained. (2) The rules of common law inclitding the law merchant, save in so far as they are inconsistent with the express pro- visions of this act, shall continue to apply to bills of exchange, p»romissory notes, and cheques. (3) Nothing in this act or in any repeal effected thereby shall affect — (a) The provisions of the Stamp Act, 1870 (u), or acts amending it, or any law or enactment for the time being in force relating to the revenue : (b) The provisions of the Companies Act, 1862, or acts amending it, or any act relating to joint stock banks or companies {x) : (c) The provisions of any act relating to or confirming the privileges of the bank of England or the bank of Ire- land respectively (y) : (d) The validity of any usage relating to dividend war- rants, or the indorsements thereof. 98. Nothing in this act, or in any repeal effected thereby, shall extend or restrict, or in any way alter or affect, the law and practice in Scotland in regard to summary diligence (;:). 99. AVhere any act or document refers to any enactment repealed by this act, the act or document shall be construed, and shall operate, as if it referred to the corresponding provi- sions of this act. 100. In any judicial proceeding in Scotland, any fact relating to a bill of exchange, bank cheque, or promissory note, which is relevant to any question of liability thereon, may be proved (f) The Crossed Cheques Act, 1876, merely applied to dividend war- rants of the Banks of England and Ireland. See Grant, p. 68. (u) See Grant, Appendix, p. 643. (x) See Grant, p. 639. (y) See Appenc&x, p. 569. (z) See 12 Geo. 3, c. 72. ss. 37, 39—43 : 1 & 2 Vict. o. 114, ss. 1, 9. 45 & 4G Vict. c. 61. 807 by parole evidence : Provided tliat this enactment shall not in ceedings in anj' vraj affect the existing law and i^ractiee whereby the Scotland, party who is, according to the tenour of any bill of exchange, bank cheque, or promissory note, debtor to the holder in the amount thereof, may be required, as a condition of obtaining a sist of diligence, or suspension of a charge, or threatened charge, to make such consignation, or to find such caution, as the court or judge before whom the cause is depending may recpiire. This section shall not apply to anj^ case where the bill of exchange, bank cheque, or promissory note has undergone the sesennial prescription. SCHEDULES. FiKST Schedule. Fonn of protest which may be used when the services of a notary cannot Sect. 94. be obtained. Know all men that I, A. B. [householder], of , in the county of , in the United Kingdom, at the request of C. D., there being no notary piiblic available, did on the day of , 188 , at , demand payment [or acceptance] of the bill of exchange hereunder written, from E. I'., to which demand he made answer [state answer, if any] wherefore I now, in the presence of G. H. and /. E., do protest the said bill of exchange. (Signed) A. B. j' T^' \ "Witnesses. N.B. — The bill itself should be annexed, or a copy of the bill and all that is wi'itten thereon should be underwritten. Second Schedi'le. Enactments eepealed. ■ Session and Cliapter. 9 Will. 3, c. 17 . 3 & 4 Anne, c. 8. 17 Geo. 3, c. 30 39 & 40 Geo. 3, c. 42 48 Geo. 3, c. 88 ... Title of Act and Extent of Repeal. An act for the better payment of inland bills of exchange. An act for giving like remedy upon promissorj* notes as is now used upon bills of exchange, and for the better payment of inland bUls of exchange. An act for further restraining the negotiation of promissory notes and inland bills of exchange imder a limited sum within that part of Great Britain called England. An act for the better observance of Good Friday in certain cases therein mentioned. An act to restrain the negotiation of promissory notes and inland bills of exchange under a limited sum in Eugland. .3 G 2 808 SUPPLEMENT. Second Schedule — fontlnucd. Session and Chapter. 1 & 2 Geo. 4, c. 78 7 & 8 Geo. 4, c. 15 9 Geo. 4, c. 24.., 2 & 3 Will. 4, c. (18 C & 7 Will. 4, c. 58 8 & 9 Vict. c. 37 . . in part. 19 & 20 Vict. c. 97 in part. 23 & 24 Vict. c. Ill in part. 34 & 35 Vict. c. 74 39 & 40 Vict. c. 81 41 & 42 Vict. 0. 13 Title of Act and Extent of Repeal. An act to regulate acceptances of bills of exchange. An act for declaring the law in relation to bills of exchange and promissory notes becoming pay- able on Good Friday or Christmas Day. An act to repeal certain acts, and to consolidate and amend the laws relating to bills of exchange and promissory notes in Ireland, in part ; that is to say, Sections two, four, seven, eight, nine, ten, eleven. An act for regulating the protesting for non-pay- ment of bills of exchange drawn payable at a place not being the place of the residence of the drawee or drawees of the same. An act for declaring the law as to the day on which it is requisite to present for payment to acceptor, or acceptors suprii protest for honour, or to the referee or referees, in case of need, bills of ex- change which have been dishonoured. An act to regidate the issue of bank notes in Ire- land, and to regulate the repayment of certain sums advanced by the governor and company of the bank of Ireland for the public service, in part ; that is to say. Section twenty-four. The Mercantile Law Amendment Act, 1856, in part ; that is to say. Sections six and seven. An act for granting to her majesty certain duties of stamps, and to amend the laws relating to the stamp duties, in part ; that is to say, Section nineteen. An act to abolish days of grace in the -case of bills of exchange and promissory notes payable at sight or on presentation. The Crossed Cheques Act, 1876. The Bills of Exchange Act, 1878. Enactment repealed as to Scotland. 19 & 20 Vict. c. GO in part. The Mercantile Law (Scotland) Amendment Act, 1856, in part ; that is to say. Sections ten, eleven, twelve, thirteen, foiu'teen, fifteen, and sixteen. ( 809 ) BILLS OF SALE ACT (1878) AMENDMENT ACT. 1882. 4.5 & -16 Vict. c. 4.'}. A}i Act to amend the Bills of Sale Act, 1878 («). [18th August, 1882.] Whereas it is expedient to amend the Bills of Sale Act, 41 & 42 Vict. 1878: c. 31. Be it enacted, &c., as follows : 1. This act may be cited for all purposes as the BiUs of Short title. Sale Act (1878) Amendment Act, 1882 ; and this act and the Bills of Sale Act, 1878, may be cited together as the Bills of Sale Acts, 1878 and 1882. 2. This act shall come into operation on the 1st day of Commence- November, 1882, which date is hereinafter referred to as the ment of act. commencement of this act. 3. The Bills of Sale Act, 1878, is hereinafter referred to as Construction "the principal act," and this act shall, so far as is consistent ^* ^°*- •with the tenor thereof, be construed as one with the principal ^^ ^ ^^ ^^'^''• act ; but unless the context otherwise requires shall not apply to any bill of sale duly registered before the commencement of this act so long as the registration thereof is not avoided by non-renewal or otherwise. The expression "bill of sale," and other expressions in this act, have the same meaning as in the principal act, except as to bills of sale or other documents mentioned in section four of the principal act, which may be given otherwise than by way of security for the payment of money, to which last-men- tioned bills of sale and other documents this act shall not apply (i). 4. Every bill of sale shall have annexed thereto or written Bill of sale to thereon a schedule containing an inventory of the personal have schedule chattels comprised in the bill of sale ; and" such bill of sale, "f^ached^^ save as hereinafter mentioned, shall have effect only in respect thereto, of the personal chattels specifically described in the said schedule ; and shall be void, except as against the grantor, in respect of any personal chattels not so specifically described. [a) Since the note on the draft bill of this act (see Grant, p. 565) was printed the bill has become law. Certain amendments and alterations having been made, however, it is thought advisable to insert the act in its entirety. [h] See, also, sect. 17. 810 SUPPLEMENT. Bill of sale 5. Save as hereinafter mentioned, a bill of sale shall be void, not to affect except as against the grantor, in respect of any personal after -acquired chattels specifically described in the schedule thereto of which property. ^-^^ grantor was not the true owner at the time of the execution of the bill of sale. Exception as 6. Nothing contained in the foregoing sections of this act to certain shall render a bill of sale void in respect of any of the follow- things. -^g things ; (that is to say), (1.) Any growing crops separately assigned or charged where such crops were actually growing at the time when the bill of sale was executed. (2.) Any fixtures separately assigned or charged, and any plant, or trade machinery where such fixtures, plant, or trade machinery are used in, attached to, or brought upon any land, farm, factory, workshop, shop, house, ware- house, or other place in substitution for any of the like fixtures, plant, or trade machinery specifically described in the schedule to such bill of sale. Bill of sale 7. Personal chattels assigned under a bill of sale shall not with power to \,q liable to be seized or taken possession of by the grantee seize except ^^^, ^^-^^^ than the following causes :— events to be (!•) If the gi'antor shall make default in payment of the sum void. or sums of money thereby secured at the time therein provided for pajonent, or in the performance of any cove- nant or agreement contained in the bill of sale and necessary for maintaining the security ; (2.) If the grantor shall become a bankrupt, or suffer the said goods or any of them to be distrained for rent, rates, or taxes ; (3.) If the grantor shall fraudulently either remove or suffer the said goods, or any of them, to be removed from the premises ; (4.) If the grantor shall not, without reasonable excuse, upon demand in writing by the grantee, produce to him his last receipts for rent, rates, and taxes ; (5.) If execution shall have been levied against the goods of the grantor under any judgment at law : Pro\ided that the grantor may within five days from tlio seizure or taking possession of any chattels on account of any of the above-mentioned causes, apply to the High Com-t, or to a judge thereof in chambers, and such court or judge, if satisfied that by payment of money or otherwise the said cause of seizure no longer exists, may restrain the grantee from removing or selling the said chattels, or may make such other order as may seem just. Bill of sale to 8. Every bill of sale shall be duly attested, and shall be bo void unless registered under the principal act within seven clear days recdstcrod" f^fter the execution thereof, or if it is executed in any place 45 & 46 Vict. c. 40. 811 out of England tliou within seven clear clays after the time at which it would in the ordinary course of post arrive in England if posted immediately after the execution thereof ; and shall truly set forth the consideration for which it was given; otherwise such bill of sale shall be void in respect of the personal chattels comprised therein (c). 9. A bill of sale made or given by way of security for the Form of bill payment of money by the grantor thereof shall be void unless of sale, made in accordance with the form in the schedule to this act annexed. 10. The execution of every bill of sale by the grantor shall Attestation. be attested by one or more credible witness or witnesses, not being a i^arty or parties thereto. So much of section ten of the principal act as requires that the execution of every bill of sale shall be attested by a solicitor of the Supreme Court, and that the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting witness, is hereby repealed. 11. Where the affidavit (which under section ten of the Local regis- principal act is required to accompany a bill of sale when tration of con- presented for registration) describes the residence of the t^'^*^ °* °^^ person making or giving the same or of the person against whom the process is issued to be in some place outside the London bankruptcy district as defined by the Bankruptcy 32 & 33 Vict. Act, 1869, or where the biU of sale describes the chattels c. 71, s. 60. enumerated therein as being in some place outside the said London bankruptcy district, the registrar under the j)rincipal act shall forthwith and within three clear days after registra- tion in the principal registry, and in accordance with the prescribed directions, transmit an abstract in the prescribed form of the contents of such bill of sale to the county court registrar in whose district such places are situate, and if such places are in the districts of different registrars to each such registrar. Every abstract so transmitted shall be filed, kept, and indexed by the registrar of the county court in the prescribed manner, and any person may search, inspect, make extracts from, and obtain copies of the abstract so registered in the like manner and uj)on the like terms as to jDayment or other- wise as near as may be as in the case of bills of sale registered by the registrar under the principal act. 12. Every bill of sale made or given in consideration of Bill of sale any sum under thirty pounds shall be void. under 30?. to 13. All personal chattels seized or of which possession is ^^ ■^°i^- taken after the commencement of this act, under or by virtue Chattels not of any bill of sale (whether registered before or after the *° be removed {r) See Grant, p. 565. 812 SUPPLEMENT, Bill of sale not to protect chattels against poor and parochial rates. Repeal of part of Bills of Sale Act, 1878. Inspection of registered bills of sale. Debentures to wliich act not to apply. Extent of act, commencement of this act), shall remain on the premises Tvhere they were so seized or so taken possession of, and shall not be removed or sold until after the expiration of five clear days from the day they were so seized or so taken posses- sion of. 14. A hill of sale to which this act applies shall be no pro- tection in respect of personal chattels included in such bill of sale which but for such bill of sale would have been liable to distress under a warrant for the recovery of taxes and poor and other parochial rates. 15. The eighth and the twentieth sections of the principal act, and also all other enactments contained in the principal act which are inconsistent with this act are repealed, but this repeal shall not affect the validity of anything done or suf- fered under the principal act before the commencement of this act. 16. tSo much of the sixteenth section of the principal act as enacts that any person shall be entitled at all reasonable times to search the register and every registered bill of sale upon payment of one shilling for every copy of a bill of sale inspected is hereby repealed, and from and after the com- mencement of this act any person shall be entitled at all reasonable times to search the register, on payment of a fee of one shilling, or such other fee as may be prescribed, and subject to such regulations as may be prescribed, and shall be entitled at all reasonable times to inspect, examine, and make extracts from any and every registered bill of sale without being required to make a written application, or to sjoecify any particulars in reference thereto, upon payment of one shilling for each bill of sale inspected, and such pay- ment shall be made by a judicatiire stamp: provided that the said extracts shall be limited to the dates of execution, registration, renewal of registration, and satisfaction, to the names, addresses, and occupations of the parties, to the amount of the consideration, and to any further prescribed particulars. 17. Nothing in this Act shall apply to any debentures issued by any mortgage, loan, or other incorjiorated company, and secured iipon the capital stock or goods, chattels, and effects of such company. 18. This Act shall not extend to Scotland or Ireland. SCHEDULE. Eor.M OF Bill of Sale. This Indentuee made the of the one part, and C. D. of in consideration of the sum of £ duv of , between ^L. B. of of the other part, witnesseth that now paid to ^. B. by C. J}., the 45 i. ANTE-DATING BILL, 777. «' AT SIGHT," BILL PAYABLE AT. (Sec On Demand.) equivalent to bill payable on demand, 776. BANK HOLIDAY, 777, 805. BANK OF ENGLAND OR IRELAND, privileges remain the same, 866. BANKER, definition of the word, 77^5. lien on customers' bills, 7X1. revocation of authority of, SOI. paying draft with forged indorsement, 795. paying cheque when customer's signature is forged, 780. paying cro.ssed cheques, 802. protection to bankers, 803. protection to, collecting, ib. INDEX TO SUPPLEMENT. 817 BANKRUPT, definition of, 773. presentment for acceptance to, 78G. for payment, 788. notice of dishonour to, 790. saving of bankruptcy laws, 806. BEARER, definition of, 773. bill to, 782. how negotiated, ib. what bills are payable to, 775. indorsement in blank, ib., 783. fictitious payee, 775. liability of transferor to bearer, 795. BETTER SECURITY, 797. BILL OF EXCHANGE, defined, 773, 774, 800. foreign bill, 77-1. inland bill, ib. form and interpretation of, 774. what bills are negotiable, 775. dating, 776. time of payment, 777, 805. acceptance of, 778. (6Ve Acceptance.) deUvery of, 779. {See Delivery.) pai-ties to, 780. [See Capacity.) consideration for, 781. (<%«; Consideeation.) accommodation bill, ib. negotiation of, 782. {See Indoesement.) overdue, 784, 801. duties of holder, 785. {See Holdee.) presentment, ib. {See Peesentment.) notice of dishonour, 789. {See Notice.) noting bill, 791, 805. liabilities of pai'ties, 793. {See Acceptoe ; Indoeser ; Drawee ; Transferor.) discharge of, 795. acceptance and payment for honour, 797. {See Acceptor.) lost bills, 799. bills in a set, ib. cancellation of, 796. conflict of laws relating to, 800. biU payable on demand, 776. cheque is a bill payable on demand, 800. stamp laws relating to, saved, 806. BILLS OF SALE ACT, 1882.. 809. BLANK, signatiu'es, 779. no date, 776. indorsement in, 783. CANCELLATION OF BILL, 796. CAPACITY OF PARTIES, 780. signature essential to liability, ib. forged or unauthorized signature, ib. agent, ib,, 783. S18 INDEX TO SUPPLEMENT. CASE OF NEED, 778. presentment to acceptor, 798. CHEQUE, definition of, 800. sections applicable to, 801. presentment for payment to charge drawer, ib. effect of delay, ib. right of holder as against banker, lb. mode of presentment, 787. to charge indorser, ib. revocation of banker's authority to pay, 801. crossed cheques, ib., 806. duties of banker relating to, 802. "not negotiable," 801, 802. protection to banker, 803. collecting banker, ib. effect of, on holder, ib. crossing, material part, 802. forged indorsement on, 795. when overdue, 784. equities attaching, ib. discrepancy between words and figures, 776. forgery of drawer's signature, 780. banker's lien on, 781. payment, 795. cancellation, 796. COMPANY, 780, 806. COMPUTATION, of time of paj-ment of bills, 777. for acceptance, 778. of sum payable, 776. non-business days excluded, 805. CONDITIONAL, bill, 774. indorsement, 783. acceptance, 778, 787. delivery, 779. CONFLICT OE LAWS, 800. CONSIDERATION, what is A'aluable consideration, 781. antecedent debt, ib. holder of bUl having lien over, accommodation bill, ib. illegal, when it affects holder, 782. presumption as to, ib. COPY OF FOREIGN BILL, 783. CORPORATION, capacity as regards bills, 780. is included in "person," 774. COUNTERMAND of payment of cheque, 801 . CROSSED CHEQUES, 801. (.SV.. Cheques.) INDEX TO SUPPLEMENT. 819 DAMAGES, measure of, against parties to a bill, 79 1. DATE, omission of, 776. not an essential element, lb. authority to fill in, ib., 119. ante- and post-dating, 777. bill "afterdate," 742. presentment of biU " after date," 787. computation of time of payment, 777, 797, 800. alteration of, material, 797. DAYS or GRACE, 777. on what bills allowed, ib. »_ proviso respecting, ib. DEATH, of drawer of cheque revokes banker's authority, 801. its effect as regards presentment, 786, 788. and "notice of dishonour," 790. DEBT, antecedent, is a valuable consideration for bill, 781. DEFINITIONS of words used in act, 773. DELIVERY, contract incomplete till, 773, 779. exception, 779. what constitutes, ib. may be conditional, 779. effect of, conditional, 780. presumption as to, ib. bill to bearer passes by, 782. transferor by, 795. his liability, ib. what he warrants, ib. DEMAND, BILLS PAYABLE ON, what bills are, 776. cheque is, 800. {See Cheque.) when overdue, 784. if overdue subject to equities, ib. presentment of, 787. banker pajnng, where indorsement forged, 795. not entitled to days of grace, 777. DESTRUCTION OF BILL, 792. DISCmVRGE OF BILL, 793. payment in due course, ib. what it means, ib. when payment will not be a, ib. acceptor becoming holder at maturity, 794. express waiver, ib. cancellation, ib. alteration, ib. DISHONOUR, by non-acceptance, 786. {See Acceptance.) by non-payment, 793. 820 INDEX TO SUPPLEMENT. DISHONOUR— row t In iied. by acceptor for honour, 797. notice of, 793. effect of non-notice, ib. riiles as to, ib. excuses for non-notice and delay, 783. DIVIDEND WARRANT, may be crossed, 806. usage relating to, retained, ib. DRAWEE. (&e AccEPTOE.) addi'ess to, 77o. may be to t\^:o or more, ib. but not in the alternative, ib. duties of holder towards, 793. liability of, ib. {See Acceptoe.) bill does not operate as an assignment of funds in hands of, ib. payment by, 795. time for drawee to elect to accept, 786. bank. {See Cheque.) DRAWER, where same person as drawee, 775. optional stipulations by, 778. liability of, 794. and engagements, ib. measure of damages against, ib. duties of holder towards, 785, payment of bill by, 795. his remedies, ib. of cheque, 800. {See Ciieque.) death of, revokes banker's authority, 801. liability of, ib. the effect of non-presentment as regards, ib. DUE DATE, 777. {See Date.) DURESS, 782. EQUITIES on overdue bills, 784. EXCHANGE (RATE OF), 800. EXECUTORS, presentment to, 786, 788. notice of dishonour to, 793. FAST DAY (PUBLIC), 777, 805. FEAR, 782. FICTITIOUS PARTY, bill addressed to, 775. drawee, 791. payee, 775. signing in assumed name, 780. force, 782. INDEX TO SUPrT.E^fENT. 821 rOREIGN BILL, definition of, 774. protesting, 742, 794. conflict of laws, 800. FOREIGN CrRRENGY, computation of amount pii.yable, 800. FOREIGN LAWS, when given effect to, SCO, FOREIGN NOTE, 803. definition of, U). protest not necessary, 80o. FORGERY, effect of, generally, 780. banker pavina* demand draft -whereon is a forged indorsement, 795. FRALT), 782. FUNDS IN DRAWEE'S HANDS, bill does not operate as as.sign- ment of, except in Scotland, 793. (.SV/- Scoxl.a.nd.) GENERAL ACCEPTANCE, 778, 793. {See Acceptaxce.) GOOD FRIDAY, 777, 805. GRACE, DAYS OF, 777. HOLDER, definition of, 773. for value, 781. in due course, 782. title of, ib. of an accommodation bill, 781. presumption of value and bnnu fide, 782. rights of, 785. general duties of, ib. acceptor becoming, ib., 796. HOLIDAY, bank or public, 777, 805. HONOL'R. [See Acceptance for Hoxoue.) acceptance or payment for, 797. ILLEGALITY of consideration and its effect, 782. INCOMPLETE BILL, 779. INDORSEE, included in "holder," 773. provisions relating to payee, apply to, 784. misdescription of, 783. how he should sign, ih. bill payable to two or more, Ih. effect of restrictive indorsement upon, 784. O. 3 H 822 INDEX TO supple:\[ent. INDORSEMENT, clefmition of, 773. must be completed by delivery, ib., 779. ■with optional stipulation, 778, 779. as agent, 780, 781, 783. bill payable to order, negotiated by, 782. rights of person taking such bill without, il). requisites of a valid, 783. effect of partial, ib. to two or more, not partners, ib. indorsee's name wrongly spelt, ib. order of two or more indorsements, ib. conditional indorsement, ib. payer may disregard, ib. in blank, ib. special, ib. blank, may be com-erted into special, 784. restrictive, ib. how it efPects indorsee, ib. what it admits, 794. of a bill in a set, 799. forged, 795. conflict of laws respecting, 800. INDORSEE, notice of dishonour to, 789. general liability, 794. what he is precluded from denying, ib. stranger signing bill liable as, ib. of bill in a set, 799. damages against, 794. INFANT, when, party to bill, 780. INEORMAL INSTRUMENT, 778. INLAND BILL, definilion of, 774. INSTALMENT, sum in biU payable by, 776. INSTRUMENT. {See Bill.) what within act, 773. inchoate, 779. expressed to be on contingency not bill, 776. INTEREST, 799. sums payable by bill with, 77G. included in damages, 794. IRELAND, act applies to, 773. ISSUE, definition of, 774. JOINT AND SEVERAL, 803. LAW MERCHANT, how far retained, 806, lieu on bill, 781. INDEX. TO SUrrLEMENT. 823 LOST INSTRUMENT, 799. holder's right to duplicate of, ib. action on, ib. MAKER OF NOTE, 803. note payable to order of, ib. presentment of note to, ib. liability of, ib. application of provisions to acceptor to, ib. MATURITY, how computed, 777. of bill di-a-svn in one country and payable in another, 800. of after sight bill accepted for honour, 797. bill negotiated after, 784. pajTiieut at, or after, 795. MISDESCRIPTION, 777, 783. MISSPELLING, 783. MONTH, in bill, means calendar, 777. NEED, referee in ca.se of, 778, 798. NEGOTIATIONS. {See Lxdoesemext.) meaning of, 775, 782. of bill payable to bearer, ib. to order, ib. of overdue bill, 784. of dishonoured bill, ib. of bill to party already liable thereon, 785. negotiability, 796. when ceases, 784. NON-BUSINESS DAYS, what they are, 805. "NOT NEGOTIABLE," crossing cheque with words, 801. effect of such a crossing, 803. NOTARY PUBLIC, protest where notary not accessible, 805, 807. NOTICE OF DISHONOUR, when it must be given, 789. effect of non-notice, ib. rules as to, ib. how it must be given, ib. where bill misdescribed, 790. where drawer or indorser dead, ib. or bankrupt, ib. two or more drawers or indorsers, ib. time when to be given, ib. what is reasonable time, ib. in cases of agency, ib. excuses for non-notice and delay, 791. not necessary as against acceptor, 793. NOTING. {Sec Peotest.) bill when dishonoured, 783. when, is equivalent to protest, 805. 3h2 824 INDEX TO SUPPLEMENT. OMISSION or DATE, 776. OPTIONAL STIPULATION (by drawer or indorser), 778. <' OKDEE," BILL PAYABLE TO, 774, 775. {See Indoesement.) how negotiated, 782, 79-5. OVERDUE BILL, negotiation of, 784. eqvxities attach to, ib. bill payable on demand, ib. cheques, ib. PAEOLE EVIDENCE, allowed in certain proceedings in Scotland, 806. PARTIAL ACCEPT.^^CE, 779. PARTIAL INDORSEMENT, what it is, 783. does not negotiate bill, lb. PARTICUL^VR FUND, order to pay out of, 774. PARTNERSHIP, included in "person," 774. signature of, 780. PAYEE, must be described with reasonable certainty, 783. bill payable to two or more payees, ib. where fictitious person, lb. when provisions as to, apply to indorser, 784. indorsing, where wrongly described, 783. PAYMENT, " in due course " discharges bill, 795. what is, "in due course," ib. by drawer or indorser, ib. of acconnnodation bill, ib. of demand draft by banker whereon is a forged indorsement, ib. of a forged bill in general, 780. of crossed cheque, 802. place of, 774. PAYMENT FOR HONOUR, 798. PERSON, definition of, 774. PLACE, of drawing, 774, 800. of j)ayment, ib. of presentment for acceptance, 786. payment, 787. POST-DATING BILL, 777. POST OFFICE, presentment through, 786, 788. notice of dishonour through, 790. PRESENTMENT, for acceptance, 785. when necessary, ib. time for, of " bill after sight," ib. rules as to, 786. INDEX TO SUrrJ.EMENT. 825 PEESENTMENT— (•()«<(«««('. fur acceptance — continued. excuses for non-, 78G. di-awee's time for accepting, ib. through the post, ib. for pajTnent, 787. rules as to, ib. excuses for delay or non-, 788. not usually necessary to charge acceptor, 793. to maker of note, 804. to acceptor for honour, 798. to referee in case of need, 778, 798. PRINCIPAL AND AGENT, liability of principal, 780, SOo. person signing as agent, 781. liability of, ib. imauthorized signature, ib. PROCURATION SIGNATURE, 781. PROMISSORY NOTE, definition of, 803. requibites of, ib. delivery necessary, ib. inland and foreign, ib. joint and several, ib. payable on demand, 806. presentment for payment, ib. liability of maker, ib. application of act to, ib. PROTEST, necessity of, as agaiuyt di-awer or indorser, 791. as regards acceptor, 793. of foreig-n bill, 792. rules as to, ib. •when noting equivalent to, 805. ■where no notary at hand, ib. in proceedings for honour, 797, 798. of copy of bill, -when lost or destroyed, 792. in case of partial acceptance, 787. QUALIFIED ACCEPTANCE, 778. {Sec Acceptance.) ■what is a, ib. examples of, ib, RATIPICATION, of forgery, 780. RE-EXCHANGE, what it is, 794. RE-ISSUE, by acceptor, 785, 796. by drawer or indorser, 785, 795. REPEALS of former acts, 806, 2nd schedule. RESTRICTIVE INDORSEMENT, 784. SAVINGS, 806. SCOTLAND, act applies to, 773. in, bill operates as an assignment of funds in hands of drawee, 793. saving of summary diligence in, 806. amendment as regards parole e\'idence in, ib. 82G INDEX TO SUPPLEMENT. SET, bills in, 799. rules as to, ib. SIGHT BILL. {See After Sight.) is payable on demand, 776. SIGNATUEE, in blank, 779. essential to liability, 780. ^ forged or unauthorized, ib. procuration, ib. ■when a forged indorsement, 795. SPECIAL CROSSING, 802. SPECIAL INDOESEMENT, 783. STRANGEE, liability of, backing bill, 794. SUM PAYABLE, 776. "sum certain," what it is, ib. discrepancy between words and figui'es, ib. omitted, 779. alteration of, 797. SUMMAEY DILIGENCE, 806. SUNDAY, 777, 805. THANKSGIVING DAY, 777, 805. TIME OF PAYMENT. {Sec Payment.) TRANSFER, of bill by negotiation, 782. of bill to order without indorsement, ib. TRANSFEROR BY DELIVERY, 795. VALUE, 781. {See Consideeation.) defined, 774, 781. antecedent debt, ib. presumption, 782. need not be stated in bill, 774. holder for, 781. WAIVER, of bill or acceptance, 796. must be in writing, ib. of presentment for payment, 778, 789. of notice of dishonour, 778, 791. of protest, 778, 792. C. F. EOWOETH, PEINTEE, BEEAM'S BUILDINQS, CHANCEEY LANE. *<^ ( v'/'}.un-/yan.i\^' ^vjr ipiiiuti/j^ Yoivvfmn.-V^ mm^ ^^miMMA^^ T Pi )l 1' 1 •■n "Tj ,;iVi:R%, .cm^ V/ryiMMnro;-. A,l-LIBRARY^. ;Al-LlBRARY6k ^7/0:1 !TV> JO- ''^(^OrllTVlrlO- OMy^vl-I i U///^ ^Virl/U,! ^U/I'/j^ K'^ rrt UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 772 180 6 .V)FCALiFO% .N^l-LIBRAR> 1 ir .^mM(.ii£ji,^ :3fCAIifO/?4'>-