BANKER AND CUSTOMER.

New Zealand Herald, Volume XVIII, Issue 6061, 21 April 1881, Page 5

BANKER AND CUSTOMER.

IMPORTANT DECISION. At the recent sittings of the Supreme Court at Hokitika, before* Mr. Justice Gillies, an appeal from ex-Judge Weston's charge to the jury in Hislop v. The National Bank of New Zealand, Limited, was heard. The facts iipon which the appeal turned were that Hislop received a remittance from Nelson through the defendant's bank, payable at Reefton ; that on applying for payment thereof, the bank induced him to sign a receipt therefor, and thereupon informed him that they should hold the money (£ls) against an old acceptance of his which had been made payable at another bank, and had been long since dishonoured. In an account which the bank opened Hislop' was credited with the draft, and debited with the overdue bill. Hislop disapproving—drew a checjne for the remittance, and upon payment being rafused, an action was raised in the District Court at Reefton for £200 damages. Upon the law, as laid down by the presiding Judge ll the jury found for plaintiff, with damages, £50. Upon the Judge's charge an appeal was instituted. After hearing counsel on both sides, Mr. Justice Gillies said :—The case presented no difficulty. The question was—Had the bank a right to appropriate the amount of the rcmittancc towards a pre-existing debt ? The bank had no such right, as it received the money upon an obligation to pay as directed by the customers. In this case the customer directed the bank, by his cheque, to pay the amount, and gave no authority to the bank to debit his account with the amount of the dishonoured bill. The ordinary principle of set-off does not apply in cases of Banker and Customer. The duty of a banker, on receipt of his customer's money, is to pay out sucli money as the customer directs. The bill had not been made payable at the bank in question, and, therefore, there was no direction to the banker to pay such bill. The learned Judge's direction to the jury was right, and the appeal must be dismissed, with costs, against the bank.