JUDGMENT REVERSED

NZ Truth, Issue 772, 21 August 1920, Page 5

JUDGMENT REVERSED

4 , Norton Trustees' Appeal DECISION OF FULL COURT. Several months ago the John : Norton Trustees sued the Union Bank of Australia for the sum of £17,423 9s Id, being- a portion of the moneys which had been embezzled by McClintock, ex-general manager of "Truth," and which amount the Trustees considered the bank was at fault m handing over to McClintock. When the case came before the Supreme Court sessions at Sydney, the verdict was for the defendant bank. Against this verdict the John Norton Trustees, acting on the advice of their immediately appealed. The appeal came before the Full Court on Wednesday last, when Justices Prlng, Gordon and Ferguson reversed ■ the verdict given at the first trial, and found for pursuers. The action, a claim for £ 17,423 9s Id, by the trustees of the estate of the late John Norton, newspaper proprietor, of Sydney, against the Union Bank of Australia, Ltd., m relation to certain cheque transactions, was heard before the Chief Justice (Sir William Cullen) and a jury of four. A verdict was then found -tor the defendant bank. IMPORTANT POINT. • Mr. Justice Pring was of the opinion that the verdict for the defendant bank should be set aside,: and a verdict entered for the appellant trustees for £17,375. He said that it was Important to bear m mind that McClintock had been the general manager of the appellants' business, which consisted of the publication of various newspapers m the Commonwealth. His authority to draw* cheques was limited by their letter to the A.B C of August 27, 1917: That letter informed the bank that cheques were to be countersigned by Messrs. Starlcey and Starkey. In that respect McClintock kept strictly within the bounds of his authority. So long as the cheques were properly signed the A.B.C. Bank was entitled to honor them. That bank, m the absence of special circumstances, was not concerned with the application of the proceeds. Some were intended to go to the credit of mother account of the appellants with the bank, . but of that the bank, apparently, had no notice. McClintock for his own purposes, exchanged them for cheques of the A.B.C. m favor of the fictitious, person whose name 'he was using to carry out the frauds. QUESTION OF PROPERTY. The position, therefore, continued his Honor, was that he, having lawful possession of property of his employers, .which they might have demanded from him, exchanged that property tor other properts'. The question for the court was whether the trustees, when McClintock paid the bank cheques into the defendant bank, had -he, right to possession of them. If NJ^Tciintock had cashed the original cheques at the A.B.C. the trustees ;vould, he thought, be entitled to the possession of the cash. If a servant without authority from his master ex:hanged his master's goods for other ?oods, the latter might, if he thought It, assume possession of such goods l.ncl treat them as his own. McClin:ock, as general manager, had the au:hority to procure bank cheques, and he fact that he had misappropriated mch cheques could not destroy the xustees' right to the possession o£* ;hem. UNCONDITIONAL ORDER A bill of exchange was an uncondiional order m writing addressed by mo person to another, signed by the lerson giving it, and requiring the peron to whom it was addressed to pay ■n demand, or at a fixed or determinblo future time, a rertain sum of .ioney to or to the order of a specified iprson or to boarer. In the present case the bank cheques

were addressed by the bank to itself, ] and manifestly did not come within the definition, as they were not addressed by one person to another. 1 He had, therefore, arrived at the con- < elusion that the bank cheques the sub- ] ject of the action were not cheques ' within section 88 of the Federal Bills 1 of Exchange Act. VERDICT ENTERED ' Mr. Justice Gordon, m a separate ] judgment, held that the appeal had failed, and should Tse dismissed, but with regard to a particular cheque, he ( was of the opinion that there should } oc a new trial. j Mr. Justice Ferguson, also m a sep- * irate judgment, 'concurred with Mr. ' fustice Pring, that the verdict for the ] lefendant bank should be set aside. A verdict was then entered, by ma- £ iority, for the Norton trustees, for £17,378. I The defendant bank was directed to * >ay costs. c — s