EVANS V. BULL.

Wanganui Chronicle, Volume XXIII, Issue 9456, 28 July 1881, Page 3

EVANS V. BULL.

The Australasian Insurance and Bank ing Record of the 9th instant contain an article commenting on the decisioi of Mr Hardcastle, the Eesident Magis trate, in the case of Evans v. Bull, trie< during last month. Our contemporary who appears to endorse the judgment says : — " We are somewhat surprised to fin< that the English Act, 1G and 17 Viet., i not in force in New Zealand. When thi ad valorem duty on demand drafts pay able to order was abolished, and a fixe( stamp-duty of one penny imposed, tin English Legislature, anticipating rightb that cheques to order would becorn< numerous, very justly relieved the banki from the liability of forged endorsement: of such instruments, and the Act bj which this was enacted has been reproduced in most of the colonies. " Until a similar Act be passed in Ne^ Zealand, the banks trading there shoult protect themselves by taking advantage of the ruling of Mr Justice Maule, in tht case Eobarts v. Tucker, referred to ir the above judgment, but which, for the benefit of our New Zealand readers, we now give at greater length. Mr Justice Maule says : — " ' I apprehend that bankers have a right to take a reasonable time to make inquiries. It may possibly happen thai the day may not afford sufficient time for making reasonable inquiries, as when the bill is presented by a stranger, and the indorsements necessary to give him title are by persons unknown to the bankers. In such a case, I conceive the banker would be justified in refusing to pay till he had more information as to whether the presentee was holder or not. A refusal to deliver lip goods to the owner, on the ground that the holder must have time to ascertain whether he is the owner, is no conversion.' "It is, however, only right that we should add that Hamilton (page 103, eh. 7), in referring to this dictum, says : — ' But this (that is, the right to make inquiry before payment) seems questionable.' " In support of this query, the case of Bulkeley v. Butler, 2 B. and C, 446, is quoted, which states : — " ' When a bill of exchange is made payable to order, and is endorsed generally by the drawer, the endorsement is, as we have seen, tantamount to an order to pay the bill to the bearer or holder, so that the mere production of such a bill by a party in possession of it is primd facie evidence that he is a bond fide endorsee and holder of the bill.' "We do not see, however, that this touches upon the right of the banker to make inquiries before payment. The question is — Would the drawer of a cheque to order have a right of action against his banker should he delay payment for a reasonable time, while inquiry is being made as to the genuineness of an endorsement ? We think not. A banker is bound to know the handwriting of his customer, but not of the signatures of endorsers, and delay pending inquiry as to genuineness, is, we consider, both equitable and legal. The bank upon which the cheque is drawn must make the inquiry with all diligence, and not throw the responsibility upon the bank presenting, and if compelled to return the cheque, it should be clearly stated that inquiry is being made as to the genuineness of the endorsement. We do not agree with the counsel for the plaintiff, that a cheque payable to order is an irregular cheque. Grant says (3rd cd., p. 14) : — " ' A cheque on a banker, or, as it is sometimes called, a banker's draft, is a written order for the payment of a specified sum of money to a person named, or bearer, or order.' " We may add, however, that if the I cheque in question has been altered from ' bearer ' to ' order,' without the alteration being confirmed by the drawer, it | is, strictly speaking, irregular ; but we think it would be undesirable to refuse payment of a cheque for such a cause."