IMPORTANT POINT REGARDING BILLS.

West Coast Times, Issue 277, 13 August 1866, Page 5

IMPORTANT POINT REGARDING BILLS.

(from the otago daily times.) The Commercial Bank of New Zealand v. Dyer. — Mr Justice Chapman delivered the judgment of the Court as follows : — This is an action brought by the plaintiffs under the Summary Proceedings on Bills of Exchange Act, and at the triaf before Mr Justice Richmond, the plaintiffs were nonsuited, the learned Judge considering that no action 1 would lie upon a bill which the plaintiffs retained, by virtue of their general lien I as Bankers, against their customer, who had deposited the same for collection, and who was the drawer and endorser thereof. This rule is for the purpose of setting aside the nonsuit and having a new trial, on the ground that the nonsuit was erroneous, inasmuch as where a banker holds a bill of exchange under the circumstances above referred to, he has a right of action against all the parties thereto. The question thus raised is new in the iustance, and therefore we can derive no light from direct authority, and we must seek for some known principle of law applicable to the case. It is not surprising that the point should not hitherto have arisen, iuasmuch as before the remedy on bills of exchange, by the present summary proceeding, was established by statute, the banker would have no motive to sue on the bill itself. Pairing a responsible defendant on the bill, he would naturally suohis customer for his balance. But the simpler and speedier remedy on the bill now furi nishes an intelligible motive to adopt the hew remedy, and it becomes our duty to consider whether that can be done. It is now too well settled to admit of doubt that the banker can sue the acceptor or drawer of a bill deposited with him under the circumstances described, and probably also any party other than the dejjositor. In Bolland v. Bygrave, R. and M., 271, an action was successfully maintained against the acceptor, and in Scott v. Fraiikland, 15 East,, 428, against the drawer ; and we entertain no doubt that upon the principle of thesi cases he has a similar right of action agaiist any party whom , his customer, his immediate endorser, might sue. Indeed, the lien, which is a right to retain the bill against his customer, being- once established, the right to sue all patties liable to the customer is as necessary for the protection of the customer's interest as for that of the Banker. The customer cannot himself sue on a bill out of his possession. If he could, he would be able to defend the lien, and if the Banker could not sue the parties would be exonerated. But there is no such necessity of suit against the customer himself ; the banker can sue him on his balance if the parties to the bill are insolvents or not worth suing. That course is m nowise detrimental to tho banker, and failing the necessity above described, we must^pause before we extend the right of action beyond the authority of the decided cases. They clearly stop short of the present case ;t; t and to enable us to determine the question before us, we think we must look to the motive, or ratliter intention, of the endorsement. The defendant Dyer is the drawer of the bill. He deposited it with the plaintiffs for collection, and'in order to enable them to collect it, he necessarily endorsed it. It was not, therefore, an endorsement made with the intention of transferring an absolute property in the hill, but merely with that of enabling the plaintiffs effectually to perform the act of agency contemplated — that is, to collect, or in other words, deceive payment of the bill There is clearly no intention on the part of the defendant to contract for a right of action against himself, as there is where the banker gives money for a "bill by ' discounting it ; whilst there is as clearly an intention to give a right of action against all others. The cises cited dv.ing the argument do not aid us materially or directly, but ex farte Towgood, 19 Vis., recog I nises the distinction to be drawn from the intention of the endorsement — that is, as constituting an absolute tranfer in the case of discounted bills, but merely an authority to collect in the case of deposited bills; and this distinction is well preserved in the case of Castique v, Buttigeig, 10, Moore, P.C. 94, where it was held that a.'i endorsement does not necessarily create liability. We are, therefore, of opinion that, although a Banker who holds bills by virtue of his lien hath, ex necessitate, a right of action against all the parties, except his customer. His right of action against his customer on any bill which he hold<s must be determined by the intention manifested ty the endorsement. In the case of a bill discounted, the endorsement must be taken to be an absolute transfer, which will include a right of action against the customer — the last endorser. In the case of a bill for collection there is no such intention manifested. In the language of ex parte Towgood, the endorsement is " merely an authority to enable the person with whom they (the' bills) are deposited to receive the amount from th.3 other parties." As to the objection that the question was not raised by the pleadings, the traverse that the bank was holder seems sufficient. Indeed, the whole question is matter of evidence. Nor do we think that the subsequent state of the accounts by new advances makes any difference, those advances not being by the discounting of the bill, or even on the bill, so as to alter the intention of, or rather impart a new intention to, the defendant's endorsement. Rule discharged.