Modern Perils to the Collecting Banker
| Date | 01 December 1938 |
| DOI | http://doi.org/10.1111/j.1468-2230.1938.tb00407.x |
| Author | A. G. Davis |
| Published date | 01 December 1938 |
222
MODERN LAW REVIEW Dec.,
1938
MODERN PERILS TO THE COLLECTING
BANKER
When is a banker deemed to be guilty of negligence within the meaning
of
s.
82
of the Bills of Exchange Act,
1882?
This section, it will be remem-
bered, enacts that “where
a
banker, in good faith and without negligence
receives payment for a customer of
a
cheque crossed generally 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 payment.”
To the question asked it is, in the present state of the authorities,
impossible to give an answer, for, to quote Lord Wright, in
LIoyds
Bank
v.
Savovyl:
“In each case negligence must be
a
question of fact in the
particular circumstances.” Consequently the best one can do is to con-
sider the decisions arising on the section; though it is cold comfort to
a
banker who
is
seeking to protect his interests to
be
told
:
“
In circumstances
such
as
these you will be guilty of negligence, but
that
does not mean
that
in other circumstances which may arise you will not be held guilty of
negligence.”
It
is not intended in the present article to review all the authorities
in which the word “negligence” in the section quoted has been considered.
That would be beyond the limits of space available in many numbers of
this Review. But some recent decisions present an opportunity for
a
further consideration of the section.
Before dealing with these decisions, however, it may be useful to refer
to the genesis of the section and consider what was the attitude of the
Legislature
at
the time when the section was
first
enacted. Not that it
is open to
a
Judge interpreting the section to do
so,
but an inquiry into
the attitude of the Legislature
is
useful in determining whether from the
commercial,
as
distinct from the strictly legal aspect, the section has been
interpreted in accordance with the intentions of its framers.
The section first appeared in the Crossed Cheques Act,
1876.
During
the debates on the Act, the word “negligence” was scarcely adverted to,
the only mention being in the Attorney-General’s explanatory speech,
when he explained the protection which bankers would receive
‘‘
unless
they should
be
proved to have acted with negligence.”% Other members of
both Houses sought no explanation of the meaning
of
the word
as
it
appeared in the Bill. The section was repealed by and, with merely ver-
bal alterations, re-enacted in the Bills of Exchange Act,
1882.
Again in
the passage of the Bill through Parliament, the word round which
so
many legal battles have raged was not considered.’ Certainly no attempt
was made in either Act to define the word and consequently judges were
left with
a
clean sheet on which, it is suggested with respect, they have
made several blots. With the passage of time the blots have grown larger
until now, to the banker, they assume the form of an ominous cloud. Two,
at any
rate,
of the three decisions to be discussed have been the cause
of much perturbation in banking circles.
Lloyds
Bank
v.
Savory4
arose out of an ingenious fraud committed by
a
See Parl.
Deb.,
Vol.
ccxxxi
(3rd
ser.),
p.
1215.
a
See
ibid.
Vol.
cclxxii
(3rd ser.),
pp.
833 and
1671.
*
[1g33]
A.C.
201.
[I9331
A.C.
201
at
p.
223.
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