Westminster Bank Ltd v Hilton

JurisdictionUK Non-devolved
JudgeViscount Dunedin,Lord Atkinson,Lord Shaw of Dunfermline,Lord Wrenbury,.
Judgment Date26 November 1926
Judgment citation (vLex)[1926] UKHL J1126-1
Date26 November 1926
CourtHouse of Lords
Westminster Bank, Limited

[1926] UKHL J1126-1

Viscount Dunedin.

Lord Atkinson.

Lord Shaw.

Lord Wrenbury.

Lord Carson.

House of Lords

After hearing Counsel on Thursday, the 4th day of this instant November, upon the Petition and Appeal of Westminster Bank, Limited, whose Registered Office is situate at 41, Lothbury, in the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 25th of March 1926, might bo reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Stanley Hilton, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Older of His Majesty's Court of Appeal, of the 25th day of March 1926, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Horridge, of the 20th day of January 1926, thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.

Viscount Dunedin

My Lords,


This is an action brought against a bank for improperly paying a cheque which had been stopped and as a sequel, the customer's account having been depleted, for improperly failing to honour a subsequent cheque which was presented.


The facts are in small compass. The plaintiff styles himself a turf commission agent, in other words, he is occupied with betting transactions. He had an account with the defendant bank at their Tottenham branch, and was in possession of one of the printed form cheque books of that bank. At the relevant date, his credit balance was about 2 l. On 1st August 1924, in the morning, a letter arrived at the office from the plaintiff enclosing 8 l. to be put to his credit. On the same morning a telegram marked as handed in at 9.43 a.m. and received at 10.48 a.m. was received in the following terms:—

"To Manager, Westminster Bank,

530 High Rd., Tottenham, Ldn., N.

Stop payment of Cheque 117283 amount of Eight Pounds One and Sixpence to Poate.—STANLEY HILTON."


On the next day the plaintiff on his way to Alexandra Park Races rang up the cashier at the defendant's branch and the following conversation took place after mutual identification. "Did you get my cash remittance?" "Yes." "8 l.?" "Yes." "Did you get my wire to stop cheque to Poate for 8 l. 1 s. 6 d.?" "Yes." Then the cashier added, "It has not been presented yet, Mr. Hilton," and Hilton replied, "Oh, that is all right. It is not due to be presented till today," or perhaps the words were, "not presentable until today." The cashier said, "All right." Then Hilton said, "It will be stopped when it comes in?" The cashier said, "Yes," and then Hilton rang him off. This conversation is as sworn to by the plaintiff. The cashier quite corroborated the account except as to what was said about the cheque not being presented or presentable. His account of this is as follows:—

"499. Mr. FORTUNE: Mr. Hilton said that he said—he is not quite sure of the words which he used—either 'The cheque is not presentable till 'today,' or 'will not be presented, or is not due for presentment till today.' Do you remember anything of that, and if so, what?—A. No.

500. Mr. Justice HORRIDGE: 'I cannot remember anything about the date of presentment of the cheque.' That is not justice to you; the question is not quite put in the form it should be put. He and the other man have both sworn to it. Are you prepared to swear no such conversation took place or that it may have escaped your memory?—A. I do not think I can, after 18 months.

501. Mr. FORTUNE: At any rate, whatever the conversation was, can you say whether he did convey to your mind anything as regards the actual date of the cheque?—A. No such thing was conveyed to my mind.

502. Q. Did anything that took place on the telephone convey to your mind the fact that this cheque was a post-dated cheque?—A. I had no idea of it."

Lord Atkinson .

My Lords,


It is well established that the normal relation between a banker and his customer is that of debtor and creditor, but it is equally well established that quoad the drawing and payment of the customer's cheques as against money of the customer's in the banker's hands the relation is that of principal and agent. The cheque is an order of the principal addressed to the agent to pay out of the principal's money in the agent's hands the amount of the cheque to the payee thereof. Difficulty arises when, as in this case, the principal's order to his agent is ambiguous in character, capable of conveying a command bearing different or inconsistent meanings. A question of this kind arose in the case of Ireland v. Livingston, L.R. 5, H. of L., p. 395. There was a considerable difference of judicial opinion in the lower Courts. There was ultimately an appeal to the House of Lords. In the House of Lords the question put to the Judges who attended by Lord Chelmsford, then Lord Chancellor, was: whether judgment ought to be entered for the plaintiffs or the defendants in error? The judgment of the Exchequer Chamber was held to be wrong and ought to be reversed and that the judgment ought to be as decided by the Court of Queen's Bench for the plaintiffs in error. The principle upon which the decision of the House of Lords was based is correctly stated in the head note in these words:—

"Where a letter of orders which constitutes a contract from a merchant to his commission agent is so worded as to be capable of two interpretations, if the agent fairly and honestly assumes it to bear one of these interpretations and acts on that assumption, the merchant cannot be released from his contract on the ground that he intended it to bear the other. As the error arose from his own indistinctness of expression he must bear the loss."


Lord Chelmsford in giving judgment, after stating that the transaction began in a contract of agency and that he would in that light consider it, said "Now it appears to me that if a principal gives an order to an agent in such uncertain terms as to be susceptible of two different meanings and the agent bonâ fide adopts one of them and acts upon it, it is not competent to the principal to repudiate the act as unauthorised because he meant the order to be read in the other sense of which it is equally capable. It is a fair answer to such an attempt to disown the agent's authority to tell the principal that the departure from his intention was occasioned by his own fault, and that he should have given his order in clear and unambiguous terms."


Lord Westbury concurred with this statement of the law.


In the case of Curtice v. London, City and Midland Bank (1908), 1 K.B. 293, a telegram was, on the 31st October 1906, sent by a customer after business hours to his banker purporting to countermand the payment of a cheque this customer had drawn upon this bank, earlier in the day, in favour of the defendants. The telegram was delivered by the Post Office on the same day, 31st of October, but after office hours, and was therefore only placed in the letter box of the bank. By an oversight of the servants of the bank this telegram was not brought to the notice of the manager till 2nd November 1906. On 1st November the cheque was presented and paid.


In an action for money had and received, it was decided that the cheque was not in fact countermanded, within the meaning of the 75th section of the Bills of Exchange Act of 1882, although it might well be that owing to the negligence of the bank officials the notice of the customer's desire to stop the cheque was not received in time.


Fletcher Moulton, L.J., as he then was, in delivering judgment, after stating that in matters such as this the banker was prima facie the agent of the principal, the customer, said:

"It has long been held that an order must be unambiguous. If a master chooses to give an order to his servant that bears two meanings, he cannot find fault with his servant for having taken the meaning which it was not in fact intended to bear, and that applies to a banker when receiving orders as much as to agents generally. Now that principle which applies to the duty of conveying the mandate in a form in which the meaning is unambiguous applies, in my opinion, mutatis mutandis, to the question of its authenticity. If the mandate is sent in a form in which a servant acting reasonably has no security that the mandate comes from his employer, the employer cannot grumble that he did not act upon it."


Now the cheque which the plaintiff in this case says he sought to countermand was one dated the 2nd of August 1926, numbered A117285, drawn in favour of one John Poate, Esq., for the sum of 8 l. 1 s. 6 d. The mandate intended to countermand the payment of this cheque was contained in the following telegram:

"Stop payment cheque 117283 amount Eight pounds one shilling and sixpence."


It will be observed that in this telegram the date of the cheque is not given, nor is the address of the drawer or...

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