QUESTION II.-A. B. signs a guarantee which contains the following passage: "I further agree as follows, viz., that this guarantee or engagement shall be considered a continuing guarantee, and shall not be withdrawn, but shall continue in full force until 14 days after notice to your manager, or one of your managers, in writing, under my hand, of the intention to discontinue or determine the same," to secure advances made by a banker to C. D., a customer: after a while A. B. fails, and his petition for liquidation is gazetted in the usual way, but no written notice is given to the banker. The account of C. D. at the time of A. B.'s failure is credit. Does A. B.'s liability cease when his affairs are liquidated, or does he still remain liable to the banker for subsequent advances made to C. D. ? ANSWER: The liability such as it is of A. B. under the guarantee is "a debt provable in bankruptcy" within the meaning of the Bankruptcy Act, 1883, sec. 30, sub. sec. 2, and A. B., on obtaining his order of discharge, would be released from that liability, as well as from all other debts provable under the bankruptcy. The law under the Bankruptcy Act of 1869 as applicable to liquidators by arrangement would be the same. QUESTION III.-A. obtains a loan from a banker D. on a joint and several promissory note signed by himself, and B. and C. as securities. When the note matures. A. presents a renewal signed by himself and B., and states that C. will call and sign the note in a few days; and D. not wishing to have the bill overdue, passes the renewal, but retains the old bill. Now, supposing that C. refuses to sign the renewal, can the banker D. sue C. on the old bill? or does the fact of the renewal discharge the old bill, and leave the new one to stand on its own merits? Or if C. is discharged would that affect the banker's recourse against B. (the other security) ? ANSWER: We think the circumstances are sufficient to show that the agreement, on the part of the banker, to renew the promissory note was conditional on C. signing the renewal, and that should he refuse to do so, the banker would be entitled to sue the sureties on the old note. QUESTION IV.-The Municipal Acts say "1. The Council shall from time to time appoint a fit person, not a member of the Council, to be the Treasurer of the Borough." "2. All payments to and out of the borough fund shall be made to and by the Treasurer." In case the Council of the said Corporation desire to have a banking account, should it not be opened with the bank in the name of the Treasurer, as under ?— "A. B., Treasurer for the Mayor, Aldermen, and Burgesses of the Borough of Would it not be illegal for the said Treasurer to allow the account to be opened in the name of the "Mayor, Aldermen, and Burgesses of the Borough of," and to allow members of the Council to sign cheques drawn on the account without his signature, as if it were their own account? ANSWER: We think the form of account suggested is the correct one, and that it would be illegal for the Treasurer to allow members of the Council to sign cheques drawn on the account without his signature. QUESTION V.-Would cheques drawn to the order of Messrs. F. J. Hunt, be correctly endorsed thus: "F. J. & F. J. Hunt " "? ANSWER: This endorsement is correct. QUESTION VI.-In the event of a banker in the ordinary course of business making an advance to his customer upon bonds payable to bearer, and afterwards receiving notice that the bonds in question do not belong to the customer, but to trustees (say, of a marriage settlement), would the banker's lien hold good as against the claim of the trustees? ANSWER: It would. QUESTION VII.-Is a customer holding a deposit interest receipt obliged to stamp such receipt when increasing and changing it for a larger one? ANSWER: On lodging money for the credit of an account bearing interest, no stamp is required. On such accounts being withdrawn, a stamp should be fixed to the receipt. QUESTION VIII.-Must he stamp such receipt when transferring it to his current account? ANSWER: No. QUESTION IX.-A country bank having drawn a draft on their London agents, the latter paid it without endorsement. Is it obligatory on the country bank to return the document for endorsement, and would the loss fall on the London agents in case of the cheque being stolen? ANSWER: The London bank, on whom the draft was drawn, was not justified in paying it without endorsement, and would have to bear the consequences of so doing. QUESTION X.-A bill of exchange (drawn from Rio Janeiro), specially endorsed by the payee, was stolen from a letter in transit. The thief altered the name in the special endorsement to another, representing himself. He then caused the bill to be presented to the drawees in London for acceptance, which, being duly obtained, he endorsed, and negotiated the bill to a firm of foreign bankers. The fraud was discovered prior to maturity, and payment was consequently refused. Could the holders for value set up any claim upon the ground that the alteration in the name in the first special endorsement was made before the bill was accepted by the drawees? ANSWER: No. QUESTION XI.-A payee endorses a cheque making it payable to a third party. The third party loses cheque and stops payment of the same. Is it necessary for the bankers also to obtain the instructions of the drawer? ANSWER: Yes. QUESTION XII.—If a man cannot sign his name at the back of a cheque, is it necessary for the cashier to know him to witness his cross? ANSWER: Yes. QUESTION XIII.—If a cheque is payable to Mrs. John Smith, is it sufficient for it to be endorsed" M. A. Smith "? ANSWER: No; it is usual to add the words, "wife of John Smith," without which the cheque ought not to be paid, unless the drawee knows of his own knowledge that M. A. Smith is Mrs. John Smith. QUESTION XIV.-Cheque payable to "John Smith, or order," endorsed thus: "Placed to credit of payee in account with blank bank— p.p. blank bank, J. Brown, Manager." Is this sufficient for the paying banker, or is he justified in asking for payee's endorsement, or the distinct guarantee of the presenting bank? As a matter of fact, are such endorsements freely made and taken? ANSWER: The banker is justified in asking for the payee's endorsement or banker's guarantee; but endorsements as above are sometimes taken at the discretion and responsibility of the paying banker. QUESTION XV.-Is a banker liable if he pays a cheque after he has been instructed by the drawer (his client) to stop payment of the same ? ANSWER: Yes. QUESTION XVI.-A cheque being drawn payable to the order of Mr. J. and Mrs. S. Langdon, is endorsed "J. and S. Langdon." Is not this irregular ? ANSWER: It is. Mr. Langdon and Mrs. Langdon should each endorse the cheque separately. |