banker may have a lien to the extent of his advances. In order Reputed to change the property, it must be shown that the banker ownership: bought the bills. or discounted them which amounts to the same thing. (1) And, though bankers may have authority from their customer to discount bills remitted by him, to a certain amount, or for certain purposes, yet this will not give them an absolute authority to discount all bills, which may be paid in by the customer. Nor, indeed, will it make any material difference, that the special authority to discount is for an uncertain amount, and one which cannot well be ascertained at the time it is given ; as, where the object is to provide a fund to honor the drafts or bills of the customer, or to reduce the cash balance, when the bankers should be in advance. (2) - Bills not due, which are entered short in the banker's books, are always considered to be the property of the customer; and must be specifically returned to him, if the cash account is in his favour. But, if they are paid in by the customer as cash, or are entered as cash with his knowledge or consent, deducting the discount,—and he thereupon draws, or is entitled to draw upon the bankers, as having that credit in cash, it has been decided by Lord Eldon, that the customer will be precluded from recurring to the bills, specifically; and that such knowledge or concurrence, on the part of the customer, may be inferred from the usual mode of dealing between the parties. (3) standing the customer has permission to bankers to the amount of the bills paid in, yet, if they are entered as BILLS in the banker's books and the cash balance, independently of the bills, is in favor of the customer at the time of the bankruptcy, the customer has, in that case, a right to have all the bills remaining in specie (1) Per Holroyd J., Thompson v. Giles, 2 B. & C.431. (2) Ex parte Wakefield Bank, 1 Rose, 243. Ex parte Leeds Bank, ibid. 254. BANKER. But, notwith- (3) Ex parte Sargeant, 1 Rose, 153. Ex parte Pease, ibid. 233. 19 Ves. 25. Ex parte Sollers, ibid. 155. 18 Ves. 229. Reputed ownership: BANKER. Indorsement evidence delivered up to him by the assignees. And this, too, nos withstanding such bills were indorsed by the customer; unless it can be shown to have been his intention to make an absolute transfer of them; for the indorsement may be made merely, to enable the banker more effectually to res ceive the amount from the other parties on the bills, for the account of the customer. (1) Indorsement is, how prima facie ever, considered prima facie evidence of discount, unless the object of mere deposit is clearly shown. (2) If the object is a mere deposit, then it is a breach of faith for the banker to negotiate the bills, unless he is justified in so doing by the state of the customer's account. (3) But (as Lord Eldon has observed in one of the cases upon this subject) it ought to be generally known, that if bills 18+ DORSED are remitted to bankers, they may dispose of them effectually -as between the subsequent holder and the remitter-though contrary to the faith of the understanding between the parties; and the remitter can, then, only come in as a general creditor of the bankers. (4) of discount. As to right to retain bills, aris to discount. -- In the cases which occurred in Boldero's bankruptcy, the Lord Chancellor is reported to have dwelt much on ing from a the distinction between a general, and a limited, authority general, or to discount; and the bearing of his opinion seems to be a limited, authority that if bankers have a general authority to discount, the customer in that case would have no right to have the bills delivered up; and he is of the same opinion, also, (as has been already observed) when the bills are paid in as cash, and the customer is entitled to draw, as having that credit in cash-in which last case, it is conceived, the bankers would (as a matter of course) have, by legal inference, an authority to discount the bills so paid in. With great deference, however, it is submitted, that there is no solid distinction in law, whether the banker has a general, or a contracted (1) Thompson v. Giles, 2 B. & C. 422. (2) Ex parte Towgood, 19 Ves.. 229.; and see 2 B. & C. 429. (5) Per Bayley J., 2B. & C. 409. (4) Ex parte Pease, 1 Rose, 258. 246. Collins v. Martin, ↑ B. &P. 648. Ibid. 546. BANKERS. authority in this respect, as far as regards the right of the Reputed customer to reclaim bills remaining in specie in the ownership: banker's hands. The principle, which governs nearly all the cases on this subject, is, that in questions between a banker and his customer (though not as between the customer and third persons), the banker is considered precisely in the situation of a factor (1); and has only a lien upon the securities in his hands for his general balance. If the factor has converted the goods of his principal into money; —or the banker has negotiated (even contrary to good faith) his customer's securities, and turned them into cash;-then, as money has, generally speaking, no earmark to distinguish it from the common stock, neither the principal in the first case, nor the customer in the last, can have a specific claim for such money against the assignees either of the factor, or the banker, in the event of his bankruptcy. But, unless the property is actually changed either by discounting (2) the bills with the banker or by the banker himself negotiating them, — it is apprehended, that in whatever way they may have been paid in, or whether the banker had a general, or only a limited, authority to discount, his assignees can have nothing more than a lien for his general balance, if the bills remain in specie in his hands at the time of his bankruptcy; and that the customer (if the cash account is in his favour (3)) has a right to have the bills delivered up, upon his indemnifying the estate against any outstanding acceptances (4) of the banker for his own accommodation. banker's But though a customer has a right to have short bills Holders of delivered up to him, if the account is in his favor, - yet outstand. the holders of the banker's outstanding acceptances in favor ing acceptof the customer have no such right, notwithstanding the (1) Collins v. Martin, 1 Bos. & P. 651. Thompson v. Giles, supra. Boiton v. Puller, supra. (2) Carstairs v. Bates, 3 Camp. 301. FF (3) And see Giles v. Perkins, 9 East, 12. (4) Ex parte Buchanan, 1 Rose, 280. 19 Ves. 201. Ex parte Rowton, 1 Rose, 15. 17 Ves. 426.; and see per Holroyd J., 2 B. & C. 431. ances, have no BANKERS, claim to the short bills. But Lord cellor will available; Reputed short bills may have been expressly deposited to answer ownership: such acceptances. For these bill-holders, being no parties to any contract between the customer and the banker, can have no lien even in equity upon such short bills;- the object of depositing which was, not for the security of the persons in whose hands the banker's acceptances might be, but for the security of the banker himself, who became liable on them. But, as the liability of the banker's estate, in respect of such outstanding acceptances, must be exonerated, before any restitution of the short bills can be claimed by the customer if the customer, therefore, should also become bankrupt, then his assignees are bound to leave the banker's estate in the same condition, as the customer must have done himself. And, as the holders of the outstanding acceptances are, in this predicament, entitled to be paid out of the produce of such short bills, their claim though not possessing a direct lien upon them, the Lord Chancellor will, on petition, order such an arrangement of the property between the two estates of the banker and the customer, as may indirectly render the claim of the bill-holders available. (1) When bankers, however, before their bankruptcy have received out of the produce of part of the short bills, a sum of money more than sufficient to satisfy all their outstanding acceptances for the customer, their assignees will, then, have no right to retain the remaining short bills to satisfy such acceptances; and, consequently, the holders of the latter will, in this case, have no greater right to be paid out of the produce of the remaining short bills. But, though the bankers may have been in cash sufficient to pay these acceptances, there may still be such a state of accounts between them and their customer, as will give them a lien upon the remaining bills; and, in order to ascertain this state of account, the Lord Chancellor will (on the petition of the bill-holders) refer it to the Master, to inquire, whether the bankers had, at the except when. (1) Ex parte Waring, Ex parte Inglis, 2 Rose, 182. 19 Ves. 345. time of their bankruptcy, any lien upon the remaining short Reputed bills in their hands. (1) ownership: BANKERS, As to to answer claim. V., a customer of the banking-house of D. and Co., transfers to N. (a partner in the firm) certain stock by way balance of of security for money borrowed of them, and gives also stock apnotes for the amount, payable on the stock being re-trans- propriated ferred to him. He pays off these notes; and afterwards a partiborrows a further sum on the joint note of himself and cular his son, without calling for a re-transfer. The stock so transferred (being blended with other stock, of which N. was in like manner possessed by way of security for other customers) is sold by the partnership, except a small balance still remaining in the name of N. It was held, under these circumstances, that (the other creditors in respect of stock having been satisfied their demands) V. was entitled to the whole of this balance, as being sufficiently appropriated by the bankers to answer pro tanto the stock originally transferred by N. (2) Order for short bills, delivery of against An order may be applied for to have short bills delivered up, before the assignees are chosen, in case there is a provisional assignee, to whom such order will be a sufficient protection for what he does, in pursuance of the directions provi contained in it. (3) 4. Possession as Trustee, Executor, or Administrator. Where the bankrupt is a Trustee, and at the time of his bankruptcy has any property belonging to his cestui que trust in his possession, which can be distinguished from the mass of his own property, it does not in this case pass to his assignees; for any presumption of reputed ownership, arising from the fact of possession, is rebutted by the circumstance of the trust. Formerly, when a trustee, or executor, became bankrupt, it was the practice, upon the application of the cestui que trusts, or other parties in (1) Ex parte Parr, Buck, 191. 593. (3) Ex parte Buchanan, 1 Rose, 280.19 Ves.201. Ex parte Burton Bank, 2 Rose, 162. sional assignee. Trust property does not pass to assig nees. |