Page:Halsbury Laws of England v1 1907.pdf/856

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Bankers and Banking.

634 Sect. 18.

Securities for

A

partner has implied authority to deposit title-deeds whether real or personal, belonging to the firm, as security for advances to the firm and when the partnership is terminated by the death of the last surviving partner but one, the banker is entitled to treat a subsequent deposit of such deeds as being in the course of winding up the partnership affairs and so

1278.

of property,



Advances. Deposit

by-

partner.

legitimate (m). Sub-Sect. Banker's remedies on bills or notes.

Eight to negotiate.

Collateral security.

3.

Bills

and

Notes.

1279. Where bills or notes are deposited (n) as security, and not absolutely transferred in consideration of the advance, the banker's position is that of pledgee, analogous to that which he holds by virtue of his lien (o). If he took the bill or note without notice of any defect in the customer's title, he can in any event sue all parties to it to the extent of his advance (p). If the customer had a good title, the banker can sue all parties for the full amount, holding the balance, if any, beyond the advance as trustee for the customer (q). If the banker hold the customer's indorsement on the bill or note, he can sue the customer thereon to the extent of the advance but the property in the bills or notes remains in the borrower. Though, as before stated (r), there are dicta to the effect that, in certain states of the account, a banker may negotiate bills or notes of a customer in his hands, it would certainly not be a reasonable course to adopt where the instruments are security for an advance repayable at a definite period which has not arrived, or where the security is for existing or future overdrafts, without previous request for payment. The usual and proper course is to keep the documents and present them for payment at maturity, and set off the proceeds against the advance. If instruments at a fixed date are not duly presented, the banker will have to bear any loss incurred by the omission (s).

Where

a bill or note is given strictly as collateral security, does not, even while current, suspend the remedy on the debt, and in theory the banker might sue for the advance pending the currency of the bill or note(0, but it would be very unusual to do so. And where a bill or note is strictly collateral security, satisfaction of the debt does not necessarily discharge the bill or note (a). it

(m) Ee Bourne, [1906] 2 Ch. 427, and see generally title Partnership. (n) For form of memorandum of deposit, see Encyclopaedia of Forms, Vol.

II.,

p. 489. (o) Banker's lien being an implied pledge. See p. 622, ante. (p) Compare Bills of Exchange Act, 1882- (45 & 46 Vict. c. 61), s. 27 (3). (q) See Great Western Rail. Co. v. London and County Banking Co., [1900] 2 Q. B. 464. It would appear, however, that the banker could retain such surplus to meet any further existing indebtedness of the customer (see Jones v. Peppercorne (1858), John, 430 Inman v. Clare, ibid. 769 Ee London and Globe Finance Corporation, [] 902] 2 Ch. 416), also by right of set-off {Ee Bowes (1886), 33 Ch. D. 586). (r) See note {g), p. 599, ante. (s) Peacock'v. Purssell (1863), 32 L. J. (c. P.) 266. (0 Ibid. (a) JenUns v. Tongue (I860), 29 L. J. (ex.) 147 Glasscock v. Balls (1889), 24 Q. B. D. 13. In both cases discharge of the debt was obtained by the holder of

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