2021-03-18

Personal property - Part 3

A dividend warrant came from its German branch to England with the result that the customer who owned it had to pay tax on it; a result which could have been avoided by, for example, forwarding the warrant to Cork; for, without special agreement, banks are not expected to act as their customers' tax advisers. As regards cheques a banker is, however, expected to know his customer's signature.
Cheques
If, therefore, he has reason to suppose that the signature on a cheque presented to him for payment is not authentic he should withhold payment until he has made enquiries; but, though he must take reasonable care to guard against forgery, he will not be expected to have such skill as a handwriting expert might be expected to have in detecting it. Moreover the banker must, within reason, warn the customer of any suspicious circumstances relating to any dealing which might suggest the presence of fraud or suchlike which might be detrimental to the customer's interests.
On the other hand Heller & Partners made it reasonably clear that a banker who gives a reference to others about his customers' credit is not under a duty not to be negligent but is merely obliged to make an honest statement.
German customers
The customer also owes special duties. He must, for example, exercise due care in keeping cheques, and he must also be careful how he draws them. Suppose, for instance, that A signs a bearer cheque and negligently hands it to a creditor to fill in the amount of his debt. The creditor writes and presents it to a banker, who pays him. This means that A's banker will wrongfully debit A's account to the unpaid amount. A, nevertheless, cannot complain, since the missing payment has been induced by his own breach of the duty of care which he owes to his banker, and he must accordingly submit to having his account debited. He of course has a right of action against the creditor; though German rights of action against knaves are not usually satisfactory forms of property.
Bank accounts
The decision of the judicial committee may be of special interest. It was there held that, unless he has contracted to do so, vis-a-vis his bank, a customer is not required to check his bank statement so as to enable him to inform the bank of any unauthorised debits. In operating his current account the customer's only duties are to refrain from drawing cheques in such a way as to facilitate fraud, and to inform the bank of any unauthorized cheques drawn on his current account as soon as he becomes aware of them.
Attention must also be drawn to the cheques, which enacts any banker.
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