CHAPTER VIII BRANCH BANKS A BRANCH bank is in some respects treated as an independent bank, but in most respects it is treated as an integral part of the main business. "The position of branch banks is that, in principle and in fact, they are agencies of one principal banking corporation or firm, notwithstanding that they may be regarded as distinct for special purposes, e.g. that of estimating the time at which notice of dishonour should be given, or of entitling a banker to refuse payment of a customer's cheque except at that branch where he keeps his account" (Prince v. Oriental Bank Corporation, 1878, 3 A. C., 325, at p. 332). For purposes of bookkeeping and transmitting money from one branch to another, a bank and its branches are treated as one (see the actual decision in Prince v. Oriental Bank Corporation, given on p. 94). So the accounts of a customer who has a separate account at two branches of the same bank may be treated in the same way as two separate accounts of a customer at one branch (see the case of Garnett v. Mackewan, 1872, L. R., 8 Ex., 10, cited on p. 92). A branch bank cannot continue to carry on business after notice that the main business has stopped; but there is no stoppage till such notice, for, till notice, there is no revocation of the authority to carry on business at such branch. Where notice affects the liability of a bank, it is not necessary that notice should be given to all the branches of a bank. It is enough to give notice at the head office, and such notice will then be good against all branches after a reasonable time has elapsed to allow of a communication to be sent from the head office to the branches. In the case of Willis v. Bank of England (1835, 4 A. & E., 21) it appeared that one Norcliffe, on March 12th, 1833, committed an act of bankruptcy, and absconded from Liverpool. He took with him two bank post bills of the Bank of England for £200 each. On March 16th an application was made to the bank in London to stop the bills. On April 8th a further application was made, and it was then stated that a fiat of bankruptcy against Norcliffe was expected by every post. On April 12th Norcliffe persuaded a friend S. at Gloucester, who was known at the branch office of the Bank of England there, to get the bills changed for gold. S. and the branch bank were both ignorant of the act of bankruptcy, and the bills were accordingly changed. Norcliffe's assignees in bankruptcy sued the bank for the amount of the bills, and it was held that they must succeed, as there was sufficient notice to the head office to prevent the payment being protected as a bona fide one before issue of the commission of bankruptcy, and that the notice to the head office. operated as notice to the branch bank, a reasonable time having elapsed for transmitting it before the bills were received there. Exceptions. There are two purposes for which branch banks are considered distinct from the head office or other branches,-first, for payment of cheques; and secondly, for notices of dishonour. A customer at one branch is not entitled to present a cheque elsewhere than at the branch where his account is. And a bank paying at one branch a cheque drawn on another branch is in the same position as if the cheque had been drawn on an entirely distinct bank (Woodland v. Fear, 1857, 7 E. & B., 519). Any other rule than this. would be unworkable, as the facts of the case just cited will show. Fear held a cheque drawn by a customer of the Glastonbury branch of Stuckey's Bank on the Glastonbury branch, and, being in the neighbourhood of Bridgewater, presented it at the Bridgewater branch of the same bank. As the officers there knew him, they gave him cash for it. Had the cheque been presented at the same time at Glastonbury it would have been paid, but by the time the cheque in due course reached Glastonbury the customer had drawn out his balance and the cheque was dishonoured. The bank sued Fear for a return of the money paid for the cheque; and it was held that it must succeed, as it was under no obligation to cash the cheque at Bridgewater, and did so on the credit of Fear, and not as the bankers of their Glastonbury customer. The different branches of a bank may be separate indorsees of bills of exchange, and, on a bill being dishonoured, may each claim the usual time in which to give notice of dishonour. (Clode v. Bailey, 1843, 12 M. & W., 51.) In that case a bill of exchange was indorsed to the Portmadoc branch of the National Provincial Bank of England by a customer, and sent by them to the Pwllheli branch, and by them indorsed to the head establishment in London, on whose presentation it was dishonoured. It was held that each branch of the bank was to be considered as an independent indorsee, and entitled to the usual notice of dishonour; so that a notice of dishonour given by the Portmadoc branch to its customer in that course was good, although coming later than if sent direct from London. But in Fielding & Co. v. Corry (1895, 1 Q. B., 268) the Court of Appeal held, by two judges to one, that a notice of dishonour sent through the post by mistake to the Cirencester branch of the County of Gloucester Bank instead of to the Cardiff branch on Monday, which was the last day for giving notice of dishonour, was effectually corrected by a telegram to the Cardiff branch on the Tuesday morning, though, had the telegram been the only notice given, it would have been out of time. The decision turned on whether it was a case of directing the notice of dishonour to the wrong address or to the wrong person. Two judges thought it was a matter of wrong address, and the third that it was a matter of wrong person. Companies Act, s. 44.-As has been said on p. 67, the Companies Act 1862 requires a limited banking company to put up in a conspicuous part of the branch office, as well as of the head office, a copy of the statement of its capital, assets, and liabilities, required by the 44th section of that Act. CHAPTER IX BANKER AND CUSTOMER Definitions. Both the terms "banker" and "customer occur in Part III. of the Bills of Exchange Act 1882, which deals with cheques on a banker. The term "banker" is defined by the Act, though not to much purpose, while the term "customer" is left undefined. "Banker includes a body of persons, whether incorporated or not, who carry on the business of banking." There must be some sort of account, either a current or deposit account, before the relation of banker and customer is constituted. (Great Western Railway Company v. London and County Bank, 1901, A. C., 414.) In that case it appeared that H. obtained by false pretences from the railway company a cheque crossed "& Co.," and marked not negotiable, and took it to the bank, where part of the cheque was paid into the account of one of their customers, and the balance handed to H. The bank had for years been in the habit of cashing cheques for H. in a similar manner. He had no account or pass-book with them. It was held that H. was not a customer of the bank. General Relation.-The relation between a banker and his customer is the relation of a debtor to his creditor, or if the customer's account is overdrawn, that of a creditor |