BLADES EAST & BLADES Partners: Sir Rowland Blades, M.P., Alfred Fletcher Blades, Laurence Henry Blades. DOUBLE Protective cheque PRINTERS, STATIONERS, etc. Estimates and Specimens sent Post Free on Application. Telegraphic Address "Identical," London. Offices :-No. 723 Bank, and Telephone: Works:- No. 459 London Wall, and Publishers of the following Technical Books LEGAL DECISIONS AFFECTING BANKERS, Vol. II.-Containing a selection of cases reported 1900-1910. Edited and annotated by Sir JOHN PAGET, Bart., K.C., and issued under the sanction of the Council of the Institute. 6/- nett; postage 6d. BOOK-KEEPING AND OTHER PAPERS.-By GERARD VAN DE LINDE, Second Edition, 7/6; postage 6d. EXAMINATION QUESTIONS IN BOOK-KEEPING.-With Illustrations and Methods of Solution, with Answers. By EDWARD HARLOW. 2/6. Postage 3d. HOW TO CORRECT PRINTERS' PROOFS.-Invaluable to Authors and others unacquainted with the Technical Marks of Printers. 6d. post free. THE QUESTIONS SET at the Preliminary Examinations (all subjects) of the Institute, and the ANSWERS thereto. By P. E. BARTON, Barristerat-Law. April, 1902, 1903. 1904, 1905, 1906, 1907, 1/3 each nett, post free BILLS OF EXCHANGE.-Four Lectures delivered before the Institute of Bankers, on Bills of Exchange, introductory to the Codifying Act of 1882. By A. K. LOYD, Esq., K.C. 3/6 nett; postage 6d. City Offices 23 ABCHURCH LANE, LOMBARD STREET, E.C. 4. Works: LEONARD STREET, FINSBURY, E.C. 2. When writing to Advertisers please mention this JOURNAL All communications respecting Advertisements should be addressed to 23, Abchurch Lane, E.c. Teneral The Institute of Bankers JANUARY, 1921. NOTES ON RECENT EVENTS. The necessary consent to the closing of the banks to the public on January 1st was obtained this year, but it is an open secret that the Treasury, in giving their consent, stated that they did so for the last time. The reason for this attitude is, we believe, that the concession Closing the Banks was made on the ground of the depletion of the bank staffs by the war, and that with the removal of the cause of the concession the banks must revert to the pre-war practice. This is doubtless true enough, but we think that if it were generally known what a strain is thrown upon the staffs of the banks by the half-yearly balance, necessitating their remaining at work in many cases till midnight, and that the closing to the public on January 1st and July 1st does not mean a holiday for the staff, there would be little opposition on the part of the public to a continuance of the concession. Priority of In the case of "Hudston v. Viney," heard in the Chancery Division on October 19th last, and reported in the Solicitors' Journal for November 6th last, a case of some interest to bankers was decided. The facts were that a bank had taken a legal mortgage from Hudston of property upon which the trustees of a marriage settlement had an earlier equitable charge, and the equitable mortgagees claimed priority over the bank's legal title on the ground that the bank had been grossly negligent. 66 The general rule of law is that a legal mortgage has priority over an earlier equitable mortgage of which no notice has been received, but, as laid down in the case of Oliver v. Hinton " (1899, 2 Ch. 264), the legal mortgagee may be deprived of his priority if he should be guilty of such gross negligence as to make it unjust that he should retain his priority. In that case the gross negligence B consisted in the fact that the legal mortgagee did not insist on the production of the title deeds. In the case we are now considering the bank obtained possession of the principal title deed, but it was admitted that they did not investigate the title, and it was contended that had they done so they would have discovered the prior equitable charge, of which therefore they must be held to have constructive notice. Mr. Justice Eve, however, refused to take this view, and though he declined to lay down any general principle, he held that in the circumstances the bank was not grossly negligent and was not therefore deprived of its priority. A case of real hardship to a bank has recently been decided in a London County Court. A Receiving Order was made against a debtor, who appealed against the order, The Date of a and pending the hearing of the appeal Receiving Order. the Court ordered a stay of the advertisement of the Receiving Order. About a month later the appeal was heard and dismissed, and the Receiving Order was then advertised. Meanwhile, the debtor's bankers, who had heard nothing of the proceedings, had continued the debtor's account and had received credits amounting to £157 and paid cheques amounting to £191. The Trustee in Bankruptcy claimed repayment of the sum of £157 on the ground that the bank had dealt with the money after the date of the Receiving Order, although the Order had not been advertised. 66 66 The County Court judge held that the Trustee's contention was right in law though inequitable. "The present is a hard case on the respondents," he said, "for they acted in good faith and without knowledge of the Receiving Order. But although such matters increase the difficulties of banks and other trading concerns, I do not think such considerations justify me in giving protection to transactions which do not appear to be protected by the language of the Act or Rules, or of any decision of the superior Courts." 66 66 It is believed that the matter will not be allowed to rest where it is, and that the bank will appeal to the High Court. Whatever the judgment of the latter may be, it is evident that the case points to a serious weakness in the bankruptcy law, of which trustees in bankruptcy, now that publicity has been drawn to the fact, will in all probability not be slow to take advantage. Apart from any question of a stay of advertisement such as occurred in the case we are considering, there is always a delay of a few days, maybe a week or more, between the date when the Receiving Order is made and the date when the advertisement of it appears in the Gazette and the local newspaper. Such public advertisement is, of course, made as a warning to, and a protection for, the public in its dealings with the debtor, and it is therefore obviously fair that, in the absence of other notice, transactions with the debtor should be protected, not up to the date of the Receiving Order, but up to the date when the advertisement of the Order appears in the Gazette or the local paper, whichever is the later. Lloyds Bank v. * was The judgment of Mr. Justice Rowlatt in the King's Bench Division which was reported in the Journal for October last, pp. 237 and 273, has not survived the defendant's appeal. It will be remembered that the chief point involved whether Lloyds Bank could be considered holders for value of a cheque which was no longer in their possession, as they had returned it to their customer. Mr. Justice Rowlatt said: It (i.e., the cheque) was lying at Barker's club “in London in a letter until a few days ago, and all that time the bank were entitled to have it; it was their security; they were the holders all the time, and holders for value." 66 66 66 This view the Court of Appeal declined to uphold, and Lord Justice Bankes, in a judgment in which Lords Justices Atkin and Younger concurred, allowed the defendant's appeal on the ground that the bank were not holders of the cheque at all. Unemployment The Bank Officer, in its issue for November, discussing the formation of a Special Scheme for bank employees under the Unemployment Act, states that the British Bankers' Association submitted a scheme produced by the Association after consultation with the Internal Staff Associations, which was not accepted by the Ministry of Labour, and that subsequently a joint scheme of the British Bankers' Association and the Institute of Bankers was submitted and also rejected. The real facts of the case are as follows. The Institute of Bankers has had nothing to do with the question. All that has happened so far is that the British Bankers' Association drew up the rough outlines of a scheme, without consulting the Internal Staff Associations or any other body, and asked the Ministry of Labour whether a definite scheme on such lines would obtain their approval. The Ministry, as requested, returned the draft with their criticisms, and the definite scheme has been accordingly drafted and is still under consideration by a Committee of the British Bankers' Association. When the late Lord Faber joined the Board of the London County Westminster and Parr's Bank it was generally felt that this foreshadowed a closer connection The Amalgamation of between that bank and Messrs. Beckett Messrs. Beckett & Co. and Co., and the announcement of a and the "County and provisional agreement for an amalgamation of the two businesses was, thereWestminster." fore, no surprise. The transfer will take effect as from January 1st, 1921, and Mr. Gervase Beckett, M.P., and Mr. Rupert Beckett will join the Board, a local board being formed from the existing partners of the private bank. It is announced that the outstanding note issue will, after the date of the amalgamation, be honoured by the County and Westminster. The disappearance of this fine old bank, established as long ago as 1750, brings us very near indeed to the end of English private country banking, for the only private country bank of any importance left is that of Messrs. Fox, Fowler & Co., who are now the only bank in England and Wales retaining the right to issue bank notes, excepting of course the Bank of England. * Mr. Goodenough on Mr. F. C. Goodenough, the Chairman of Barclays Bank, gave an address to the Liverpool and District Bankers' Institute on December 6th last, in which he offered a lucid explanation of the Indian "Gold "Exchange Standard," and the effects of the war and the Indian post-war legislation upon the currency system of that country-a subject which is "caviar to the general.' Perhaps the most interesting part of the address is Mr. Goodenough's suggestion that the experience gained in stabilizing the Indian Exchange should be applied to the task of bringing some sort of order into the European Continental Exchanges. "The "adoption of a Gold Exchange Standard," he says, " or preferably " and more easily a Sterling Exchange Standard, upon the same "lines as those adopted in India and elsewhere, would serve to bridge over the period of time until trade could return to its normal conditions and the currencies could be restored to a 66 gradually improving basis of value.” But he is careful to point out that just as it was necessary in India, before establishing the Gold Exchange Standard, to close the Mints to silver, so is the analogous step in Europe, the closing down of the printing press to the manufacture of further currency, an indispensable preliminary to this or any other method of reconstruction of the shattered exchanges. |