10. A banker invariably buys Money and Securities from his customer by creating a Credit in his favour. This Credit is termed a Deposit.

By the custom of bankers the contract between a banker and his customer having an ordinary drawing or current account with him, is to pay on demand, either to him or to any one else to whom the customer may assign them, whatever funds he may have at his customer's credit, within a reasonable time after be has received them, and to accept his customer's bills to that amount.

By the custom of bankers possession of funds is equivalent to acceptance, and admission of funds is a legal acceptance of a cheque drawn by a customer.

A verbal promise to pay, or a collateral writing promising to pay, or any mark such as initials placed on a cheque, the well understood meaning of which is a promise to pay, is a legal acceptance by a banker having funds of his customer.

A cheque is payment unless dishonoured, and tender of payment by cheque is good unless objected to on that account.

When a customer has placed securities in the hands of his banker, and is allowed to draw against them in a certain well understood way, the banker cannot change the well understood course of dealing, and dishonour his customer's cheques without giving him notice.

A banker who pays a cheque must cancel it by crossing out the drawer's signature under a penalty of £50.

Paid Cheques are the property of the drawers, who may demand them back at any time; unless they be overdrafts, for then the banker has a right of action on them.

If a banker cancels the drawer's signature to a cheque, and if before actual payment he discovers any reason why he should not pay it, he may withhold payment.

But if the money be actually paid over to the presenter of the cheque, even in mistake, the property in the money is gone from the banker, and he cannot retake it.

Cheques are within the "Summary procedure on Bills of Exchange Act," 19 and 20 Vict. (1856) c. 67: and may be taken in execution.

If a Cheque payable to order bear an indorsement purporting to be that of the Payee, the banker is not bound to inquire into its genuineness: and an indorsement by procuration is within the meaning of the Act.

A cheque is the assignment of a chose-in-action, and when communicated or notified to the banker by the holder is a complete assignment of the fund.

If a cheque be notified to the banker, and the drawer dies before it is paid the holder is entitled to payment.

If a banker pays a cheque with a forged signature the loss falls on him.

So if the body of the cheque be written by his customer, and fraudulently altered by another person, so as to be payable for a larger sum than originally drawn, and the banker not detecting the alteration pays it, he must bear the loss of the excess.

But if the customer authorises another person to write the body of the cheque, and that person fraudulently alters the cheque so as to make it payable for a larger sum than authorised, and so the body of the cheque is all in the same handwriting the banker will not be liable.

If a banker pays a cheque under circumstances which are evidently suspicious he must bear the loss.

A banker must pay his customer's cheques strictly in the order in which they are notified, communicated, or presented to him for payment.

He must debit his customer's account with cheques on the day they are notified to him or paid, and not on the day they are drawn.

Sums paid by a banker extinguish the debts created by sums paid to him in strict chronological order.

If a banker having funds of his customer wrongfully dishonours his cheque, or bill made payable at the bank, so that the customer suffers damage, he has an action against the banker for such damage.

But such special damage must be laid and proved.

If the customer becomes bankrupt in consequence of the wrongful dishonour of his cheque his assignees have an action against the banker.

The holder of the cheque or bill may sue the banker on the instrument.

A cheque may be presented any time within six years of its date to charge the banker; and the drawer if the banker fails.

The transferee of an overdue cheque is not subject to the equities of the transferor, as the transferee of an overdue bill.

If a customer has an account of a fiduciary nature, such as Trustee, Executor, or otherwise, a banker may not refuse to pay his cheques because he may believe that the customer intends to apply the funds in a breach of trust.

And he will not be liable to the cestuique trust if he is not privy to the breach of trust.

But if he acts in concert, agreement, and collusion with his customer in committing the breach of trust: and especially if he obtains some benefit by it as by his customer paying a debt of his own to him by means of cheques on the trust account, he must replace the trust fund.

The Statute of Limitations does not apply to a banker misapplying a trust fund.

A Credit in account, or Deposit, if taken instead of money, is good payment.