Keyes v. The Royal Bank of Canada

Keyes v. The Royal Bank of Canada

The drawer was entitled to countermand the postdated cheque before its ostensible date; the bank's certification before that date, performed by oversight without reliance by its certifying employees on the drawer, did not bind the drawer; the respondent did not become a holder in due course and could not successfully treat the drawer's signature as creating endorser liability; estoppel failed. Accordingly the trial judgment for the drawer was restored under Bills of Exchange Act s.165, s.167 and related authorities.

Citation
[1947] SCR 377
Parties
Appellant/plaintiff: Aylmer M. Keyes; Respondent/defendant: The Royal Bank of Canada
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 May 1947
Procedural Posture
Civil Appeal (banks and Negotiable Instruments) / Appeal to Supreme Court of Canada From Supreme Court of Alberta, Appellate Division
Outcome
Appeal allowed; judgment at trial restored for appellant
Legal Topics
Postdated Cheque, Certification of Cheque, Countermand of Payment, Endorsement Liability, Holder in Due Course, Estoppel
Source Language
English
Banks and Banking Bills of Exchange Negotiable Instruments Contract Postdated Cheque Certification of Cheque Countermand of Payment Endorsement Liability +2 more

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Parties

Aylmer M. Keyes

Appellant/plaintiff

The Royal Bank of Canada

Respondent/defendant

Procedural Posture

Civil Appeal (banks and Negotiable Instruments) / Appeal to Supreme Court of Canada From Supreme Court of Alberta, Appellate Division

Legal Issues

  1. 1 Whether a drawer can countermand payment of a postdated cheque before its ostensible date
  2. 2 Whether a bank's certification of a postdated cheque before its date binds the drawer
  3. 3 Whether the drawer's signature on the back constituted endorsement making him liable to the bank

Ratio Decidendi

The drawer was entitled to countermand the postdated cheque before its ostensible date; the bank's certification before that date, performed by oversight without reliance by its certifying employees on the drawer, did not bind the drawer; the respondent did not become a holder in due course and could not successfully treat the drawer's signature as creating endorser liability; estoppel failed. Accordingly the trial judgment for the drawer was restored under Bills of Exchange Act s.165, s.167 and related authorities.

Court Disposition

Appeal allowed; judgment at trial restored for appellant

Orders

  • Judgment of the Appellate Division reversed and the trial judgment restored in favour of A. M. Keyes for $2,000
  • Costs awarded to appellant throughout