Kirkwood & Sons v. The Clydesdale Bank, Ltd, and Another [1907] ScotLR 3 (15 October 1907)

Kirkwood & Sons v. The Clydesdale Bank, Ltd, and Another [1907] ScotLR 3 (15 October 1907)

Upon the death of the customer, the bank's duty to pay a cheque is terminated by notice of death under section 75 of the Bills of Exchange Act 1882. The cheque, as an assignation under section 53(2), only attaches to funds available after striking a general balance over all the customer's accounts. As the overall balance was negative, there were no funds available, and the bank was entitled to refuse payment.

Citation
[1907] ScotLR 3
Parties
Pursuer: Kirkwood & Sons; Defender: The Clydesdale Bank, Limited; Defender: Robert Paterson, C.A., Judicial Factor on Moffatt's estate
Jurisdiction
Scotland
Judgment Date
15 October 1907
Procedural Posture
Civil Appeal / Appeal From Sheriff Court to Court of Session, Inner House, First Division
Outcome
appeal dismissed
Legal Topics
Cheques, Bills of Exchange, Banker's Right of Set Off, Assignation, Effect of Death of Drawer, Bank Customer Relationship
Banking Law Commercial Law Cheques Bills of Exchange Banker's Right of Set Off Assignation Effect of Death of Drawer Bank Customer Relationship

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Parties

Kirkwood & Sons

Pursuer

The Clydesdale Bank, Limited

Defender

Robert Paterson, C.A., Judicial Factor on Moffatt's estate

Defender

Procedural Posture

Civil Appeal / Appeal From Sheriff Court to Court of Session, Inner House, First Division

Legal Issues

  1. 1 Whether a cheque presented after the death of the drawer operates as an assignation of funds in the hands of the bank under section 53(2) of the Bills of Exchange Act 1882.
  2. 2 Whether the bank is entitled to strike a general balance over all the customer's accounts, including secured loan and cash accounts, in determining if funds are available to meet the cheque.

Ratio Decidendi

Upon the death of the customer, the bank's duty to pay a cheque is terminated by notice of death under section 75 of the Bills of Exchange Act 1882. The cheque, as an assignation under section 53(2), only attaches to funds available after striking a general balance over all the customer's accounts. As the overall balance was negative, there were no funds available, and the bank was entitled to refuse payment.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed.
  • Interlocutor of the Sheriff-Substitute affirmed.