This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 47.— A bill drawn on and accepted by two drawees is made payable at a bank. Is the bank authorized at the maturity of the bill to pay it and charge it to one of the two acceptors?
Ansioer.—The bank has clearly no authority (in the absence of some special agreement) to pay such an acceptance and charge it to one of the acceptors. We also think that if the bank had become the owner of the bill before maturity, and held it when it fell due, it would not (in the absence of agreement) have the right to set off the amount against one of the acceptors. "Set-off" must not be confounded with " counterclaim." If the acceptor, having a balance to his credit, should sue the bank therefor, the bank might counterclaim in the action against him and the other acceptor for the amount of the bill, and thus practically obtain payment in this way—but this depends not upon the law of set-off, but upon the practice of the court, and in some countries " counterclaim" is not allowed—the defendant must bring a cross action.