It is somewhat difficult to see what is meant in the ninth clause by the banker paying a crossed cheque, (according to the crossing) "in good faith and without negligence."It is his duty to pay, and the question of good faith does not arise.

The tenth clause specially meets such a case as Smith v. Union Bank.

Generally bankers are bound to honour their customers' cheques if they have funds sufficient in hand; there are, however, exceptions to this rule. In some instances they would be protected in refusing to pay, in others they could not legally charge amounts which had been paid. Thus, a banker would be protected in dishonoring a cheque if the funds to meet it had not been in his hands for a reasonable time. The question what might be a reasonable time would be for a jury to answer.

Again, he would be justified in refusing to pay a cheque, although he had sufficient funds in hand, if those funds had been placed to the credit of the drawer to meet other claims of which the cheque in question formed no part. Of course if the drawer of a cheque request the banker not to pay it, the latter would be protected in his refusal. It is customary in such cases for a banker to disclaim responsibility if such a cheque should be paid in the hurry of business; that is, he will only promise to do his best to stop it.

The bona fide holder of a stopped cheque can recover the sum from the drawer, even should it originally have been obtained by fraud.

Bankers will not pay without inquiry cheques that have been long issued, but no stated time seems to have been laid down beyond which they ought to refuse payment. It therefore appears to be left to their discretion to act according to the circumstances of each case. In practice a banker usually writes to the drawer for instructions before paying a cheque dated twelve months back. Dividend warrants frequently bear printed instructions that they are not to be paid unless presented within six months after date.

A banker who, knowing that a customer had committed an act of bankruptcy, yet pays his cheques, renders himself liable to an action by the assignees for the recovery of the money.

A banker, except by special order of the executors, must not pay a cheque if he has received official notice of the death of the drawer.

For the negligent dishonour of a cheque a banker is liable to an action for damage sustained by the drawer; the payee or holder would, however, have no remedy at law.

A banker cannot charge his customer with a forged cheque, nor for one that has been fraudulently altered, unless the drawer by his original filling up has greatly facilitated the fraud.

The following case, taken from "Byles on Bills," will explain this :

A customer of a banker on leaving home intrusted to his wife some blank cheques, signed by himself, to be used in the business when requisite. She filled up one with the words "fifty-two pounds two shillings," beginning the word fifty with a small letter in the middle of a line. The figures 52 : 2 were also placed at a considerable distance to the right of the printed £. She gave the cheque to her husband's clerk to get the money. He, before presenting it, inserted the words "three hundred" before the word fifty, and the figure 3 between the printed £ and the figures 52 : 2. It was paid by the bankers for £352 2s. Held, that the improper mode of filling up the cheque had invited the forgery, and, therefore, that the loss must fall on the customer and not on the banker. It will be observed that this is a particularly strong case, and the question may arise whether if the facts were materially weaker they would be held to exonerate the banker from liability.

A cheque is not a legal tender, and for that reason may be objected to, but having been accepted by a creditor, he cannot proceed against his debtor until the cheque has been presented and dishonored.

When a cheque has been taken in payment of a bill of exchange it is not usual to part with the bill, but to attach it to the cheque, so that the drawer will receive both together from his banker. The mere production of a paid cheque is not sufficient evidence of the discharge of a debt; it is necessary also to prove that the cheque has actually passed through the creditor's hand, which, however, can easily be done by making the cheque payable to the creditor's order.

A cheque will not suffice to prove the loan of money by the drawer to the payee; nor can a banker produce cheques paid by him as proof of an advance to his customer.

It is the practice of London bankers to return the cheques and bills of exchange paid by them on behalf of their customers with the pass books in which the debits are entered. Many country bankers do not adopt this rule, but retain the vouchers, subject, of course, to inspection.

The law on the subject seems to be that paid cheques are the absolute property of the drawers, and that if retained by the banker it is only as agent.

It is, doubtless, perfectly right and in accordance with general usage that the drawer should have his cheques as vouchers for his payments, but, on the other hand, difficulties may arise between banker and customer.

Suppose that a customer disputes an entry in his pass book, but alleges that, in accordance with his usual practice, he has destroyed the cheques. As the banker's books would probably be objected to as evidence in his favour, it would seem difficult for him to prove his case, having parted with the document that was at once the order to pay and the receipt for the money.