Question 183.— (1) A party having just assigned received, subsequent to assignment, two cheques, one from a creditor of the estate, and one from a friend, both drawn payable to his own order. Is the bank, knowing of the duly registered assignment, justified in cashing to the payee on his endorsement either or both cheques?

(2)   Would the bank, unaware of the assignment, and cashing in good faith, be responsible?

(3)   What is the responsibility of the drawee of the cheques in above instances?

Answer.—The duty of the bank to its customer is to cash his cheques if there be funds therefor, in accordance with the directions therein. It is a matter between the drawer of the cheques and the assignee of the insolvent, or a matter between the insolvent and his assignee, and not one for the bank to consider with respect to the effect of the assignment. The assignment does not affect the order of the customer contained in the cheques, and in the absence of instructions from the customer the bank is not only justified in honouring them but might be rendered liable for damages if it did not do so.