This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 258.— John Smith, merchant, opens a business account in his own name with the bank, and also another account subsequently, called "personal account." The first mentioned account is overdrawn while there are funds at credit of the latter. Can the bank retain sufficient funds from the credit balance to cover his liability on the overdraft ? Would the recent decision in the case of Bank of British North America v. Richards & Riley, have any bearing on such a case?
Answer.—In this case the balance in one account is due to John Smith, and the balance in the other due by him. The bank therefore has a right to set off one against the other.
We do not think the British Columbia judgment has any bearing when the facts are as in this case.