This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 844.— A customer of a bank, who has become insane, has a balance at his credit. Before becoming insane he accepted drafts payable at the bank. The manager of the bank knows that the customer has been placed in an asylum, but has not been notified by anyone of his insanity. Would the bank be safe under such circumstances, in charging the acceptances to the customer's account.
Answer.—The insanity of the customer, to the knowledge of the bank, has the effect of revoking this authority, and the bank would not be justified in paying the acceptances. That the bank have not been officially notified of the customer's insanity does not signify; the fact that it is known to them is sufficient.