Question, 285. - Bank A wires bank B as follows: "We have cheque of John Smith on you for $2,000. Will you pay on presentation"? To which bank B replies: "Cheque of John Smith for $2,000 good if signature in order." The following day John Smith stops payment of the cheque by wire, and bank B telegraphs bank A that payment of the cheque has been stopped. The cheque is presented in due course by bank A. Must bank B remit for the cheque or act on the instructions of its customer and refuse payment?

Answer. - A bank has no right to debit the amount of a cheque to its customer's account until the cheque is actually presented, and the customer has unquestioned control over his balance until actual presentation takes place. Bank B must therefore act upon the instructions of its customer and refuse payment. Bank A as holder of the cheque would still be entitled to such recourse as is open to it against the drawer, but whether or not it could recover from bank B would depend upon the legal effect of the answer given and the extent to which its position may have been prejudiced thereby.