Midland Bank v RECKITT

Aziza Ahmed Al Mahrooqi

Appeal case

Client (principal)‘RECKITT’ Attorney (agent)

‘Lord Terrington’

Cheques

A rubber stamp" Harold G. Reckitt by Terrington, his attorney." 15 ChequesSignature between lines

Pay cheques

OverdraftBring an action

Banker

V

Reckitt T & Midland Bank The defendants relied on s. 82 ofthe Bills of Exchange Act, 1882,claiming that the cheques werecrossed cheques and that theyhad received payment of them ingood faith and withoutnegligence.

He brought an action against the defendants for damages for conversion of the MIDLAND cheques + to recover the amount of 15 cheques

Principal's executor

The executor(claimant)

fifteen cheques were drawn fraudulently and wrongfully and

were paid by Lord Terrington for his own private purposes into his account with the appellant.

were guilty of (a)conversion of the cheques(b) negligence in the collection

of the cheques

‘Lord Terrington’

Midland Bank

Midland Bank(respondent)

denied any conversion ornegligence, and they alleged thatthey received payment of thecheques, which were crossed, fortheir customer in good faith andwithout negligence and wereprotected by s. 82 of the Bills ofExchange Act, 1882.

Sect. 25 of the Bills of Exchange Act, 1882, provides that ;" a signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority."

The court held ;

the defendants were liable for the amounts of the cheques as damages for conversion ;1- should had notice of the limited authority of Lord T to deal with such cheques.2-they were negligent in not making any inquiry.3-therefore failed to bring themselves within s. 82 of the Bills of Exchange Act, 1882.

Midland Bank(appellant)

V

Reckitt(defendant)

Legal analysis..Appellant claims..!

How can expect if there is a breach of trust from the beginning?!

The circumstances of the case..

In the present case the appellant rely on;

1- from the principal side..2- from the agent side..3- ratification clause..

On these grounds; 1-the appellants are entitled to the protection of s. 82 of the Bills of Exchange Act, 1882. 2-the appellants cannot be held liable as having prima facie notice of a breach of trust.

What are the agent authorities -in this case-;

1-To apply any moneys which shall come to the hands of the attorney ….2-To deposit any moneys received by the attorney ….3- To draw, accept, endorse, negotiate, retire, pay or satisfy any bills of exchange promissory notes cheques drafts…..

Then, the principal by his executor ratifiesand confirms such agent acts

conclusion of all the members of the House when he says: " It is clear(1.) that the cheque was used to liquidate the private debt

of Lord Terrington,(2.) that the defendants knew it was so used, and(3.) that the form of the cheque gave them notice that the

money was not the money of Lord Terrington. In that state of circumstances there is no evidence or any possible inference which can be drawn that the agent was applying his principal's money in discharge of any possible liability of his principal."

For the above reasons; what do you think for the appeal??

‘ I think that the appeal should be dismissed’.