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CHAPTER IX.

CHEQUES AS EVIDENCE-WHAT A CHEQUE IS

EVIDENCE OF.

74. The production of a cheque drawn by the debtor payable to and indorsed by a person, suing as creditor, is evidence of payment, and the production of a cheque indorsed by a person employed to receive payment on behalf of such creditor is evidence of payment.

(Egg v. Barnett, 3 Esp. 196.)

75.-But the production of a cheque drawn by the debtor payable to the creditor, but not having been indorsed by him nor otherwise shown to have passed through his hands, is not evidence of payment.

(Egg v. Barnett, supra, Lord Kenyon, at p. 197.) It is open to the creditor to show that the cheque was given in respect of a transaction other than that whereon he is suing. (Same case, Lord Kenyon, loc. cit.)

76. The drawer need not show that he gave the cheque to the creditor, provided there is evidence, from

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WHEN A CHEQUE IS EVIDENCE.

the creditor's indorsement or otherwise, that the cheque passed through the creditor's hands.

Mountford v. Harper, 16 M. & W. 825, explaining Lloyd v. Sandilands, Gow, 15, where, if the report be correct, Dallas, C.J., decided that proof of B. drawing a cheque (evidently a (a) "bearer" cheque) payable to A., and of A. receiving payment, is not evidence to show that B. paid the cheque to A., 'as it might have been given to a third person, and through that third person might have got into the hands of A." (at p. 16). We confess we cannot think the suggestion made in Mountford v. Harper (supra) that the word "debt" ought to be substituted for the word "payment at the end of the judgment of Dallas, C.J., is very intelligible. It stultifies the grounds of the judgment.

It appears to us that Mountford v. Harper is in conflict with Lloyd v. Sandilands.

Where a cheque is payable to "Order," the indorsement of the payee would be evidence that he received the cheque direct from the drawer, as no title can be made by delivery of an unindorsed order cheque. (Whistler v. Forster, 32 L. J. C. P. 161.)

(a) Cheques were first made payable to order by 16 & 17 Vict, c. 59, s. 19

A CHEQUE IS EVIDENCE OF REPAYMENT.

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77. The production of a cheque not presented is not per se evidence of a debt from the drawer to the payee.

(Pearce v. Davis, 1 M. & Rob. 365.)

78.-The acceptance by a creditor of a cheque in his favour drawn by the debtor operates as a payment, unless the cheque be dishonoured.

(Pearce v. Davis, supra. Bridges v. Garratt, 5 C. P. 451; Pape v. Westacott, 1894, 1 Q. B. 272.) In Bridges v. Garratt the cheque was paid to a mutual agent of the parties, and crossed to his banker, who detained it on account of a debt due to him from the agent; held a good payment against the creditor. In Pape v. Westacott the cheque was dishonoured. Where A. assigned "all outstanding debts," inter alia, this did not include cheques held by him but not yet presented for payment. The payment subsequently made related back to the time of delivery. (F. Hadley & Co. v. F. Hadley, 1898, 2 Ch. 680.)

79. The production of a cheque drawn by the plaintiff payable to the defendant, and proved to have been paid to him, is not evidence per se to establish a loan by the plaintiff to the defendant, rendering the defendant the plaintiff's debtor. It is rather in the absence of proof of any loan transactions, to be pre

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CHEQUE AS PROOF OF A LOAN.

sumed to be a repayment by the plaintiff of a debt due to the defendant.

(Carey v. Geerish, 4 Esp. 9, Lord Kenyon; Graham v. Cox, 2 C. & K. 702.)

In Aubert v. Walsh, 4 Taunt. 293, it was held that the defendant could not set off a cheque paid by him to the plaintiff, as, without further evidence, there was nothing in this to show a debt due from the plaintiff to the defendant, i.e., primâ facie the cheque was a repayment, not a loan by defendant to plaintiff.

80.-A cheque, though primâ facie evidence of a repayment, may be shown by other evidence to have been a loan by the drawer to the payee.

(Boswell v. Smith, 6 C. & P. 60. Tindal, C.J., left it to the jury to say whether a cheque for 100l. was a repayment of a debt of 321. and something more, or was a loan of 1007.)

81. The production of a cheque is primâ facie evidence, not of a loan by a banker to his customer, but of a repayment.

In Fletcher v. Manning, 12 M. & W. 57, the plaintiffs, assignees of C., a bankrupt, sought to prove a debt due to J. L. & Co., as petitioning creditors in the bankruptcy of C.

ENTRIES IN PASS-BOOK.

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They produced cancelled cheques drawn on J. L. & Co. by C., and a clerk from J. L. & Co. stated, from recollection only, that at the time when these were drawn C.'s account was greatly overdrawn. As the books were not in Court, the cheques were rejected as evidence of a debt from C. to J. L. & Co., since primâ facie they were evidence only of a repayment of a debt by J. L. & Co. to C., C. being a customer of J. L. & Co., his bankers.

82.-Where a cheque is not received as money, and is not cashed, it will not operate as evidence of a payment.

(Hough v. May, 2 H. & W. 33, where the jury found that an uncashed cheque for 87. 11s. was not received as part payment of a bill for 8l. 188., and found for the plaintiff for the latter sum, leave being reserved to the defendant to move to reduce the verdict to 7s. if the Court thought the cheque a payment. In discharging the rule, Denman, C.J., said, "The cheque of itself could not be any payment. It must have either been accepted at the time as money by the party taking it, or it must have been afterwards paid " (at p. 34).

83. Entries in a banker's pass book are not conclusive against the banker, unless the customer by