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C. A.

1905 MAGUIRE

v.

LIVERPOOL

management, and should be uniform throughout the whole of the borough. Then, as regards the streets, the provisions which deal with those are in ss. 36, 37, and 38, which, as was correctly pointed out in argument, resemble the Public Health CORPORATION. Act of 1875, ss. 144 and 149. These sections standing by themselves certainly do not, read in the light of the decision of the House of Lords in Cowley v. Newmarket Local Board (1), impose any new liability..

Stirling L.J.

Then we come to s. 58, which has already been referred to; and I will also refer to s. 160, which shews that though the various parishes and townships which then constituted the borough were brought under the control of the corporation for the purposes mentioned, yet it was provided that for rating purposes they should be separate districts. And by s. 161 it was also provided that the mayor, aldermen, and burgesses should continue out of the borough fund to pay the sum of 50007., as to which a liability was imposed by the Act of 1830. Are we to infer, looking at the Act as a whole, that these provisions, more particularly those which I have enumerated, and reading all the sections together, intended to impose a new liability on the corporation, and to make the corporation liable for nonfeasance where the parish would not have been liable? I am unable to arrive at that conclusion. It seems to me that s. 58 was merely intended to provide convenient machinery by which the remedy of indictment might be put in force, and that the person who complained of non-repair should not be driven to consider what person or persons, whether corporation, or parish, or township, were the proper parties to be indicted, and that the indictment should lie in such a case against the corporation. I cannot see under s. 58 any intention on the part of the Legislature to impose a liability which previously did not exist. For these reasons I agree that the appeal ought to be allowed.

Appeal allowed.

Solicitors: F. Venn & Co., for E. R. Pickmere, Town Clerk, Liverpool; Charles Russell & Co., for T. P. Maguire, Liverpool.

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VINDEN v. HUGHES.

Cheque-Forged Indorsement-Payee a Fictitious or Non-existing Person"
-Belief or Intention of Drawer-Bills of Exchange Act, 1882 (45 & 46
Vict. c. 61), s. 7, sub-s. 3.

The plaintiffs, market salesmen, had in their employ a confidential clerk and cashier whose duty it was to fill up cheques payable to the order of various customers of the plaintiffs with the names of such customers and the amounts payable to them respectively, to obtain the signature of the plaintiffs thereto, and then to post the cheques to the customers. In the course of the years 1901 to 1903 the clerk made out twenty-seven cheques to the order of various customers, amounting in all to 4877., obtained the signature of the plaintiffs thereto, and misappropriated them, and, having forged the indorsements, negotiated them with the defendant, who gave full value for them in good faith and obtained payment of them from the plaintiffs' bankers. On an action to recover from the defendant the amount so received:

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Held, that in the circumstances of this case it was impossible to come to the conclusion that the plaintiffs when drawing these cheques had used the names of their customers by way of pretence only, and consequently that the payees were not" fictitious " persons within the meaning of s. 7, sub-s. 3, of the Bills of Exchange Act, 1882, that the fraudulent indorsements by the plaintiffs' clerk were no authority to the defendant to hold these cheques, and that the plaintiffs were entitled to judgment for the amount claimed.

Bank of England v. Vagliano Brothers, [1891] A. C. 107, and Clutton v. Attenborough & Sons, [1897] A. C. 90, distinguished.

THIS was an action to recover a sum of 4871., the value of twenty-seven cheques drawn by the plaintiffs and cashed by the defendant in the circumstances hereinafter stated, which raised the question whether the payees were "fictitious" within the meaning of s. 7, sub-s. 3, of the Bills of Exchange Act, 1882, which provides that, "Where the payee is a fictitious or non-existing person, the bill may be treated as payable to bearer." The facts were as follows: The plaintiffs, Messrs. Vinden & Rogers, were salesmen in Covent Garden Market. The defendant was a draper in the Brixton Road. From the year 1896 to the year 1903 the plaintiffs had in their employment a cashier and confidential clerk named Rowland Cross; part of his regular duties was to fill up

1905

March 7.

1905

VINDEN

V.

HUGHES.

cheques payable to the order of customers of the plaintiffs, who were growers for whom fruit and vegetables had been sold, with the names of the customers and the amounts payable to them respectively; these cheques were then submitted to the plaintiff Vinden, the partner who attended to this particular part of the business, who signed them, and they were then sent off by post to the customers in the usual way. At times a slightly different practice was adopted, namely, when it was probable that the plaintiff Vinden would not be at the office on the day when cheques had to be sent out, he used to sign a few cheques in blank, leaving the names of the customers and the amounts to be filled up by Rowland Cross afterwards, as required.

During the years 1901, 1902, and 1903 Rowland Cross drew twenty-seven cheques, amounting in all to 4877., obtained the signature of the plaintiff Vinden thereto, and then, instead of posting them to the various customers, took them away and appropriated them, and, having forged the indorsements, obtained cash for them from the defendant, who was a neighbour of his, and at whose shop Rowland Cross and his wife were in the habit of dealing. The defendant passed these cheques through his own banking account, and had the proceeds placed to his credit. Some time in 1903 the plaintiffs had occasion to dismiss Cross, his frauds were discovered, and he was prosecuted and convicted. No imputation was made against the defendant, who had also been deceived by Cross, whom he had at the time every reason to believe to be a respectable person, and a customer whom he had been willing to oblige by changing cheques for him, and the question was argued as one of law-namely, which of these two innocent persons was to suffer through the fraud and forgery of Cross.

The actual cheques had been destroyed in the usual course of the plaintiffs' business, so that it was not possible to prove at the trial the exact date on which they were signed, and the dates taken were those on which they were debited against the plaintiffs by the bank in the pass-book. With the exception of one cheque for 201., in favour of a customer for an amount actually due at the time that cheque was believed to

have been drawn, and in respect of which 201. had been paid into court by the defendant, all the cheques were treated in the argument as having been filled up for sums not actually owing to the respective customers therein named at the time the cheques were signed. It was also admitted for the purposes of this case that there was no material difference between cheques filled up with the names of customers and amounts before signature, and cheques signed in blank and filled up afterwards by Cross with names and amounts.

The action was tried with witnesses before Warrington J. sitting as an additional judge of the King's Bench Division, but there was practically no dispute as to the facts.

M. Lush, K.C., and Ashton Cross, for the plaintiffs. In order to keep this money the defendant must shew either that he is a holder in due course, or that, by reason of the circumstances under which these cheques were signed, the names were "fictitious" names within the meaning of s. 7, sub-s. 3, of the Bills of Exchange Act, 1882; but as the payees in each case were customers of the plaintiff whom Vinden at the time of signing these cheques intended to pay, they were not "fictitious" payees, and the case is distinguishable from Bank of England v. Vagliano Brothers (1) on that ground. In Bank of England v. Vagliano Brothers (1) the fraudulent clerk manufactured a document which never was a bill of exchange at all, because nobody ever drew it: it was a forgery from first to last; the name of the payee was never intended to be the payee, and by fraud the acceptor was induced to accept a thing which never was a bill of exchange. The cheques here were perfectly genuine, the payees were all well-known customers, and the drawer at the time intended to pay them the amounts named. Clutton v. Attenborough & Sons (2) is not applicable to the present case, for there the House of Lords had only to consider the meaning of the word "non-existing" person. In both those cases there never was a contract; in the present case there was a contract to pay, and these cheques were perfectly good negotiable instruments: that is the main distinction (2) [1897] A. C. 90.

(1) [1891] A. C. 107.

VOL. I. 1905.

3 H

2

1905

VINDEN

V.

HUGHES.

1905

VINDEN

v.

HUGHES.

between the present case and Bank of England v. Vagliano Brothers. (1)

[Gibson v. Minet (2) and Gibson v. Hunter (3) were also referred to as illustrating the earlier history of the Bills of Exchange Act.]

Secondly, the defendant is not a holder in due course; there were suspicious circumstances about these cheques in the hands of Cross which ought to have put the defendant upon inquiry; having made no inquiry, he obtains against the plaintiffs no better title than Cross had: London Joint Stock Bank v. Simmons. (4) On either of these grounds the plaintiffs are entitled to succeed.

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S. T. Evans, K.C., and Bailhache, for the defendant, were not called on with reference to the question of the defendant being a holder in due course. As to the payees here being "fictitious," the observations of Lord Halsbury and Lord Herschell in Bank of England v. Vagliano Brothers (1) are conclusive. There were two points in that case-first, that the contract was altogether fictitious; and, secondly, that the indorsee was a 66 fictitious person. There was no contract in the present case. The payees could not have sued; they could not have given a discharge; there was nothing to give a discharge for; there was no indebtedness. If these cheques had come to the hands of the payees they would have had no right to pass them on or hold them; the money was not due to them; the whole transaction was fictitious, and quâ this transaction they were "fictitious" persons. In Bank of England v. Vagliano Brothers (1), Petridi & Co. were real persons, and Vagliano, the acceptor, intended to pay them, just as here Vinden intended to pay these customers, and yet the payee was held to be "fictitious." That case exactly covers the present. In Clutton v. Attenborough & Sons (5) the facts are very like the present, and the reasoning of that case applies. The plaintiffs' claim, therefore, fails, and the action should be dismissed.

(1) [1891] A. C. 107.

(2) (1791) 1 H. Bl. 569; 1 R. R. 754.

(3) (1793-4) 2 H. Bl. 288; 1 R. R. at p. 756.

(4) [1892] A. C. 201, at p. 217.

(5) [1897] A. C. 90.

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