day his examination was adjourned till the following Monday, but on that day he did not appear. He, however, sent a letter excusing himself on the ground of ill health, and the necessity he found himself under of investigating certain books and accounts before he made any further revelations. This excuse was deemed unsatisfactory, and a warrant, on the application of the opposing creditors, was immediately issued for his apprehension; but when he was sought for he was non est, and from that time to the present it is understood that nothing whatever has been heard of him. So the matter rests. Although not in person Mr. Stephens was again brought before public notice on the 18th December, when an action was brought against him in the Court of Exchequer by the directors of the Oriental Bank (who took up the business of the Eastern Bank) to recover the amount of a bond which he had given to the latter establishment for money advanced, &c., and the jury, without hesitation, returned a verdict for the plaintiff, for £6,011 6s., 5d.

[We have lengthened reports of these proceedings in type, but are compelled to postpone their insertion to our next number.]

THE CITY OF GLASGOW BANK.

A NUMEROUS meeting of the shareholders of this bank was held at Glasgow on the 1st December, Mr. Andrew Orr presiding. The meeting unanimously agreed that the bank be registered in terms of the Joint-Stock Bank Companies' Act, 1857, it being explained that the design was not to wind up, but to secure the same vantage ground as the chartered banks. The meeting also agreed unanimously that a committee of gentlemen unconnected with the bank be appointed to investigate its affairs, and report to an adjourned meeting on the 8th December, and that a guarantee fund of half a million be raised to enable the bank to resume business without delay. On the day named the report was presented, and stated that the balance of assets amounted to £667,533, thus showing a deficiency in the capital account of £77,576; the deficiency was caused by the depreciation in railway and other securities held by the bank, which might yet be made up. A resolution was passed, that the affairs of the bank were such as to warrant an immediate resumption of business, and that the directors be instructed to take the necessary steps for that purpose. It was stated that £500,000 in hand would be necessary before resumption, and steps were being taken to raise it immediately, either by deposits or by a guarantee fund. The liabilities of the bank were £4,455,000; the assets, after deductions as stated above, £5,107,000, to which was added £15,640, being a half-year's profit.

THE WESTERN BANK OF SCOTLAND.

A MEETING of the shareholders of this bank was held at Glasgow on the 2nd December, Mr. James Dunlop, the senior director, in the chair. About 400 were present from all parts of the country. It was resolved to register the company under the Joint-Stock Banking Companies' Act of 1857. The Chairman said that the best endeavours of the directors had been thwarted by the late manager, who disregarded their express instructions and gave great advances to unworthy persons. The directors in their report

said their chances in resuming business were lessened by the provincial agents going over to the Edinburgh banks. The agents who had already seceded represent £2,000,000 of deposits, and agents representing £1,000,000 more were in the act of seceding.

A committee of shareholders was appointed to go over the books along with the directors, and report to an adjourned meeting on the 17th of December.

A proposal was made to resuscitate the bank, but it could not in the meantime be entertained.

At the adjourned meeting on the 17th, the report of the committee of investigation was given in. It stated that the liabilities of the bank were £8,911,0327.; the assets for payment of the liabilities were £8,607,2401., showing a deficiency of assets of £304,692, and thus making, including the capital and rest, reported in last statement at £1,715,892, an estimated loss on the whole transactions of the company of £2,020,548. The heads under which the deficiency arose were minutely stated. On bills held by the bank the loss was £437,000; on advances and balances on current accounts, £885,000; on securities held in New York, £60,000; on debts in suspense account, £685,000, and other items. The assets were valued as for windingup, not as a solvent and going concern; but with prudent management and better times, there might yet be a great saving on the estimated loss.

The bank's misfortunes were attributed to gross negligence on the part of the directors, and wild recklessness in Taylor, the late manager. After a stormy discussion the committee was reappointed.

The shareholders were again to meet on the 30th December to take steps for winding up.

SUSPENSION OF THE WORCESTER BANK OF MESSRS. FARLEY, LAVENDER AND CO.

THE stoppage of the bank of Messrs. Farley, Lavender and Co., of Worcester, was announced on the 11th of December. The bank had been established upwards of 60 years, but had for some time been declining. It had a privileged circulation of £15,463, but the amount of notes outstanding at the time of the suspension was not much above £4,000.

The first meeting of the creditors was held at Worcester on the 21st, to receive a statement of liabilities and assets. T. G. Curtler, Esq., presided, and there was a large attendance. The proceedings occupied about two hours, but were unanimous.

Mr. Pidcock, attorney for the bankrupts, Messrs. Owen and Gutch, laid before the meeting a history of the bank from 1844, when the firm consisted of Messrs. Farley, Lawrence, Owen and Gutch, and the capital was £30,000, of which Mr. Farley contributed £10,000, Mr. Lawrence £10,000, and Messrs. Owen and Gutch £5,000 each. Mr. Lawrence, who was Mr. Gutch's father-in-law, lent him his £5,000, and also lent Mr. Owen £1,500. These sums are still owing to his executors. When Mr. Farley and Mr. Lawrence died, the present partners, Owen and Gutch, continued the firm with a reduced capital. There was about £5,000 in cash and good bills in the bank when it suspended payment.

Mr. Kettle, accountant, produced their statement of liabilities and assets. The total liabilities were £89,451 15s. 2d., and of assets £49,659 3s. 11d., leaving a deficiency of £39,792 11s. 3d. The separate estate of Mr. Gutch showed credits to £6,810, and debits £10,500, including the £10,000

owing to Saunders' executors, and Mr. Owen's separate credits were £2,905 and debits £3,179 16s.

The Chairman announced that Miss Saunders was willing to forego her claim for £13,750 due to her as executrix of her father, if the general creditors would not attack Mr. Gutch's life interest in a property worth about £1,500, he being in his eighty-second year. There was also a sum of about £4,000 sterling in the funds, which she intended to appropriate in liquidation of the poorer class of claimants under the estate.

The announcement was cheered, and a resolutien was passed for proceeding with the bankruptcy and approving of what had been done; and also recommending J. W. Willis, Esq., and Mr. J. B. Read, merchants, as assignees.

A vote of thanks to the chairman closed the proceedings.

Banking and Commercial Law.

THE LAW RELATING TO CROSSED CHEQUES.

A CASE on the subject of crossed cheques has just been decided in the Court of Common Pleas which has attracted considerable attention, and appears to disturb what was supposed to have been settled by previous decisions or by the late Act 19 and 20 Vict. c. 25.

We do not share in all the apprehensions which have been publicly expressed on this subject, and we think the particular decision in question may be supported without causing inconvenience, but we entirely disapprove of the reasons assigned by the court for its judgment, which, with great deference and respect, we submit are not satisfactory to the banking or the legal professions.

The facts of the case are very simple. The customer of a banker drew a cheque and crossed it so carelessly that the crossing was easily obliterated, without leaving any appearance of alteration on the cheque; and the bankers, without knowing it had been crossed, paid it to a party who had improperly acquired it. The jury found that no negligence could be imputed to the bankers, and after discussion before the full court it was held that the bankers were not liable.

Now we are not disposed to argue that this decision was wrong, and it appears to us that if it had been otherwise it would have been very hard on the bankers, and would have increased unduly the risks attending the conduct of their business.

We would let the judgment rest on the simple and rational

ground that the plaintiff had not taken all the precautions he might have taken when he crossed the cheque to prevent the crossing from being removed, and had thereby caused his own misfortune. It is true the jury found there was no negligence on the part of the plaintiff or the bank, but it is undeniable that the crossing might easily have been made so as to defy any alteration which could not readily have been detected. The cheque, we presume, was inspected by the jury, and if it appeared from such inspection that the cheque had been tampered with and a crossing obliterated, we think the bankers would have been justly liable to bear the loss resulting from the payment. We are bound, however, to assume that the ordinary inspection of the cheque did not disclose that it had been crossed. The question is then brought within the ordinary rule, that when a loss is to be borne by one of two innocent parties it must fall upon that party whose acts have most contributed to the loss.

We should have thought this view borne out by the cases of Whitmore v. Wilks, and Young v. Grote, referred to in Shaw on Cheques, page 28.

The Court of Common Pleas seems to have proceeded on different grounds, and to have maintained positions which deprive the custom of crossing of all utility.

Mr.Justice Cresswell said, "This case depends upon the effect to be given to the statute 19 and 20 Vict., c. 25, 'An Act to amend the law relating to drafts on bankers.' Before the statute was passed, a customer of a bank, by drawing a cheque and writing across it the name of another banker, did not limit the authority of the drawer to paying the party or firm whose name was so written across it. It did not amount to a direction to the drawer, but had the effect of calling for vigilance on his part; and where a banker had paid otherwise than to the party so designated, it was held that the question was not whether he had acted contrary to orders, but whether he had been guilty of negligence."

Thus far the judgment appears to us to support the argument we have maintained. Crossing was to a certain extent supported by the law. It had legal consequences. It called for vigilance on the part of the banker, and all the facts of any case would have to be submitted to a jury, who would say whether by paying a crossed cheque to a party not being a banker, the drawer had been guilty of negligence. Such a question could not arise on the payment of a cheque either not crossed or not presenting a suspicious appearance.

The law, although not so effective as the public had supposed,

still gave some protection, and we apprehend that protection was intended to be increased rather than diminished by the recent act.

The judge proceeds :-"It formed no part of the instrument itself, and in no way altered its effect." (See the judgment of Parke, Baron, in Bellamy v. Majoribanks, 7 Ex., 403.)

Here we think the judge's expressions must not be taken literally, because we see that the effect certainly was different when there was a crossing to what it was when there was no crossing.

He continues thus :-"This statute was passed for the purpose of making such matter written across a cheque, whether written by the drawee or payce, operate as a direction to the banker to pay in that mode, and to render the cheque payable in that mode only. I think the statute must mean that the cheque is to bear the crossing when presented. If so the cheque in question did not bear it, and the banker was not prohibited from paying it otherwise than to or through a banker."

Here we think an attempt is made to extend the statute at first, and then to limit it afterwards, which is not warranted. In our opinion, it never was intended by the statute to make the banker liable in a case like the present, or to exempt him from liability for the reason assigned.

The drawer or payee ought to cross so as to guard against erasure, and then if the cheque shows that a crossing which once existed has been obliterated, the banker ought not to pay, except through a banker, or after inquiry.

The case is still further obscured by the confusion in which Mr. Justice Cresswell and also the Chief Justice involve themselves, when they apply the rules relating to forgery to the question. We would answer all that is said in this point by observing that, although an instrument may be a forgery, as regards the conduct and punishment of the guilty party, yet it may operate as a valid instrument, as affects third parties. The case of Young v. Grote is a familiar instance of this position.

In commenting thus freely on the judgment in this case, we are aware that much difficulty is created by the duty of the judges to give effect to the revenue laws and to mercantile customs at the same time.

The stamp acts require a cheque to be payable to bearer, the custom of crossing requires payment through a banker; the Courts, anxious to reconcile both, have declared the effect to be that the banker must pay to bearer through a banker, or make inquiry. In practice this has worked tolerably well, and we do not think the decisions in Bellamy v. Majoribanks,