Cases on Banking Law

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CASES ON BANKING LAW

Westminster Bank Ltd v. Hilton (1926) 43 TLR 124

As against the money of the customer's in the banker's hands the relationship between banker and customer is that of principal and agent: "It is well established that the normal relation between a banker and his customer is that of debtor and creditor, but it is equally well established that quoad the drawing and payment of the customer's cheques as against money of the customer's in the banker's hands the relation is that of principal and agent. The cheque is an order of the principal's addressed to the agent to pay out of the principal's money in the agent's hands the amount of the cheque to the payee thereof."

Tournier v. National Provincial & Union Bank of England [1924] 1 KB 461; [1923] All ER Rep 550; 130 LT 682

As to the duty of confidentiality owed by a banker to his client: (Bankes LJ) "At the present day I think it may be asserted with confidence that the duty is a legal one arising out of contract, and that the duty is not absolute but qualified. It is not possible to frame any exhaustive definition of the duty. The most that can be done is to classify the qualification, and to indicate its limits." and "In my opinion it is necessary in a case like the present to direct the jury what are the limits, and what are the qualifications of the contractual duty of secrecy implied in the relation of banker and customer. There appears to be no authority on the point. On principle I think that the qualifications can be classified under four heads: (a) Where disclosure is under compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of the bank require disclosure; (d) where the disclosure is made by the express or implied consent of the customer." Atkin LJ: 'I do not desrire to express any final opinion on the practice of bankers to give one another information as to the affairs of their respective customers except to say that it appears...
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