[forgery – banking]

Bank of Australasia v. Dunn

Supreme Court of Van Diemen’s Land

Pedder C.J., 15 March 1841

Source: The Launceston Courier, 22 March 1841

[1]

A case was decided in the Supreme Court at Hobart Town on Monday last of some considerable importance to the mercantile community, being the first of the kind tried in this colony.  It was an action of assumpsit, brought by the Bank of Australasia against Mr. Dunn of the Commercial Bank, for money paid. The particulars are briefly as follows:–

            Some time in the latter end of May last, or the beginning of June, a cheque for £50, signed by Mr. Salmon, was presented at the shop of Mr. Thomas by two young men, strangers to the latter; they received for this goods to the amount of about £5, and the remainder in cash. This cheque turned out to be a forgery, and was originally for £5, and but altered into £50; it was passed by Mr. Thomas into the Commercial Bank, and transferred by exchange, in the usual manner, to the Bank of Australasia, where Mr. Salmon keeps his account. The Counsel argued, that the Bank of Australasia receiving this cheque from the Bank of the defendant, was not expected to use the caution which might have been necessary had it been presented by a private person.

            A young man in the employ of Mr. Thomas as also his chief clerk, Mr. Thorpe, proved the transaction as stated by the Attorney-General; Mr. Thorpe stated that the cheque was dated the 29th of May, and paid to him on the 8th or 9th of June, and by him into Mr. Dunn’s Bank on the day following.

            Mr. Holcombe stated, that the cheque was paid into the Australasian Bank, and placed to the debit of Mr. Salmon; on examining his book, he discovered the forgery, and found that the £5 had been changed into £50; witness heard this from Salmon himself, and the same morning presented it to Mr. Dunn; Mr. Salmon has been paid his £45; on Mondays the banks exchange notes and cheques which are collected by the clerk, and paid to the teller; a note is then given for the balance, which is considered as cash; witness would not examine a cheque or bill from the Commercial Bank, as he would one brought by a stranger.

            To a question from his Honor, Mr. Holcombe stated that the cheque in question would not have been paid at the counter. In his cross-examination, Mr. Holcombe stated that it was the custom in England to take back forged cheques as soon as the forgery was discovered, even after the issue of many days; it was some days after it was paid that Mr. Salmon’s cheque was discovered to be a forgery. Mr. Holcombe here explained the method of keeping the accounts of the bank, as far as related to the present case; and stated that he would had paid the £50 without referring to Mr. Salmon’s account; even if he had referred, and found that he had not sufficient funds, he would have paid that cheque.

Mr. Jones addressed the jury at some length, contending that the Bank of Australasia had not used sufficient promptitude in making known the forgery, and returning it to the Commercial Bank; he cited some cases in support of his argument, but called no witnesses.

His Honor the Chief Justice summed up the evidence, and mentioned a case from 6 Taunton 76, in which Lord Tenterden ruled, that a delay of eight days was fatal to a similar claim. The jury retired for about an hour, and then returned a verdict for the defendant.