A BANKER’S LIEN.

New Zealand Times, Volume XXXIV, Issue 5847, 25 December 1879, Page 3

A BANKER’S LIEN.

A case of interest: to bankers came before the Judicial Committee of the Privy Council on Friday 6th June. la 1858, Mr. Hugh Glass, a merchant at Melbourne, opened an account, with the London Chartered Bant of Australia, and gave then a' letter of lien, by which* he agreed that the bank should have a lien upon all securities he deposited with them. Ten years afterwards he obtained from the baht an advance of £40,000, for which, in addition to bis promiuory note, he gave two securities, one of them being a mortgage to himself of certain sheep runs and stock, with an endorsement purporting to transfer the property'*'to the bank. The promissory note was renewed from. time to time until in 1869 it was dishonored, and' the bank' then took possession of ,the estates. In the meanwhile, however. Glass bad executed second mortgages of the property to.third parties; and when Glass' failed the question came to be: how the proceeds of the estates Were to be applied. The bank contended that the! "erin 1858, and their whole transactions Hass, authorised them to treat the mort;,;. applicable to his general account, upon wi.ic.i there was a large balance of indebtedness, whereas the the second mortgagees held that they were only applicable to the-setUement of-the specific of £40,000. The case was decided »gain*t the

hank in the lower and supreme courts, and on appeal the judgment of these courts has been unstained by the Judicial Committee of the I’rivy Council. The decision of their lordship-*, however, appears to be based not upon the /enoral principles of the law on the subject, but upon some points of procedure. They distinctly stated that in their opinion the law that “bankers must undoubtedly have a general lien on all securities deposited with them as bankers by a customer, unless there be an exoress contract, or circumstance to show an implied contract inconsistent with a lien. When the case has ben tried, however, several side issues were raised by the bank, and this main question was treated as immaterial, and as it was upon these minor points that the decisions of the lower courts were based, their lordships were not disposed to go beyond them in dealing with the appeal, which they accordingly dismissed. The decision, therefore, does not affect the principle that bankers have a general Hen upon securities. Its importance consists chiefly in showing the necessity for great care on the part of hankers in preparing these forms for obtaining securities.— Economist,