Bank of Ireland v Martin
| Jurisdiction | Ireland |
| Court | Supreme Court (Irish Free State) |
| Judgment Date | 04 March 1937 |
| Docket Number | (1935. No. 528 P.) |
| Date | 04 March 1937 |
Liability of customer to Bank on foot of guarantee - Set-off - Customer's money on deposit receipt applied by banker in discharge of his liability on foot of guarantee - Liability of banker to customer.
A banker is not entitled to apply the money of a customer, standing to the customer's credit in the books of the bank upon a deposit account, without the authority, express or implied, of that customer, in discharge of the indebtedness to the bank of another customer whose debt has been guaranteed by the depositor. So held by the Supreme Court. In 1919 P. Martinand another guaranteed payment to a Bankof all debts (but not exceeding £1,800) due, or to become due, to the Bank by one, Nicholas Mullett. In 1922 Martin, who was a customer of the Bank, opened a deposit account with them by depositing £500 at their Enniscorthy Branch and obtained a receipt therefor. In November, 1925, Mullett owed the Bank £1,390 and they by letter demanded payment thereof from Martin. On the 9th of December, 1925, the Bank by letter again demanded payment of the moneys due on foot on the guarantee "less by the sum of £500 held from you on deposit." The Bank in January, 1926, informed Martin that "your deposit receipt at this office . . . . will be applied in discharge of your liability on foot of your guarantee of £1,800 for Nicholas Mullett. . . ." In February, 1926, the Bank's agent at Enniscorthy made out a duplicate of the deposit receipt held by Martin and endorsed it: "Pd in Enniscorthy 2/2/26"; affixed a slip to it with the words following: "The amount of this deposit receipt and interest applied in reduction of Nicholas Mullett's liabilities at this office per separate letter of the 29/1/'26."The duplicate receipt was then inserted in the Deposit Account Book. On the same day an entry was made in Mullett's current account: "Cash. P. Martin, D.R. £529: 1: 9." Martinprotested against the action of the Bank and repeated his...
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