Bank of Ireland v Martin

JurisdictionIreland
Judgment Date04 March 1937
Date04 March 1937
Docket Number(1935. No. 528 P.)
CourtSupreme Court (Irish Free State)
[H. C., S. C., I.F.S.]
Bank of Ireland
and
Martin

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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5 cases
  • Flanagan v National Bank
    • Ireland
    • High Court
    • 25 March 1939
    ...contract authorising such an appropriation, and, therefore, applying the decision of the Supreme Court in Bank of Ireland v. MartinIR, [1937] I. R. 189, that such an appropriation could not be made. As regards the bank's claim to set off the plaintiff's liability on the promissory notes aga......
  • O'Meara v Bank of Scotland
    • Ireland
    • High Court
    • 28 October 2011
    ...1 AER 98 ANALOG DEVICES BV v ZURICH INSURANCE COMPANY 2005 IR 274 WESTMINISTER BANK v HALESOWEN 1972 1 AER 641 BANK OF IRELAND v MARTIN 1937 IR 189 GELDOF METAALCONSTRUCTIE NV v SIMON CARVES LTD 2010 4 AER 847 FEDERAL COMMERCE v MOLENA ALPHA INC 1978 3 AER 1066 PAGETS LAW OF BANKING 13ED 20......
  • Freaney v Bank of Ireland
    • Ireland
    • High Court
    • 30 July 1975
    ...to set off the total amount due to them on the suspense account against the amount due by them on the liquidator's deposit account. 1 [1937] I.R. 189. 2 [1950] N.I. 3 [1972] A.C. 785. 4 [1937] I.R. 189. 5 [1939] I.R. 352. 6 (1884) 9 App. Cas. 434. 7 (1886) 18 L.R.Ir. 323. 8 [1972] A.C. 785.......
  • Dempsey v Bank of Ireland
    • Ireland
    • High Court
    • 28 May 1984
    ...of law and not a right conferred by the parties. In that context he drew attention to the decision in the Bank of Ireland and Martin 1937 I.R. 189 where the former Supreme Court affirming Meredith J. held that the Bank was not entitled to apply monies which their clients had deposited with ......
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