Lloyd's Maritime and Commercial Law Quarterly
BANKS’ DUTIES TO OWNER OF STOLEN A/C PAYEE ONLY CHEQUE
Middle Temple v. Lloyds Bank Plc
In The Honourable Society of the Middle Temple v. Lloyds Bank Plc,1 the High Court dealt with the liability of two collecting banks regarding a stolen cheque. The cheque, dated 4 January 1995, was for a sum of £183,189.89. It was drawn by Middle Temple, on its bank Child and Co., and made payable to Sun Alliance Insurance Ltd. Apparently, this cheque was stolen in the post. On 11 January 1995, the cheque was presented to the Istanbul branch of Sekerbank (the 4 Levant branch) by Kamil Sesen. He was not a customer of that bank. This cheque had been endorsed with the words “Sun Alliance Insurance Ltd” on its reverse. It had an indecipherable signature below it, which was a forgery.
The cheque was forwarded to Lloyds’ International Operations Centre on 18 January 1995. The employee of Lloyds Bank who dealt with the cheque checked that the cheque was signed and dated and that the words and figures matched. However, no attention was paid to the reverse of the cheque. Being over £50,000, it was automatically microfilmed. On 20 January 1995 the account of Middle Temple was debited by Child and Co. by this amount.
Lloyds Bank Plc was asked by Sekerbank to credit this cheque promptly on 20 January on the basis that their customer “is indeed in a difficult position”. The next employee of Lloyds Bank who dealt with the cheque was unable to find any details of the cheque. The microfilm had not yet been processed and the employee did not therefore become in any
369