Question 373. - A, an old customer of the bank (who keeps a fairly good account), presents B's unaccepted cheque to the teller for encashment The teller cashed B's cheque, handing over the cash to A. Later when the cheque reaches the ledger-keeper there are not sufficient funds to pay. In what position is the bank? Has the bank any recourse against A's account, or is it simply between the bank and B?

Answer. - With the encashment of the cheque the transaction is ended so far as "A" is concerned. He could not be compelled to refund the amount paid him, since the bank is supposed to know the state of its customer's account and could not claim it to be money paid by mistake. Its only recourse is against "B."