Question 868. - Can a bank legally refuse payment of a cheque drawn on savings bank, giving a reason "Balance of account. Pass book must accompany cheque." Cheque was presented, refused for above reason and duly protested. Should not the bank upon which the cheque was drawn pay protest fees? Have had advice from different sources on this point, but as the customer when opening a savings account does not agree to any rules either verbally or in writing, we are of opinion this rule is purely "internal" and not a legal reason for refusing payment of a cheque.

Answer. - The conditions under which the account is opened, or of which the customer has subsequent notice, would govern. It is not "necessary that the customer agree either verbally or in writing to rules of which he has received notice, but the bank could not change its rules or practice with the customer without reasonable notice. The printed regulation? on savings department pass books usually provide that the book must be presented when withdrawing money, and given up when the account is closed. In prac-tiee, however, certain savings bank customers are allowed to issue cheques on their savings accounts, and where this has been permitted, the bank should not attempt, without notice to the customer, to enforce the rule as to the production of the book when the money is withdrawn. The fact that the cheque in question would have withdrawn the balance, perhaps introduces a further item for consideration, but if the customer could show that he had suffered injury through the dishonour of his cheque, he might succeed in recovering damages from the bank. A court of law would, no doubt, take into consideration all the surrounding circumstances. Looking at it in a practical way, the bank takes very little risk in paying the cheque while protesting it annoys the customer and benefits no one.