BANKER AND CUSTOMER. The ordi nary relationship between a banker and a customer is that of debtor and creditor. When a customer pays in money to the credit of his account, the banker becomes the debtor and the customer the creditor, but when the banker makes a loan to a customer the position is reversed, as the customer is then the debtor and the banker the creditor. The money which a banker receives from a customer is at the free dis posal of the banker ; he may preserve it in his till, invest it in some security, or lend it out to another customer ; but the customer retains the right to demand back a similar amount, or to draw cheques upon the banker up to that sum, the cheques being payable either to the customer himself or to some other person. The customer may also accept bills and arrange with the banker that they be charged to his account at maturity, or he may, in certain cases, make arrangements for the banker to accept bills on his behalf. In order to constitute a person a customer, Lord Davey said, in Great Trestern Railway v. London and County Bankin; Co. (1901, A.C. 414) : " I think there must be some sort of account, either a deposit or a current account or some similar relation." When money has lain dormant with a banker for six years, the Statute of Limita tions no doubt applies, as in an ordinary case of debtor and creditor, but a banker never takes advantage of the statute, and is always ready to repay the money upon the demand of the customer or of his legal representatives. (See STATUTE OF LIMITA TIONS, UNCLAIMED BALANCES.) If a customer leaves with his banker a parcel of securities for safe custody, the banker's position is that of a bailee, and his liability depends. to a certain extent, upon whether he undertakes the duty gratuitously or for reward. The difference between a hanker as a debtor to his customer and as a bailee may be illustrated as follows :-1 t John Brown pays in 120 to the credit of his account, the banker becomes Brown's debtor and is liable to repay to Brown on demand, but until the demand is made the banker can do what he likes with the money, and the 120 which is ultimately repaid to Brown is not, of course, the same coins as were originally handed by Brown to the banker ; but if Brown gives to the banker a sealed bag containing, say, coins to the value of 120 and leaves it for safe custody, the hanker becomes a bailee and must take care of the bag, as entrusted to him, and return it, with the contents un touched, to the customer when required.
(See SAFE CUSTODY.) The position between banker and customer may also be that of mortgagee and mort gagor, as where a customer grants a mort gage, for a fixed amount, to the banker. In such a case the banker can charge simple interest only upon the loan account. (See INTEREST.) A banker and his staff are bound to secrecy regarding the business and accounts of the customers, but a hanker may, in certain cases, be compelled to give evidence in a court of law, and he may also be re quired to give a copy of entries in the books of the bank. (See BANKERS' BOOKS EVIDENCE ACT, 1S79.) As to a banker's position when he is requested by another banker to supply an opinion as to the status or sufficiency of a customer, See BANKER'S OPINION.
A bank which is empowered by its memo randum of association may act in the capa city of sole executor under a will, or as trustee under a will or settlement, or as custodian trustee. (See CUSTODIAN TRUSTEE.) Further information respecting the various matters and positions by which a banker is brought into more or less direct contact with his customers will be found under the respec tive headings, and in particular the follow ing articles may be referred to :—ACCOUNTS, ADVANCES, BANKRUPT PERSON, COLLECTING BANKER, COMPANIES. DEATH OF CUSTOMER, DEPOSIT RECEIPT. PARTNERSHIPS, PAYING BANKER, PROMISSORY COTE, SECURITY, STOCKBROKING TRANSACTIONS.