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Joint Account

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JOINT ACCOUNT. When an account is opened in two or more names, unless all the parties are to sign cheques, an authority, signed by all, should be obtained stating distinctly who may sign upon the account.

If an account is opened in the names of John Brown and Mary Brown (husband and wife), and it is desired that either of them may draw upon it, the hank's form of authority for either party to sign must be signed both by John and Mary, and if it is the intention that the balance be " repayable to the survivor " those words should be included in the authority. In the case of husband and wife it is particularly necessary that a clear arrangement be made on that point. If the wife dies, the husband can draw the balance, but it would appear that, if the husband dies first, there is the possi bility that the money might be held to pass to the deceased's executors, unless it can be proved that it was the intention of the deceased that the money should, at his death, be withdrawn by his widow.

the case of an ordinary joint account, as John Brown and John Jones, repayable to either, on the death of one the balance may be drawn by the other.

If no authority is held from the parties on a joint account, all cheques must be signed by both parties, and on proof of death of one of them the balance may be withdrawn by the survivor.

An authority may be cancelled by either party at any time.

Any claim that the executors of a deceased joint holder may have upon the money is a matter for arrangement with the survivor, with which the bank is not concerned. Even if the deceased mentions the joint account in his will, the banker is not bound by the will, and, unless he receives notice from the executors not to do so, he may pay the balance to the survivor. If the legal representatives of the deceased give notice to the banker not to pay the balance to the survivor, the banker should not pay it, un less the cheque is signed both by the survivor and the legal representatives. A banker has nothing to do with any question of payment of probate duty when he parts with a balance to the survivor. (See PROBATE.) Where an account stands in several names and one of the persons dies, it is better that the balance should be transferred by cheque to a new account in the names of the sur vivors, than that the deceased's name should be merely dropped out when the next heading is written in the ledger. The chequ transferring the balance to the new accoun should be signed by all the survivors, unless ; mandate is held for one, or more, of th number to sign.

Where one of the parties is authorised t, sign, the method of signing should be, e.g " For John and Thomas Brown and sell Wm. Brown." The name of the accoun should appear upon the cheque as well a the signature of the person drawing it.

If a banker realises securities belonging ti several persons, the proceeds should not b paid to one of those persons, unless uncle an authority to do so signed by all of them.

In the case of a deposit receipt in join names, if it is to be " repayable to eithe party " it should be so stated upon thy receipt, and if in the names of husband an wife it should also say " or survivor " if tha is the intention.

Where there are several joint debtors, ir order to keep the debt alive against every. one of them (that is, to prevent the 'operatior of the Statute of Limitations), there muss be an acknowledgment of the debt from eacl one of them, unless they are members of partnership firm or one of them is authorised to sign for the rest. The fact that one o1 the joint debtors acknowledged a debt would not prevent the others from pleading the statute. As to what constitutes an acknow ledgment of a debt, see STATUTE OF LIMITA TIONS.

A loan by way of a promissory note is on the same footing as a joint account, and each maker must acknowledge the debt, other wise at the expiration of the six years each party who has not acknowledged has the right to consider himself freed from liability. (See PROMISSORY \OTE.) In the event of the failure of one of the parties on a joint account which is over drawn, the solvent party is liable for the amount of the debt ; if the account is in credit the solvent party may, in an ordinary case, withdraw the balance. If there is any doubt, the trustee in bankruptcy should be consulted. (See Section 47, Bankruptcy Act, 1883, under SETTLEMENTS—SETTLOR BANKRUPT.) In the case of a joint account (not a part nership account) which is overdrawn, if one of the parties dies, his estate will not be liable for the debt, and the banker must look to the survivor for payment. If, for example, John Brown (who is a poor man) applies for a loan, and John Jones (who is a rich man) agrees to sign a cheque along with Brown for the amount required, in the event of the death of Jones, his estate cannot legally be held liable for the debt, and if Jones' representa tives repudiate the debt, the banker has only Brown to depend upon for repayment. That is the decision of the Court in Other v. Iveson (1855, 24 L. J. Ch. 654), where money was lent to two brothers on the strength of the cheque being signed by a third brother. The third brother died and his executors were sued by the bank. It was held that the liability was not joint and several but joint only, and therefore that the survivors only were liable. Where a joint account is over drawn and the banker is relying upon one of the parties to the account for repayment, he should protect himself in some way against the risk of that party dying before the money is repaid. Probably the best plan is for the parties to sign a guarantee for the account. (See JOINTLY AND SEVERALLY.)