This is an extract of our United Australia V. Barclays Bank document, which we sell as part of our Restitution of Unjust Enrichment BCL Notes collection written by the top tier of Oxford students.
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UNITED AUSTRALIA V. BARCLAYS BANK FACTS The appellant company was the plaintiff in an action brought against the respondent bank in the following circumstances. A company called Lower Ancobra (Gold Coast) Areas, Ld., owed the appellants a sum of 1900l., and in payment drew a cheque for that amount making it payable to the appellant company or order. The appellant company had a secretary named Emons, who had authority to indorse cheques for the purpose of paying them into the appellant company's bank account, but had no authority to indorse cheques specially on behalf of the appellant company for the purpose of enabling payment to be made to a third party. Emons, purporting to act on the appellant company's behalf, specially indorsed the cheque so as to make it payable to the M. F. G. Trust, Ld. (hereinafter called "M. F. G."), of which Emons was a director. Thereupon M. F. G. indorsed the cheque and paid it into its account at the respondent bank. The respondent bank knew that Emons, besides being secretary of the appellant company, was a director of M. F. G., but without making any enquiries the bank collected the proceeds of the cheque and placed them to the credit of M. F. G.'s account. By writ issued on November 8, 1937, the appellant company sued the respondent bank for (1.) damages for conversion; (2.) alternatively, damages for negligence; (3.) in the further alternative, for 1900l. as money had and received by the defendants to the use of the plaintiffs. The respondent bank in its defence claimed to be protected from liability by s. 82 of the Bills of Exchange Act, 1882, but it did not attempt at the trial to establish that defence and it became common ground that the circumstances in which the respondent bank had dealt with the cheque were such as would make it liable to the appellant company for the 1900l., unless it was relieved from liability in consequence of earlier proceedings taken by the appellant company in an endeavour to recover the 1900l. from M. F. G. Proceedings against MFG: On May 13, 1935, the appellant company issued a writ against M. F. G. claiming the 1900l. as "money lent," or alternatively as "money had and received" by M. F. G. to the use of the appellant company... On October 28, 1935, on the petition of another creditor, a winding-up order was made against M. F. G. The action by the appellant company against M. F. G. was thereupon automatically stayed before trial and no judgment was ever obtained... There was thus never any recovery, either by judgment or otherwise, of any part of the sum claimed from M. F. G. ISSUE
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