SCA rules in favour of bank over dud cheques

A commercial bank accepts in good faith cheques deposited into a client's account

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A commercial bank accepts in good faith cheques deposited into a client's account – without the bank necessarily giving the client any guarantee that the cheque(s) concerned will be paid out, five judges of appeal have concurred. A report on the Fin24.com site says liquor merchant Isaac Leeuw sold a client liquor on two occasions – the first time for more than R48 000 and the second time for R89 000. Each time Leeuw accepted a cheque in good faith from the purchaser and paid it into his FNB account. The first cheque was paid by the bank, but FNB rejected the second cheque because it had established that both cheques had been stolen and fraudulently signed. According to the report, the judges of appeal unanimously found that in the circumstances FNB had given Leeuw no guarantee that the cheques would be paid out. FNB had merely done what any commercial bank does – accept in good faith cheques deposited into a client's account. The court also ruled that Leeuw must return the R48 000 already paid out to him.
Full report on the FIN24.com site
Judgment