The banking practice for lawyers involves
representing banks or companies with respect to lender agreements which include
lines of credit, loans or restructurings.
This practice tends to be a support or ancillary practice in many
markets. There is always only one general contract between the bank and its
clients. On top of these contracts the banker enters into other specific contracts including that a debtor and
creditor, bailor and bailee, principal and agent and trustee and beneficiary as
the situation demands. In relation to bailment, three basic elements must be
proved. The bailee must have rightful or lawful possession of, but
not ownership or title to, the property. Thus, a thief who acquires goods unlawfully does not become a bailee. The property bailed must be personal property. The bailor must give the property with the intent that it is to be returned or delivered according to the bailor’s instructions (Schalntz, W.T et al.,(Eds), Essentials of Business Law(London: Glencoe Press, 1977),pp 377-379). A bank which offers its customers in the ordinary course of business, the service of looking after goods deposited with it, can hardly be described as gratuitous bailee. The banker must realize that were it to refuse a customer such a service it would probably lose the customer who would have no difficulty in finding another bank which would be happy to render the service which would be happy to render the service which is normally offered by banks to their customers according to the case of Port Swettenham Authority V. TW & Co (M) Sdn Bhd (1979) A.C. 580.
not ownership or title to, the property. Thus, a thief who acquires goods unlawfully does not become a bailee. The property bailed must be personal property. The bailor must give the property with the intent that it is to be returned or delivered according to the bailor’s instructions (Schalntz, W.T et al.,(Eds), Essentials of Business Law(London: Glencoe Press, 1977),pp 377-379). A bank which offers its customers in the ordinary course of business, the service of looking after goods deposited with it, can hardly be described as gratuitous bailee. The banker must realize that were it to refuse a customer such a service it would probably lose the customer who would have no difficulty in finding another bank which would be happy to render the service which would be happy to render the service which is normally offered by banks to their customers according to the case of Port Swettenham Authority V. TW & Co (M) Sdn Bhd (1979) A.C. 580.
The issue as to whether or not a
bank could be a bailee was put to rest in the case of Johnson (Liquidator of
Merchants Bank) V. Sobaki 1968(3) ALR Comm 241 where the defendant was
counter-claiming the value of some items which he had left in the bank premises
when he was sued to recover the amount due on an overdraft. The defendant’s
counsel argued that he should be compensated once the goods were proved to have
been in the bank and were lost. The plaintiff’s counsel argued that since the
goods were not found in the bank the plaintiff could not be made responsible
for them: It was held that a bank is liable as bailee for the value of the
goods specifically received by it for safe custody, or otherwise for a purpose
of the bank, and then lost, but if there is no bailment and the owner of the goods
kept on the banks premises is a mere licensee, then in the absence of a special
contractual provision, the bank has no obligation towards him or her in respect
of the goods.