Bank of England v Vagliano Brothers: HL 5 Mar 1891

The court considered the interpretation of the 1882 Act, which was said to be a codifying Act.
Held: An Act is to be ascertained in the first instance from the natural meaning of its language and is not to be qualified by considerations deriving from the antecedent law.
Lord Watson said: ‘The decision of the Queen’s Bench in Robarts v. Tucker 16 QB 560 has, ever since its date, been accepted in mercantile practice as determining the obligations incumbent upon bankers who agree to retire acceptances on account of their customers. It casts upon them the whole duty of ascertaining the identity of the person to whom they make payment with the payee whose name is upon the bill. They may pay in good faith to the wrong person, in circumstances by which the acceptor himself or men of ordinary prudence might have been misled; but they cannot take credit for such a payment in any question with the acceptor. It has been said by one of the learned Judges that the rule is a harsh one, and it is possible that in some circumstances it may operate harshly; but it appears to me to be settled beyond dispute, and I see no reason for suggesting any doubt that it puts a reasonable construction upon the contract constituted by the agreement of the banker to pay his customers’ acceptances when they fall due. In the absence of any special stipulations it construes the arrangement so constituted as importing that, on the one hand, the customer is to furnish or repay to the banker the funds necessary to meet his obligations as acceptor; and that, on the other hand, the banker undertakes to apply the money provided by the customer, or advanced on his account, so as to extinguish the liability created by his acceptance. Accordingly, no payment made by the banker which leaves the liability of the acceptor undischarged can be debited to the latter.’
Lord Herschell said: ‘I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.’ and ‘If a statute, intended to embody in a code a particular branch of the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used instead of, as before, by roaming over a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decisions, dependent upon a knowledge of the exact effect even an obsolete proceeding such as a demurrer to evidence.’
Lord Halsbury LCJ said: ‘It seems to me that, construing the statute by adding to it words which are neither found therein nor for which authority could be found in the language of the statute itself, is to sin against one of the most familiar rules of construction, and I am wholly unable to adopt the view that, where a statute is expressly said to codify the law, you are at liberty to go outside the code so created, because before the existence of that code another law prevailed.’

Lord Herschell, Lord Halsbury LCJ, Lord Watson, Lord Bramwell
[1891] AC 107, (1891) 60 LJQB 145, (1891) 7 TLR 333, [1891] UKLawRpAC 6
Bills of Exchange Act 1882 7(3)
England and Wales
CitedRobarts And Others v Tucker 1-Feb-1851
. .

Cited by:
CitedRegina v Fulling CACD 1987
It was alleged that evidence had been obtained by police oppression. She had at first refused to answer questions, but an officer talked to her during a break between interviews, telling her that her lover had been having an affair. The . .
CitedO’Brien v Sim-Chem Ltd HL 2-Jan-1980
The Respondent had carried out a job evaluation exercise in co-operation with the trade unions. The plaintiff and comparators had been rated as equivalent in the course of this exercise but the employer had failed to implement the scheme because of . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Banking, Constitutional

Updated: 04 December 2021; Ref: scu.464675