- 20 Marks
POB-LAW-AND-PRACTICE-APRIL-2024-L3-Q2 – Error in Crediting Account and Implications
Discuss the positions of parties involved when a bank credits funds to the wrong account, leading to assumptions and distributions that exhaust an estate.
Question
Joseph Blue paid in a cash of GHC 50,000 into his account with the bank and this amount was credited in error to the account of Joseph Brew, another customer. It happened that Joseph Brew was owed GHC 50,000 by John Morgan who told Brew that he (John) had received a cheque for GHC 50,000 from Gifty Mbroh. The cheque would be paid into Brew’s account. John did not fulfill his promise; but having sighted a cash deposit transaction on his bank statement Brew issued a receipt to John believing that the credit came from him. Two months after the death of John his executor, who was unable to reconcile the deceased’s account, advertised for creditors, but did not hear from Brew. The executor had concluded that the debt to Brew had been paid having sighted his receipt in John’s records. Consequently all creditors were paid and the deceased’s estate was exhausted. A few months later Joseph Blue who had now noticed the omission of the credit on his statement, observed and queried the bank.
Discuss the position of the parties showing who could suffer a loss.
[20 marks]
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