Question 461. - At the request of the People's Co-operative Company, Limited, an account is opened in the name of "John Smith, in trust for the People's Co-operative Co., Ltd.," the account to be operated by John Smith. Should formal assent be obtained from the company to operate the account in this manner, and in any case is the bank under any obligation to see that moneys are properly expended? Supposing Smith opened the account should the bank, knowing the company's existence, obtain its assent?

Answer. - The company under the hand of its duly authorized officers should request the bank in writing to open the account and give instructions as to its conduct. So long as such instructions are complied with, the bank is under no responsibility to see that the moneys are properly expended.

Smith should not be allowed to open an account in that name without the intervention of the company. In particular it would be dangerous to let him, without express written authority, endorse and deposit to such account cheques in favour of the company, and dispose of the proceeds by his own cheque.