ABSTRACT
Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, p 468 Viscount Sankey LC: The main questions in the appeal are briefly: (a) Whether the bank, issuing an inconvertible currency, that is, having the right to issue notes, but no obligation to honour them otherwise than by giving in exchange other notes, until some future return to convertibility at a date so remote and unlikely to occur that it could not be taken practically into account, suffered any other than a merely nominal loss (apart from the cost of printing) when they called in bad notes put into circulation by forgers and gave good notes in exchange for them; (b) whether in the circumstances of this case the bank, when they gave in exchange for a forged note of the face value of 500 escudos a good note of that face value, could properly be said to have suffered a loss of 500 escudos, with the result that Waterlows, who are liable by reason of a breach of contract which enabled the forged notes to be put into circulation, are bound to pay to the bank 500 escudos converted into sterling at the rate current at the date of the loss; (c) whether the bank gave evidence of, or proved, any loss at all; (d) whether, if the bank proved any loss, such loss was not caused in whole or in part by the voluntary action of the bank themselves or was not in whole or in part such a loss could not fairly and reasonably be considered as arising naturally from the breach of contract or such a loss as could not be reasonably supposed to have been in contemplation by both parties at the time of making the contract as the probable result of the breach, or whether the loss was not aggravated by the failure of the bank to take reasonable steps to limit the loss. Messrs Waterlow, on appeal, did not dispute the proposition that they were guilty of a breach of absolute duty under an implied term of the contract.
