THE STOPPED CHEQUE

Dominion, Volume 7, Issue 2149, 15 May 1914, Page 9

THE STOPPED CHEQUE

» : FOR SMALL AMOUNT WHEN ARE SUCH CHEQUES STALE? ' (Bj Telerraoh.—Press A«sociation.) Auckland, May 14. A judgment of considerable interest to tho commercial community was given by Mr. Frazer, S.M., this morning in a caso John Kelly v. G. Carey, relating to tho liability of persons concerned in the negotiation of a stopped cheque. ; From tho proceedings, it appeared that a cheque for £8 was drawn by Carey'on the National Bank on October 7, 1912, and, after writing it out,. Carey put it in his pocket, and went to keep an appointment with a man to whom he owed £3, and for whom the cheque was intended. On tho way to keep the appointment Carey either lost the cheque, or it was stolen from him. Next morning ho went to the bank and stopped tho cheque. Nothing; more was heard or seen of tho cheqiio until some time in tho neighbourhood of November 18. About that time a man, who Was not known and could not be identilied, requested that the cheque should bo cashed by tho licensee of tho Imperial Hotel. John Kelly, the licensee, pot seeing anything suspicious about tho cheque or transaction, handed over £3. Three days later he presented it at the bank for payment through his bank' account, and payment was refused. Carey refused to refund tho amount to Kelly, on tho ground that the cheque had been lost by him, and had not been parted with knowingly by him. Kelly now sued for £3. After quoting the law on the subject, and pointing out the incompleteness of tho authorities as to tho liability of the person who draws a cheque, and then stops payment, the Magistrate said that the cheque was drawn for a vory small amount (£3). That was readily cashable at any bank, hotel, or placo of business. It was drawn on October.7 in Auckland by an Auckland man upon an "Auckland branch of tho bank. Tho cheque was not presented to Kelly until six weeks after this date. An open cheque of tho kind was not like an ordinary bill of exchange that passed from hand to hand for an indefinite period. Tho cheque was intended, as a matter of ordinary business, to be presented very promptly after its date, and it seemed to him that a lapse of six weeks in such circumstances as had been shown in tho case, rendered the cheque stale. Kelly, in taking an open cheque for that amount on an Auckland bank, six weeks after it .was duo, had accepted a cheque which was overdue at the time of its negotiation. Plaintiff would be non-suited.