"Crossing" Cheques

Feilding Star, Volume XIII, Issue 136, 14 May 1892, Page 4

"Crossing" Cheques

To the general public, and eyen commercial circles, the exact measure of protection afforded by what is known as " crossing" a cheque, and the responsibility attaching to persons negotiating such orders, appeers (says the Sydney Morning Herald) not to be understood. A cheque is often " crossed " or drawn "to " order," with a -vague idea that some protection is thu3 afforded to the drawer ; but very few people know that the law gives absolute "protection to the person taking these precautions. A case in point has just come under our notice. A business firm of high standing in this city recently cashed a cheque drawn to " order " and ' crossed." Tin cheque was passed through the bank, and it was afterwards discovered that it had been in wrong hands, and that the endorsement of the payee was a forgery. The drawer claimed that as he had taken all reasonable precautions by both " crossing" the cheque and drawing it to " order " the loss must fall upon the firm cashing tFie cheque, because the bona fides ot tho person • representing himself as the payee were not ascer-' tamed as they might have beon. The case was sent for arbitration to a high legal authority, who has decided in favour of the drawer, and against the firm cashing- the cheque. It appears that there is a decision of the English Courts which clearly fixes the responsibility of ascertaining the hona fides of the payee or the party paying on such a cheque.