Crossing Cheques

Horowhenua Chronicle, 22 September 1916, Page 3

Crossing Cheques

A new emphasis, says the New South W-iiles Weekly Notes was put in a casj tried before an English Court and a special .jury on the importance of crossing a cheque which is to be sent through the post. Tile defendants contended. that they were imfplieity authorised by the cour.se of business between themselves and the plaintiffs to discharge their indebtedness by che<|ii;sent through the post, and that the plaintiffs must therefore bear the loss where the cheque was stolen in transit and cashedi by the thref. But the defendants had been ill the habit of -ending crossed cheques, while the one in question was open, and tho plaintiff* met the defendants' contention bv tho argument that, even assuming an implied authority for payment by cheque through the post, this did not extend to the sending of all open cheque which a thief could more readily cash. The judge appears to have refrained from ruling on the point as a matter of law. Audi to have left it with the jury, with a comment, however, which .showed hi.s opinion to be that a letter requesting the sending of a 0110(1110 by post -no more authorized the sending of nn opeu cheque-, than it authorized the j sending of a cheque in an open enve- : lope—a view which apparently eomI mendedi itself to the eonimoiisense and business experience of (ho jury. But there are, of course, various modes of crossing, and in addition to those provided by the Bills of Exchange Act (English and; Federal). the (■rosing "atvount of payee only," which sippears to be coming more into use, is noteworthy. According to an Knglish judge, this crossing has, grown up in order to protect the drawer of a cheque against the consequences of it- hciiiu lost or stolen ; it is a direction to tho receiving banker that the drawer desires to pay the particular cheque into the j bank which keep the account: of the payee, and the disregard of such a direction, if the banker has information which iii'ght lead him to think that the aec aint into which he i.s paying the amount is not to the payee's account, would be negligence. Thus, although the Court of Appeal held that the crossing of a cheque "Account of , Na- | tional Bank, Dublin." drid not. at all events in the case of cheque expressed to be payable to order or to bearer. elude its transfer, it would seem, that the practice .since that decision of crossing -a cheque "account of payee only" puts the banker 011 inquiry. Tlie practical conclusion from the cases aari the Act appears to be that, if the drawer wishes to have the maximum protection for a cheque which he is sending (hroii'-di the post, he should strike out the words "or bearer,'' make the cheque payable to A. It., and cross it '•Not negotiable—account of payee only."