CROSSED CHEQUES

Hokitika Guardian, 21 May 1924, Page 2

CROSSED CHEQUES

PRECAUTIONS OF BANKS

In a court case in Australia recently it was held that a hank isuing its own cheques in exchange lor crossed cheques of a customer had cashed tile crossed cheques and in doing so hail neglected the order not to casil the cheques conveyed in the tact that 11 it-v were erused. In the past hanks in New Zealand have been in the habit, of giving their own cheques in exchange for crossed ihoqucs. In lad this has been a piece of business of every-day occurrence. Now. however, in consequence of tin* Au-tralmn case in which tile bank was held to be liable for several thousands •>! pounds, the banks here, in issuing their own cheques in exchange for crossed cheques, require the application for their own cheques In he signed hv the per-en i*r oei'soiis who i-siied the era-sed cheques. Another matter in connection with crossed cheques in which the bald;arc exercising more care relates to where a person who i- running practical! v a one man company seeks to pay crossed cheques of the company into his. own private account. Recenth a ease occurred in England in which

a man who was running a one-man company paid cheques amounting to £SSOO and belonging to the company into his own private account. After the man’s death a hank that wa> holding debentures issued by the coinpanv brought an action against the bank that had permitted the coni' pane's cheques to be paid into the priaccount, for the recovery of the proceeds of the cheques. The judge lic*ld that the bank was not under the circumstances protected, and gave bis judgment in favour ot tbc plaintiff bank. From this judgment defendant bank appealed but the decision of tho lower Court was up-held.