THE CROSSED CHEQUES BILL, 1877.

New Zealand Times, Volume XXXII, Issue 5107, 6 August 1877, Page 3

THE CROSSED CHEQUES BILL, 1877.

This Bill,- introduced by the hon. Mr. Whitaker, has for its object the amendment of the law relating to crossed cheques. By it the Banker’s Draft , Act is repealed; but existing rights, interests, and liabilities under that enactment are not to be affected. A “ cheque ” is.defiued as a draft or order on a banker payable to bearer or to order on demand. .The term “ banker ” includes persons or a corporation, or joint stock or other company acting as bankers. As to the general and special crossing the Bill provides that where a cheque bears across its face an addition of the words “ and company,” or any abbreviation thereof between two parellel lines ; or, of two parallel lines simply, with or without the words “ not negotiable,” that addition is to be deemed a crossing, and the cheque is to be deemed to be crossed generally. Where across the face of a cheque the name of a banker is written, the cheque is to be deemed specially crossed to that banker. It is provided that where a cheque is uncrossed, a lawful holder may cross it generally or specially. Where a cheque is crossed generally, a lawful holder may cross it specially. Where a cheque is crossed generally or specially, a lawful holder may add the words “ not negotiable.” Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker, his agent or collector. Crossing is to be deemed a material part of the cheque, and it is unlawful to obliterate it or alter it except as provided by the Act. Where a cheque is crossed generally, the banker on whom it is drawn is not to pay it otherwise than to a banker ; and where a cheque is crossed specially, the banker on whom it is drawn is not to pay it otherwise than to the banker to whom it is crossed, or to his agent for collection. Where a cheque is crossed specially to more than one banker, except when crossed to an agent for the purpose of collection, the banker on whom it is drawn is to refuse payment of it. In cases where the banker on whom a crossed cheque is drawn has in good faith and without negligence paid such cheque if crossed generally to a banker, and if crossed specially to the banker to whom it is crossed, or his agent being a banker, for collection, the banker paying the cheque and (in case such cheque has come to the hands of the payee) the drawer thereof, shall respectively be entitled to the same rights and be placed in the same position in all respects as they would have been in if the amount of the cheque had been paid to the true owner, A banker paying a cheque contrary to the provisions of the Bill is to be liable to the lawful owner. The Bill further provides that any banker paying a cheque crossed otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom the same shall be crossed, or his agent for collection being a banker, shall be liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. Where a cheque is presented for payment which does not at the time of presentation appear to be crossed, or to have had a crossing’which has been obliterated, or to have been added to or altered otherwise than as authorised by this Bill a banker paying the cheque, in good faith and without negligence, shall not be responsible or incur any liability, nor shall the payment be questioned, by reason of the cheque having been crossed, or of the crossing having been obliterated, or having been added to or altered otherwise than as authorised by this Bill, and of payment being made otherwise than to a banker or the banker to whom the cheque is or was crossed, or to his agent for collection being a banker (as the case may be). A person takings cheque crossed generally or specially, bearing in either case the words “ not negotiable,” shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had. But a banker who has in good faith and wiihout negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque prove defective, incur any liability to the true owner of the cheque by reason only of having received such payment.