FACTS ABOUT CHEQUES

Taranaki Daily News, Volume LI, Issue 202, 15 August 1908, Page 3

FACTS ABOUT CHEQUES

The following information about the drawing, endorsing, and accepting in payment of accounts, of cheques, which has been carefully compiled by a banker, should prove interesting and instructive to all business people. A little attention to the diU'erent points emphasised would prevent endless trouble to bank ollieials, and disappointment and delay to the public. Business people should cut the article out and pin or paste it up in a convenient place in their offices for future reference. DATE. A cheque may be dated ally day of the week, Sundays included. It may be post-dated, but cannot be paid by the banker before the date shewn on the cheque. ' If the date is six months old or more, it is customary for bankers to refusfc payment. This is called a "stale'' cheque. It is intended that cheques should tie presented for payment with the least possible delay; considerable risk and many legal complications arise through holding them indefinitely.

PAYEE. This is the person to whom the cheipic is payable. When the payee's name is followed by the words "or hearer" the cheque is said io be an open one, and is payable either to the person whose name is mentioned Or to anyone presenting it—but if the words " or bearer" are deleted and "or order" inserted the payee must first sign his name on the hack before dealing with it. When making a cheque payable " to order" the utmost care must he exercised in spelling the payee's name correctly, this is most important. Never write John Thompson, when it ■should he .John Tompson, or .lames Brown when it should be .lames Browne.

Never write pay -Mrs. Oeorgc Jones, put .Mrs. Jane Jones. Never put James liobiiison. Manager of the Mutual Building Society; omit the name, and put. -Manager of the Mutual Building Society.

Never put pay " Potatoes " or order Never put pay " "or order, for obvious reasons.

Never put pay Mr. " So-aml-So " upon completion of contract. Never put pay " Mrs. Jane Everitt" upon delivery of goods—for the reason that a cheque must be an unconditional order in writing. ENDORSEMENT.

It would save endless confusion, misunderstanding and delav if all courtesy titles such as Mr., Mrs., Major, Dr., Kcv., etc., were omitted when inserting the na'me of the payee, simply writing pay John Smith or order. Never endorse a cheque Mr. John Smith, simply John ■Smith.

Never endorse it Mrs. Jane Smith, simply Jane Smith. If a cheque has been made out pay Mrs. John Smith, endorse it Jane Smith wife of John Smith.

If the payee's naiiM) is misspelt, lie | mav endorse the cheque the same way,] placing beneath it his proper signature—generally speaking whatever appears on the face'should be repeated on the back, with the exception of the Mr. -Mrs., Esq.. etc., as the ease may he, and then signing correctly underneath. Sl'M PAYABLE. Should there be a discrepancy between the amount stated in the body and 111" figures, the sum denoted by the words is the sum payable. (BUSSED CUEOI ES. A cheque is said In be crossed, when il bears across its face two para le! transverse lines with the words '•bank,' or "and company" between. Such a cheque cannot be cashed by the bank upon which it is drawn, but must <c lodged to a person's credit, 'the torc■'oini' is a "eneral crossing. If the name of a particular bank is inserted bcUwcell the lines the cheque must go I through that bank, and this constitutes a special crossing. NOT NI.i;oTiAULE.

These words may also be added between the lines, but in such cases people should be vi'rv careful from whom they taketbem.no mailer how good a mark the drawer may be, as the ollcct is to affect the negotiability of a Yheouo. iin ,l tbere is risk in taking them. V simple, illustration will explain the position:-Suppose a well-known man I,!' means draws a cheque tor LIU ero-cs it " not negotiable," and loses it •„, the street, lie stops payment at Ins bank, and need worry no more about i( . |„ the meantime a stranger finds the che(|ue and tenders it at a store in payment of certain purchases the drawer being well known the cheque is take,, without question, and as it was taken innocently and tor value the storekeeper thinks bis title good. 1 pen presentation to the bank the cheque is returned with the answer •■payment stopped." Tl«- storekeeper can only ue the siraii"cr. if he can I,ml linn, not the drawer, because of the words "lint nc-otiaUe." but in every other case an •„„;„,.„t holder for value can recover from the drawer, unless notice ot loss has been advertised in the public I'ress. I,i short tilt- words ■•not negotiable constitute a danger signal, and the utmost care should be exercised when taking deques so crossed.