CHAPTER XII. INTRODUC- Form.. ON CHEQUES. A BANKER'S cheque is an instrument, in many respects resembling a bill of exchange, but in some entirely different. A cheque does not require acceptance; in the ordinary course it is never accepted; it is not intended for circulation; it is given for immediate payment; it is not entitled to days of grace; and though it is, strictly speaking, an order upon a debtor, by a creditor, to pay to a third person the whole or part of a debt, yet in the ordinary understanding of persons it is not so considered. It is more like an appropriation of what is treated as ready money in the hands of the banker, and in giving the order to appropriate to a creditor, the person giving the cheque must be considered as the person primarily liable to pay, who orders his debt to be paid in a particular place, and as being much in the same position as the maker of a promissory note, or the acceptor of a bill of exchange, payable at a particular place, and not elsewhere, who has no right to insist on immediate presentment at that place. Whilst moreover a bill of exchange must be presented for payment in due time, in order that the holder may preserve his rights against the drawer; a cheque need not be presented for payment at any specific time, if presented within six years, and no loss has been occasioned (a). A cheque is a bill of exchange addressed to a banker, and payable to a certain person or bearer on demand. The common form of cheques is as follows, but no precise form of words is essential, the only requisites being that it be directed to a banker, that it be dated, that it contain the sum, and that it be signed by the party drawing : (a) Per Baron Parke in Ramchurn Mullick v. Luchmeechund Radakissen, 9 Moo. P. C. 69; Keene v. Beard, 29 L. J. C. P. 287. £100. London, January, 1863. Messrs. London and Westminster Bank. On demand Pay A. B., or Bearer, the sum of One Hundred Pounds. C. D. A cheque must be stamped. All drafts or orders for the pay- Stamp duty. ment of money to the bearer or order on demand must be stamped. The exemption for drafts drawn upon a banker transacting the business of a banker within fifteen miles of the place where such drafts or orders are issued, has been abolished (a). As in the case of other drafts or receipts, an adhesive stamp is used for the purpose, and the person by whom such cheque is given, or such draft or order signed or made, must, before the instrument is delivered out of his hands, cancel or obliterate the stamp so used by writing thereon his name or the initial letters of his name, so as to show clearly that such stamp has been made use of, and so that the same may not be again used. If any person who makes or signs such draft with any adhesive. stamp, does not bona fide effectually cancel or obliterate such stamp, he forfeits the sum of ten pounds. If any person fraudulently gets off or removes, or causes to be removed, from any paper whereon any draft is written, any adhesive stamp, or if any person affix or use any such stamp so gotten off or removed from any draft or order, or if any person is concerned in any fraudulent act or contrivance, with intent to defraud Her Majesty of the duty so granted, every person so offending shall forfeit the sum of twenty pounds (b). A cheque not properly stamped is not admitted in evidence (c). A cheque drawn for less than twenty shillings is abso- Sum. lutely void (d). The restrictions placed to the issue of cheques for twenty shillings and less than five pounds, has been removed (e). The amount must be expressed in the known current coins of the country, and not in foreign money (ƒ), nor can the banker offer any money other than the lawful money of the realm. A cheque being made payable to bearer is transfer- Transfer. able without indorsement by mere delivery, but it may be (a) 21 & 22 Viet. c. 20, s. 1; 17 & 18 Vict. c. 83. (b) 16 & 17 Vict. c. 59, s. 45. (d) 48 Geo. 3, c. 88, s. 2. (f) Kearney v. King, 2 B. & Ald. Crossing. Obliteration or alteration of crossing. indorsed so that an indorsee may be sued thereon by the holder (a). For convenience of trade, cheques are often crossed with the name of a banker or with a blank formula, "&Co.," the purpose of which is to make the cheque payable only to or through the hands of a banker. This custom had long obtained, but a case having occurred (b) where the validity of such a restriction was questioned, a statute was passed, which premising that it would conduce to the ease of commerce, the security of property, and the prevention of crime, if drawers or holders of drafts on bankers payable to bearer or to order on demand, were enabled effectually to direct the payment of the same to be made only to or through some bankers, it was enacted: That in every case where a draft on any banker made payable to bearer or to order on demand, bears across its face an addition, in written or stamped letters, of the name of any banker, or of the words "and company" in full or abbreviated, either of such additions shall have the force of a direction to the bankers upon whom such draft is made, that the same is to be paid only to or through some banker, and the sum shall be payable only to or through some banker (c). A farther difficulty afterwards arose, a cheque having been crossed or altered by a subsequent holder (d), as to the liability of the banker in paying a cheque so altered (e): and another statute was passed to the following effect (ƒ): First, that whenever a cheque upon any banker payable to bearer or to order on demand shall be issued crossed with the name of a banker or with two transverse lines with the words "and company," or any abbreviation thereof, such crossing shall be deemed a material part of the cheque, and shall not be obliterated, or added to, or altered by any person after the issuing thereof; and the banker upon whom such cheque shall be drawn shall not pay such cheque to any other than the banker with whose name such cheque shall be so crossed, or, if the same be crossed without a banker's name, to any other than a banker. (a) Keene v. Beard, 29 L. J. C. P. 287. (b) Bellamy v. Marjoribanks, 7 Exch. 389. (c) 18 & 19 Vict. c. 25. (d) Stewart v. Lee, M. & M. 158. (e) Simmons v. Taylor, 2 C. B. N. S. 528. (f) 21 & 22 Vict. c. 79. Secondly, that whenever any such cheque shall have been issued uncrossed, or shall be issued with the words "and company," or any abbreviation thereof, and without the name of any banker, any lawful holder of such cheque, while the same remains so uncrossed, or crossed with the words "and company," or any abbreviation thereof, without the name of any banker, may cross the same with the name of a banker; and wherever any such cheque shall be uncrossed, any such lawful holder may cross the same with the words and company," or any abbreviation thereof, with or without the name of a banker, and any such crossing shall be deemed a material part of the cheque, and shall not be obliterated, or added to, or altered by any person after the making thereof; and the banker upon whom such cheque shall be drawn, shall not pay such cheque to any other than the banker with whose name such cheque shall be so crossed. Thirdly, if any person shall obliterate, add to, or alter any such crossing with intent to defraud, or offer, utter, dispose of, or put off with intent to defraud, any cheque on a banker whereon such fraudulent obliteration, addition, or alteration has been made, knowing it to have been so made, such person shall be guilty of felony, and, being convicted thereof, shall be liable, at the discretion of the Court, to be transported beyond the sea for life, or to such other punishment as is enacted and provided for those guilty of forgery of bills of exchange; and Lastly, that any banker paying a cheque which does not at the time when it is presented for payment plainly appear to be or to have been crossed as aforesaid, or to have been obliterated, added to, or altered as aforesaid, shall not be in any way responsible, or incur any liability, nor shall such payment be questioned by reason of such cheque having been so crossed as aforesaid, or having been so obliterated, added to, or altered, and of his having paid the same to a person other than a banker, or other than the banker with whose name such cheque shall have been so crossed, unless such banker shall have acted malâ fide, or been guilty of negligence in so paying such cheque. A cheque may be transferred at any time, and, being payable Time when it on demand, it is never overdue, and, therefore, a party taking a ferred. may be transcheque after any fixed time from its date does not do so at his peril. On this as on other points cheques differ from bills of Acceptance. exchange (a). Yet a cheque being intended to be presented for payment without delay, the holder must present it not later than within banking hours of the day after he received it. Where the holder pays the cheque into his banker's, he must do so on the same day he has received it, in order to allow the banker till the next day to present it for payment. Nor would it make any difference were the cheque to pass through the clearing house. The practice is, that each banker sends to the clearing house the cheques upon other bankers which he receives in the course of the day; they are delivered to a clerk of the firm on which they are drawn, each house having a clerk in attendance there for the purpose, and he enters them in a book to the credit of the banker paying them in. When the clock of the clearing house strikes four, no more cheques are taken, and at the end of the day the clerks settle their balances. If a cheque comes too late for the clearing house, it is usually sent to the bankers on whom it is drawn, and they mark it with their initials, which is considered as an undertaking to pay it the next day, it not being usual for bankers to pay each other after four (b). Where a banker receives a cheque upon another banker he is bound to pay it at the clearing house the same day, if there be time, but he also has till the next day to present the cheque. If the place of presentment be at a distance, the holder should send the cheque by post not later than the day after he received it, and then his agent has the following day to present it for payment (c). And this rule applies not only as between the parties to the cheque, but as between banker and customer, unless circumstances exist from which a contract or duty on the part of the banker to present earlier, or to defer presentment to a later period, can be inferred (d). Cheques drawn by the Treasury on the Bank of England must not be presented after three o'clock. Whatever be the effect of a delay on the presentment as against the immediate transferror, the drawer's liability is not discharged, unless actual damage has arisen from the delay (e). A cheque is never accepted, though the marking of a cheque (a) Rothschild v. Corney, 9 B. & C. (b) Robson v. Bennett, 2 Taunt. 388. (d) Hare v. Henty, 30 L. J. C. P. 302. (e) Robinson v. Hawksford, 9 Q. B. 52; Laws 2. Rand, 27 L. J. C. P. 76. |