CHAPTER VI.

CROSSED CHEQUES.

THE law of crossed cheques is now regulated by two short Acts of Parliament, which we shall give at length. By the 19 & 20 Vict. c. 25, it is enacted:

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"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 abbrevi ated, 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 same shall be payable only to or through some banker.

"In the construction of this Act, the word 'banker' shall include any person or persons, or corporation, or joint-stock or other company, acting as a banker or bankers."

By the 21 & 22 Vict. c. 79, it is further enacted: "Whenever a cheque or draft on any banker, payable to bearer, or to order, on demand, shall

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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 or draft, and, except as hereinafter mentioned, shall not be obliterated or added to or altered by any person whomsoever after the issuing thereof; and the banker, upon whom such cheque or draft shall be drawn, shall not pay such cheque or draft to any other than the banker with whose name such cheque or draft shall be so crossed, or if the same be crossed as aforesaid without a banker's name, to any other than a banker.

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"Whenever any such cheque or draft shall have been issued uncrossed, or shall be crossed with the words and Company,' or any abbreviation thereof, and without the name of any banker, any lawful holder of such cheque or draft, 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 whenever any such cheque or draft 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 as in this section mentioned shall be deemed a material part of the cheque or draft, and shall not be obliterated or added to or altered by any person

whomsoever after the making thereof; and the banker upon whom such cheque or draft shall be drawn shall not pay such cheque or draft to any other than the banker with whose name such cheque or draft shall be so crossed as last aforesaid.

"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 or draft 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 seas for life, or to such other punishment as is enacted and provided for those guilty of forgery of bills of exchange in the statute in that case made and provided.

"Provided always, that any banker paying a cheque or draft 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 as aforesaid, and of his having paid the same to a person other than a banker, or other than the banker with whose name such

cheque or draft shall have been so crossed, unless such banker shall have acted malâ fide, or been guilty of negligence in so paying such cheque.

"In the construction of this Act, the word 'banker' shall include any person or persons, or corporation, or joint-stock company, acting as a banker or bankers."

The foregoing statutes settle several points in the law of crossed cheques which were previously the subject of dispute and uncertainty: Bellamy v. Marjoribanks (7 Exch. R. 389); Simmons v. Taylor (4 C. B. 463). The question of presentment of crossed cheques is discussed at page 64. An attempt was made in Carlon v. Ireland (26 L. T. 195), before these Acts passed, to attach the necessity of some peculiar caution on the part of a person who cashed a crossed cheque, so as to make that person liable, if such a cheque had been obtained improperly, but the attempt failed; and, in giving judgment, Lord Campbell said "The question is whether the cheque was taken bonâ fide, and for consideration, not whether it was taken with due care and after inquiry into the holder's title. Such was the old law of England. For a time there was a change, and an innovation upon that old rule, but that innovation has since been corrected by various decisions in all the courts; and the settled law now is, that the question to be considered in such cases is, whether the instrument was taken bonâ fide and for valuable

consideration. My ruling in this case appears most unnecessarily to have caused a great sensation in the mercantile community. It was supposed that I had altered, or attempted to alter, the law as to crossed cheques; but what I laid down was no alteration of the law. I went by the decisions of my predecessors, assuming the cheque to be still negotiable, but treating the crossing as a circumstance which must be considered by the jury in trying the question of bonâ fides." This case is law now. The statutes in question recognize two modes of crossing cheques. One being generally a blank to be filled in with the name of any banker, or without being filled in at all, to be presented by some banker; and the other special, or payable only through a named banker. Where the crossing is special, a banker will pay at his peril to any other banker than the named one, and therefore if several bankers' names be written across a cheque, the banker upon whom it is drawn ought not to pay it without an explanation or a guarantee. Both kinds of crossing still leave the cheque negotiable, if payable to bearer or to order, but where a special banker is named it would havo to be cashed through him, and therefore would require, in ordinary practice, to be paid in for collection by some customer of that banker.