CHEQUE. (Formerly written " check.") Gilbart says : " The word is derived from the French echecs, chess. The chequers placed at the doors of public-houses are intended to represent chess-boards, and originally denoted that the game of chess was played in those houses. Similar tables were employed in reckoning money, and hence came the expression ' to check an account ' ; and the Government office where the public accounts were kept, was called the Exchequer." Another explanation is that the word " check " arose from the consecutive numbers which were placed upon the forms to act as a check or means of verification. In the United States the word " check " is used at the present day. Cheques first came into use about 1780.
Part III of the Bills of Exchange Act, 1882, is devoted to provisions regarding such features of cheques as are not found in connection with a bill.
Section 73 defines a cheque : " A cheque is a bill of exchange drawn on a banker, payable on demand.
" Except as otherwise provided in this Part, the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque." A cheque differs from a bill in several points : it does not require acceptance and is not entitled to days of grace ; it is drawn upon a banker ; the banker is protected if he pays it bearing a forged indorsement : the drawer is the person liable to pay it, and the drawer, as a rule, is not discharged by delay in presenting it for payment. The intention of a cheque is that it be paid at an early date. The drawee's authority to pay is determined by the drawer's death, and the drawer may stop payment of the cheque.
Indelible pencils are not desirable articles with which to draw cheques. A cheque written in ordinary pencil should not be paid without personal reference to the drawer, as the banker cannot possibly tell whether, or not, it has been altered. It is much to be desired that all cheques should be written in ink. Typewritten cheques are too easily altered, and their use should be discouraged as far as possible.
A cheque written upon a sheet of paper, provided it is in proper form, is sufficient. It must be stamped with a penny adhesive stamp (or two half-penny stamps), and the stamp must be cancelled by the person drawing the cheque before he delivers it. Cheques of this description should how ever, never be drawn except in cases of extreme necessity.
At one time a cheque could not be issued for less than twenty shillings, but now a cheque may be for any amount, from one penny upwards. If the amount of a cheque includes a half-penny, the half-penny is ignored by bankers.
The size of cheque forms becomes of con siderable importance when large quantities have to be dealt with. A very large cheque
and a very small one are equally incon venient in a bank office, and it is desirable, from the point of view of those who have to work all day with cheques, that some recog nised size of cheque should be adopted by all bankers.
The customary form of cheque should be adhered to as much as possible, though legally any form 111fieli fulfils the require ments of the Ildls of Exchange Act would be sufficient, as. for example, where the drawer instead of signing his name at the bottom signs it at the top, " 1, John Brown, direct you to pay to John Jones the sum," etc.
The Bank of England declines to pay cheques, unless drawn upon the forms they supply.
Some cheques have a notice upon them that they are payable only if presented within a certain period. Such a condition may possibly exclude the document from being considered a cheque under the Bills of Exchange Act. In Thairiwall v. Great Northern Railway Company (1910, 2 K.B. 509), where a dividend warrant had a con dition at the bottom of it that " it will not be honoured after three months trout date of issue unless specially indorsed for pay ment by the secretary," and it was argued that the document was not a cheque because of this condition, Mr. Justice Bray said : " I have felt a great deal of doubt on this point because of this statement. But, on the whole, I am inclined to think that this document is a cheque, and is within the meaning of Suctions 73 and 3 of the Bills of Exchange Act, 1882, a cheque and an unconditional order in writing. . . . And 1 think it is none the less a cheque because of that statement at the bottom of the document. I do not consider that state ment makes the order conditional." There arc also forms of cheques, or rather documents, which make the payment depen dent upon a certain receipt being signed. Conditional documents of this kind arc not cheques as defined by the Bills of Exchange Act. (See RECEIPT ON CHEQUE.) The form of cheque (or, more correctly, order for payment) in use by Local Autho rities is a peculiar one as, being drawn upon the Treasurer, it does not conform with the requirement of the Bills of Exchange A t that it be drawn upon a banker. It is considered, however, that, although drawn upon an individual, the order is practically drawn upon the bank where the Treasurer's account is kept and that the banker paving such order is entitled to the protection which is afforded by Section 60 of the Bills of Exchange Act, 1582, against forged indorse ments. If such order; should he held not to come within the Bills of Exchange Ac t. then the benefit of Section 60 would not apply, and they would also be incapable of being validly crossed.