Cheques paid to credit of a customei 's account should be carefully examined before being paid or before being remitted for collec tion, and if not in order should be returned to the customer, or, if possible, sent out to him to be remedied, as, for instance, where he has omitted to indorse or has indorsed them wrongly.
It is desirable that when an account is to be closed, the cheque withdrawing any bal ance should state " being the balance of my account " or " to close my account." With regard to alterations in cheques and provisions to prevent fraudulent alterations, see ALTERATIONS.
If there is a difference between the amount in writing and the figures on a cheque, the cheque may be paid according to the amount in writing, but it is the usual custom, and a prudent course, to return the cheque unpaid marked " amounts differ." If the figures have been omitted and the amount only appears in writing, a banker is justified in paving the cheque according to the words ; though if the words have been omitted and the amount is given only in figures, the cheque should not be paid.
A cheque payable 'to " J. Brown only " should be indorsed by him and be paid to him. It cannot be transferred to anyone else. If payable to " J. Brown or order," it should be indorsed, and may, of course, then be transferred.
If the payee himself presents a cheque for payment and declines to indorse it. he has probably a legal right to do so, but see PAYEE.
If the balance of a customer's account will not allow of the full payment of a cheque which is presented, the cheque should be dishonoured. A cheque cannot be paid in part. In England, a cheque presented sub sequently for a smaller amount, which the account will stand, may be paid. In Scot land, however, when a cheque is presented for payment and there is not a sufficient bal ance to meet it, the cheque attaches such funds as there may be in the banker's hands belonging to the drawer, and subsequent cheques, though for a less amount than the balance of the account, will be returned unpaid. The amount attached is transferred by the banker to a separate account.
A cheque which can be presented for payment across the counter of the Bank on which it is drawn, is an " open cheque." A cheque which has certain specified lines or words across the face of it is a " crossed cheque " (q.v.).
A cheque which has been cut, or torn, into two or more portions, or torn sufficiently to suggest cancellation, is not, as a rule, paid by a banker. But if a mutilated cheque bears a note upon it signed by a collecting banker, such as " accidentally torn," it is customary to pay it.
A cheque is sometimes marked or certified by a banker as being good for the amount for which it is drawn. It may be marked by the banker on whom it is drawn for another banker, as a matter of convenience for the purposes of clearing arrangements. Or. occa sionally, it may be marked at the request of the drawer, or even at the request of the payee or holder.
English bankers do not encourage the marking of cheques as between themselves and the public, it being much the preferable way to pay the cheque and, if necessary, give a draft in exchange. In America, the certifi cation or acceptance of cheques is very com mon. (See CERTIFICATION OF CHEQUES.) It is generally held by the best authorities that bankers in England cannot legally accept cheques.
A banker could not refuse to pay a " marked " cheque when presented, and if it was marked at the request of a payee or holder he could not debit it to the drawer's account if, in the meantime, the drawer had died or become bankrupt or had stopped payment of the cheque. (See further infor mation under MARKED CHEQUE.) A person is liable to be charged with false pretence if he gives a cheque in payment of a purchase when he has no account with the banker on whom the cheque is drawn.
With respect to the proposed rules regard , ing the unification of the laws existing in different countries relating to cheques, see UNIFICATION OF LAWS OF BILLS OF Ex CHANGE.
STAMP DUTY.—The duty is one penny, for any amount, and the stamp may be either adhesive or impressed. A cheque must be stamped even if the amount is less than L'2. Two half-penny stamps may be used.
' If an adhesive stamp is used, it must, if the cheque is drawn within the United King dom. be cancelled by the drawer before he I delivers the cheque out of his hands, custody or power (Section 34, s.s. 1, Stamp Act, 1891). If it is drawn out of the United Kingdom and is unstamped, every person into whose hands it comes in the United Kingdom before it is stamped shall, before he presents for payment, or indorses, transfers, or in any manner negotiates or pays the cheque, affix thereto a proper adhesive stamp and cancel the stamp so affixed. If at the time any cheque comes into the hands of any bond fide holder, there is affixed an uncancelled adhesive stamp, it shall be competent for the holder to cancel the stamp. (Section 35, Stamp Act, 1S91.) By Section S. s.s. 3, of the same Act, every person who is required by law to cancel an adhesive stamp, and who neglects to do so, is liable to a penalty of /10. (See CANCELLA