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Crossed Cheque 1

banker, specially, whom, section, payment, words and crossing

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CROSSED CHEQUE. .1 crossed cheque is defined by the Bills of Exchange Act, 1882, Section 76, as follows : " (1) Where a cheque bears across its face an addition of " (a) The words ' and company ' or any abbreviation thereof between two parallel trans verse lines, either with or without the words not negotiable ' ; or " (b) Two parallel transverse lines simply, either with or with out the words ' not nego tiable ' •• that addition constitutesacrossing. and the cheque is crossed generally.

" '2 Where a cheque bears across its face an addition of the name of a banker, either with or without the words ' not negotiable,' that addition constitutes a crossing, and the cheque is crossed specially and to that banker." By Section 77 : " (1) A cheque may be crossed generally or specially by the drawer.

" (2) Where a cheque is uncrossed, the holder may cross it generally or specially.

•' :3• Where a cheque is crossed generally. the holder may cross it specially.

:4) Where a cheque is crossed generally or specially, the holder may add the words ' not negotiable.' •' (5) Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection.

" Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself." By Section 78 :— A crossing authorised by this Act is a material part of the cheque ; it shall not be lawful for any person to obliterate or, except as authorised by this Act, to add to or alter the crossing." The duties of a banker with regard to crossed cheques are set forth in Section 79 (I Where a cheque is crossed specially to more than one banker except when crossed to an agent for collec tion being a banker, the banker on whom it is drawn shall refuse payment thereof.

" (2 Where the banker on whom a cheque is drawn which is so crossed never theless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or his agent for collection being a banker, he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid.

" Provided that where a cheque is presented for payment which does not at the time of presentment appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as authorised by this .Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any lia bility, nor shall the payment be questioned by reason of the cheque haying been crossed, or of the crossing haying been obliterated or having been added to or altered otherwise than as authorised by this Act, and of payment having been made otherwise than to a banker or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be." A banker paying a crossed cheque is afforded protection by Section 80 : " Where the banker, on whom a crossed cheque is drawn, in good faith and without negligence pays it, if crossed generally, to a banker, or if crossed specially, to the banker to whom it is crossed. or his agent for collec tion being a banker, the banker paying the cheque, and. if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and he placed in the sante position as 11 payment of the cheque had been made to the true owner thereof." As to the effect of crossing upon the holder. Section 81 provides : " Where a person takes a crossed cheque which bears on it the words ' not negotiable.' he shall not have and shill not be capable of giving a better title to the cheque than that which the person front whom he took it had." A collecting banker is afforded protection by Section S2 : " Where a banker in good faith and with out negligence receives payment for a cus tomer of a cheque crossed generally or specially to himself, and the customer has no title or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment." The Section refers only to cheques which are already crossed when they come into a banker's hands.

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