The protection given by this Section ap plies to crossed cheques only when they are collected on behalf of a customer. Section 82, as it stands, does not protect a collecting banker who allows his customer to draw against crossed cheques paid in to credit of his account, before the proceeds for them have been received from the banker on whom the cheques are drawn. Much litiga tion has taken place around this Section, but it has now been amended by the Bills of Exchange (Crossed Cheques) Act, 1906, passed August 4, 1906, being " an Act to amend Section 82 of the Bills of Exchange Act, 1882." The amendment is : " Section 1. A banker receives payment of a crossed cheque for a customer within the meaning of Section 82 of the Bills of Ex change Act, 1882, notwithstanding that he credits his customer's account with the amount of the cheque before receiving pay ment thereof." It has been held that to make a person a customer of a banker there must be some sort of account, either a deposit or a current account or some similar relation.
A dividend warrant may be crossed. Section 95 says : " The provisions of this Act as to, crossed cheques shall apply to a warrant for pay ment of dividend." The Act does not apply to bills, which cannot, therefore, be crossed like cheques. If a bill should be crossed, the crossing is of no effect.
Money orders and postal orders may be crossed.
The crossed cheque sections of the Bills of Exchange Act, 1882, extend to any docu ment issued by a customer of any banker, and intended to enable any person or body corporate to obtain payment from such banker of the sum mentioned in such document (Revenue Act, 1883, Section 17) .
The following are specimens of crossings But any of these, or similar, words across a cheque, without the transverse lines or with only one transverse line, do not consti tute a crossing.
It is to be noted that where such words as " Under Fifty pounds " are written across a cheque, if a line is drawn above and below those words the lines constitute a general crossing, although it may not have been the intention to cross it.
If a cheque is crossed " Coy., Leeds," the word Leeds may be ignored, as it is not part of the crossing.
On page 163 are specimens of crossings which are included in the definition of a special crossing.
There are many varieties of general and special crossings. As a rule, the transverse lines go right across the cheque, but fre quently they are drawn only a half or a third way across, and in extreme cases the lines are so short as to be easily overlooked, A cheque is occasionally met with which has a x placed upon it with the object of making it a crossed cheque. Such a mark does not, of course, constitute it a crossed cheque.
The position of the lines is usually about the middle of a cheque, but they are some times drawn across a corner of it.
The place of any words added to the transverse lines is usually between or imme diately above or immediately below the lines, but in some cases they are found at a considerable distance from the crossing, and occasionally are found written even below the amount. It is questionable, however, whether words which are not written between or near to the transverse lines could be heH to be a part of the crossing.
Crossings may be written, stamped. printed, or perforated. Many mistakes as to the amount would be prevented if customers avoided drawing the crossing lines through the figures of a cheque.
By the above sections it is seen that a crossed cheque can be paid by the banker on whom it is drawn, if crossed generally, only to another banker- -if crossed specially, only to the banker whose name appears in the crossing. If the holder of a crossed cheque is a customer of the banker on whom it is drawn, the hanker may place such cheque, if it is so desired, to the credit of that customer's account. though he should not pay cash for it. The customer, how ever, may forthwith draw a cheque upon his account for the cash required.
Where a cheque crossed generally and drawn upon one branch is presented for pay ment at another branch of the same bank, the two branches are, for this purpose, con sidered to be two banks, and the banker pay ing such a cheque fulfils the requirements of the Act to pay it only to another banker. In Gordon v. London City and Midland Bank 1902, 1 K.B. 242), the Master of the Rolls, referring to cheques of that description, said : " The defendants, whose branch bank receives payment from another branch, are certainly a bank. It may be that the pay ment is to themselves ; still, it is a pay ment made to a hank, and the payment is also made by a bank." Where a cheque is crossed, and a payee wishes to obtain cash for it from the banker on whom it is drawn, it is customary for the drawer to cancel the crossing and to write " pay cash " upon the cheque. The altera tion. called " opening the crossing," should he initialled or signed by the drawer. A banker, however, should be on his guard when requested to cash a cheque where the crossing has been cancelled, lest by doing so he renders himself liable to a true owner who took the cheque in a cross.'d condition. (See OpF.NING 1 CfiossiNG.t The transverse lines are an essential part of a general crossing, but they are not neces sary in a special crossing. The name of a banker by itself across the face of a cheque is a special crossing, or the name may he placed between transverse lines, or it may be placed inside a square or other form of margin.