The dishonour of a crossed cheque does not cancel the crossing. The cheque continues to be a crossed cheque, and, if re presented, requires to be re-presented in accordance with the crossing. If a dishonoured crossed cheque hears the crossing of a country hanker and the crossing of his London agents, on re-presentation the cheque may, if necessary, be presented direct by the count ry banker.
Where a crossed cheque is remitted to an agent for collection, it is customary for the banker to cross it thus : " X. & Y. Bank, Ltd., to the British Bank, Ltd., for collection." By Section 79, quoted above, when a cheque is crossed to two bankers, except when crossed to an agent for collection being a banker, the banker on whom it is drawn shall refuse payment. If the present ing banker guarantees the banker on whom it is drawn, such a cheque would usually be paid. But a cheque which is crossed to two branches of the same bank, or to a branch and the head office, is not treated as being crossed to two bankers. A cheque crossed " X. & Y. Bank " should not be placed to a customer's credit at the British Bank, because the banker on whom it is drawn can pay it only to the X. & Y. Bank.
It is customary for a collecting banker to whom a cheque is specially crossed, to place an impress of his stamp upon it, as an indica tion to the paying banker that it has been through the hands of that banker, but a cheque should not be dishonoured merely because the collecting banker has omitted to stamp it.
The words " not negotiable," added to a general or a special crossing, do not operate as a restriction upon the transfer of a cheque, but merely give notice to anyone taking the cheque that he cannot obtain a better title than the person had from whom he received it. The words " not negotiable " do not by themselves constitute a crossing.
Many cheque's have such words as " place to credit of John Brown's account," " ac count of payee," " account John Jones " added to the crossing. The Bills of Ex change Act does not make any particular reference to an addition of that nature, though it does say at Section 7S that it shall not be lawful for any person to obliterate or, except as authorised by this Act, to add to or alter the crossing. If the paying banker carries out his duty, as prescribed by the Act, and pays a cheque crossed generally to a banker, and a cheque crossed specially to the banker named, he is not concerned at all as to whether, or not, the collecting banker carried out the instructions to place the proceeds to any account indicated. There does not appear to have been any definite decision in the Courts as to what is the duty of the collecting banker with respect to such instructions upon a cheque. If a cheque
drawn on the British Banking Co., Ltd., and crossed " X. & Y. Bank, Ltd., for the ac count of John Brown," is paid in to the X.
& Y. Bank, Ltd., by Tom Jones to his own credit, it is difficult to believe that the X. & Y. Bank, Ltd., would be exonerated ! from blame if they ignored the clear indica tion upon the cheque and passed it to the credit of Jones. Accordingly, in practice, a banker who receives such a cheque for collection, requires that it be placed to the credit of the account as named in the cross ing. In National Bank v. Silke (1891, 1 Q.B. 435), where a cheque was crossed " account of Moriarty, National Bank," Lord Justice Lindley said with reference to those words : " It cannot be contended that they prohibit transfer, and I do not think that they indi cate an intention that the cheque should not be transferable. They amount to nothing more than a direction to the plaintiffs to carry the amount of the cheque to Moriarty's account when they have received it." In Akrokeri'i (Atlantic) Mines, Limited v. The Economic Bank (1904, 2 K.B. 465), where certain cheques were crossed " account Economic Bank," Mr. Justice Bigham said : " In my opinion these words are not in any sense an addition to the crossing. A crossing is a direction to the paying bank to pay the money generally to a bank, or to a particular bank, as the case may be, and when this has been done the whole purpose of the crossing has been served. The paying bank has nothing to do with the application of the money after it has once been paid to the proper receiving banker. The words ' ac count A. B.' are a mere direction to the receiving bank as to how the money is to be dealt with after receipt." With reference to the words " how the money is to be dealt with after receipt," as a collecting banker may now pass crossed cheques at once to the credit of his customer, it would appear to follow that the words " Account A. B.," are a direction to the receiving banker as to how he must deal with the cheques when he receives them.
The object of crossing cheques is to insure the safe transmission of the money from the sender to the receiver. A general crossing would prevent a thief from obtaining value from a banker for a cheque, unless he had a banking account. The usual special crossing would prevent him from obtaining value unless he had an account with the banker to whom the cheque was crossed. Thus the thief's chance of profiting by his plunder becomes still further remote.
If a collecting banker gives cash over the counter for a crossed cheque on another banker, he does so at his own risk, because if an indorsement is forged he is liable to the true owner. (See CHEQUE, COLLECTING BANKER.)