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Drawer

bill, person, cheques, pay, exchange, banker, cheque and drawee

DRAWER. The drawer is the person who signs a bill of exchange giving an order to another person, the drawee, to pay the amount mentioned therein.

In the usual course, a drawer makes out the bill himself, signs it and sends it to the drawee for acceptance. But a person may sign a bill as drawer which has already been made out and accepted, and even indorsed. When a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a prim facie authority to fill it up as a ' complete bill using the signature, if so authorised, as that of the drawer. (See INCHOATE INSTRUMENT.) Section 55 of the Bills of Exchange Act, 1882, provides : " (1) The drawer of a bill by drawing it " (a) Engages that on due pre , sentment it shall be accepted and paid according to its tenor, and that if it be dishonoured he will com pensate the holder or any indorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken ; " (b) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse." A drawer may, if he wish, limit his liability on the bill by such words as " Pay ' John Brown or order without recourse," or, " sans recours." Permission to do so is given in Section 16, as follows : " The drawer of a bill, and any indorser, may insert therein an express stipulation " (1) Negativing or limiting his own liability to the holder ; " (2) Waiving as regards himself some or all of the holder's duties." Where different parties to a bill are the same person, Section 5 provides : " (I) A bill may be drawn payable to, or to the order of, the drawer ; or it may be drawn payable to, or to the order of, the drawee.

" (2) Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note." (See PARTIES TO BILL OF EXCHANGE.) Where a drawer is dead, notice of dis honour must be given to a personal repre sentative ; where he is bankrupt notice may be given either to the party himself or to the trustee. DISHONOUR OF BILL OF EXCHANGE.) In applying the provisions of Part IV of the Bills of Exchange Act, 1882, the first indorser of a promissory note is (by Section 89) deemed to correspond with the drawer of an accepted bill payable to the drawer's order.

The drawer of a cheque is the person on whose account it is drawn and who must provide the funds to meet it.

A banker must know the signature of a customer. If the drawer's signature is forged, the banker cannot charge it to his customer's account. Even if the forgery is so perfectly done as to defy detection under the closest scrutiny, it does not affect the banker's liability. His customer cannot be debited with a cheque which he has not drawn.

If John Thomas Charles Brown wishes to sign cheques merely as plain John Brown, an authority should be obtained to honour cheques so signed.

Where a drawer is unable to write, he may sign by making a X in the presence of a witness who is known to the bank officials. The mark should be made at the bank, otherwise the hanker cannot be certain that it has been made by the customer. The his form is usually this :—TnomAs X SMITIL mark Witness :—JAMES ROBINSON, Hope Street, Manchester.

If the customer does not produce an outside person two officials of the bank may witness his mark. Banks do not, as a rule, consider one official sufficient.

When mandates or authorities are held regarding the signing of cheques, the in structions must be carefully observed. A difficulty sometimes arises where a banker is authorised by a limited company to pay cheques when signed by iwo directors and the secretary, and the secretary is also a director, his name appearing on cheques in both capacities. In such a case the banker should ascertain if the articles of association permit a director to act also as secretary. Even if they do so permit, it is better tc have a clear understanding with the company on the point.

Notice of a customer's death cancels the banker's authority to pay his cheques, and any cheques presented after receipt of such notice are returned " Drawer dead," except in the case of a cheque which the banker has agreed to pay, by marking or certifying it. at the drawer's request, for payment, or which the banker has, for his own con venience, " marked " in connection with the local clearing.

Where a person is too ill to sign his name, his mark should be witnessed by two persons, one of whom should he the doctor in attend ance. It is usual for the doctor to certify that his patient clearly understood the nature of the transaction.

The drawer of a bill payable on demand is discharged if it is not presented for payment within a reasonable time.

The drawer of a cheque is, in an ordinary case, liable thereon for six years from the date of the cheque. (See AUTHORITIES,