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Lost Bill of Exchange

cheque, drawer, banker, holder and payment

LOST BILL OF EXCHANGE. The Bills of Exchange Act, l 882, Section 69, provides: " Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found again.

" If the drawer on request as aforesaid refuses to give such duplicate bill, he may be compelled to do so." By Section 70 : " In any action or proceeding upon a bill, the Court or a judge may order that the loss of the instrument shall not be set up, provided an indemnity be given to the satisfaction of the Court or judge against the claims of any other person upon the instrument in question." By Section 51, s.s. 8, " where a bill is lost or destroyed, or is wrongly detained from the person entitled to hold it, protest may be made on a copy or written particulars thereof." Where a cheque has been lost, the loser of it should at once request the drawer to give notice to the banker on whom it is drawn to stop payment, and the banker should notify any branches, where it might be presented, of the loss. A record of the loss should be made in the customer's account in the ledger.

If a banker pays a bill or cheque when he has received instructions from the drawer not to do so, he is liable to lose the money, for he cannot debit the amount to his customer's account. The utmost cart, therefore, is necessary in dealing with " stop orders," as such notices from customers are called, and copies of all stop orders should be supplied to each cashier, day book clerk, and ledger keeper, through whose hands the cheque may pass, so that all may keep a sharp look out in case the lost cheque should be presented.

Before giving a duplicate cheque, it is advisable for the drawer to obtain a satis factory indemnity, otherwise he may have to pay the original cheque (unless it was a crossed cheque marked " not negotiable ") to a bond fide holder for value, as well as the duplicate. As to a banker collecting a lost cheque, see COLLECTING BANKER.

If a banker's draft is lost, a satisfactory indemnity should be obtained before paying the amount to the loser, as the banker is liable to pay the draft if presented by an innocent holder for value.

Where a cheque has been lost and a neces sary indorsement has been forged, an inno cent holder for value has no recourse against the drawer. The true owner can demand payment from the drawer. If the holder has obtained payment from the drawer, he is liable to the true owner.

If the cheque was payable to bearer and crossed " not negotiable," the position is the same, the holder cannot recover.

If the cheque was payable to bearer, either uncrossed or crossed without the words " not negotiable," an innocent holder for value can enforce payment of it from the drawer. The loser of the cheque must suffer the loss.

Where the cheque was duly indorsed before being lost and was not " not nego tiable," a subsequent holder for value with out knowledge that it had been lost could sue the drawer and indorsers.

Where a banker pays a cheque with a forged indorsement, see COLLECTING BANKER, PAYING BANKER. (See PAYMENT STOPPED.)