MARKED CHEQUE. In connection with local exchanges in country branches, cheques are frequently presented by one banker to another in the same town to be " marked " as being good. If the cheque is all right, the banker on whom it is drawn initials it and hands it back to the banker who has pre sented it to be " marked." The banker holding the cheque can then rest satisfied that it will be paid when presented through the clearing later on in the day, or, if too late for that day's clearing, through the clearing on the following day. The arrange ment is one between the two bankers and has nothing to do either with the drawer, payee or holder. If further cheques should be presented for payment, before the " marked " cheque arrives through the local clearing, and the balance of the customer's account, taking the amount of the " marked " cheque into consideration, will not permit of their pay ment, the banker is justified in refusing pay ment of those subsequent cheques. When the banker " marked " the cheque he prac tically paid it and is entitled to regard it as paid, although, for the personal convenience of the two bankers, the cheque itself is per mitted to be passed through the clearing with the other cheques. The " marked " cheque will, of course, be debited to the drawer's account when it comes in, even though the drawer in the interval has died or become bankrupt. The cheque being to all intents and purposes paid when " marked," the drawer cannot stop payment of it after it is " marked." Bankers are occasionally requested by the drawer of a cheque to mark or certify it as good for the amount, as for example when the customer desires to settle for the pur chase of property or to pay customs duties. A cheque so marked is usually received by the person to whom it is tendered as being as " good as cash." When a cheque is so marked at the request of the drawer, the banker will, in considering whether subse quent cheques should be paid which are presented for payment before the marked cheque is presented, treat the balance of the customer's account as though the marked cheque had been charged to the account.
Whenever a cheque is marked at the drawer's request, a note of the amount should be made in the account, so that the banker, when other cheques are presented, may not overlook his liability to pay the marked cheque. When the cheque is received it must, of course, be paid, and can be charged to the drawer's account, even if he has died or become bankrupt in the meantime. The drawer cannot stop payment of a cheque marked at his request.
Where a cheque is " marked " at the request of the payee or a holder, the position would appear to be different.
In an ordinary way there is no contract between a banker and the payee or holder of a cheque, but if a banker certifies or marks a cheque for payment at the request of the payee or holder, the payee or holder of such marked cheque could no doubt compel the banker to pay it And as the drawer's right to stop payment would appear not to be affected by the marking, the banker might Sind himself " between two stools," i.e. compelled, at least morally, to pay the cheque to the holder, and prevented legally from debiting it to the drawer's account If the drawer dies or becomes bankrupt before a cheque, marked at the payee's or holder's request, is presented, the banker cannot debit it to the' account of the deceased or the bankrupt.
Chalmers' " Bills of Exchange " says : " At common law there is no objection to the acceptance of a cheque, if the holder likes to take it in lieu of payment, but the Bank Charter Acts Nvonld in most cases render this illegal." The marking of cheques (except as between bankers) is not a desirable practice to encourage. It is preferable that, instead of marking for a holder, the cheque should be paid at once, or the cheque be debited and a banker's draft given for it, or the amount be credited to a sundry creditors account and a banker's cheque issued.
In the United States cheques are freely certified by bankers, and such certification is held by law to be equivalent to acceptance. (See CERTIFICATION OF CHEQUES, CHEQUE.)