Home >> Dictionary Of Banking >> Guardians Of The Poor to Or Mandate >> Order Cheque or Bill

Order Cheque or Bill

payable, brown, drawer and word

ORDER (CHEQUE OR BILL). The Bills of Exchange Act, 1882, Section 8, provides as follows : " (4) A bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting trans fer or indicating an intention that it should not be transferable.

" (5) Where a bill, either originally or by indorsement, is expressed to be payable to the order of a specified person, and not to him or his order, it is nevertheless payable to him or his order at his option." The word bill in those sub-sections includes a cheque.

A cheque payable to order should be indorsed by the person to whom it is payable. (Section "JI, s.s. 3.) With regard to the question as to a payee's right to refuse to indorse a cheque when presented by himself for payment, see PAYEE.

The drawer may strike out the word " order " and convert the cheque into one payable to bearer, which alteration must be initialled by him. If there are more drawers than one, each drawer must initial the alteration.

A bearer cheque may be converted into an order cheque by the word " bearer " being crossed out : and this may be done by the payee as well as by the drawer. It is not essential to write the word " order." Where the payee of an order cheque indorses it merely with his signature, it is an indorsement in blank, and the cheque may be transferred as a cheque payable to bearer. Any subsequent holder, however,

may again make the cheque payable to order by indorsing it, e.g. " Pay John Brown or order, T. Jones," or by writing above the last indorser's signature a direction to pay the bill or cheque to or to the order of him self or some other person. (Section 34, s.s. 4.) A cheque payable to " or order ".

is treated as being payable to the order of the drawer, and requires his indorsement. If payable to " W. Brown or " it should be indorsed by NV. Brown. If payable to "NV. Brown," it is, by the above section, payable to NV. Brown or order, but if payable to " W. Brown only," the word " only " prohibits any further transfer.

A cheque payable to " wages or order," " cash or order," is by most bankers regarded as being payable to the drawer's order and requiring his indorsement. It is customary to pay such cheques only to the drawer or his authorised representative.

A cheque payable to " Yourselves or order " should be indorsed by the bank. (See BILL OF EXCHANGE, CHEQUE.)