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bill, payable, cheque, indorse, person, payees and drawer

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PAYEE. The payee in a bill, or cheque, is the person named therein to whom, or to whose order, payment is directed to be made.

If the bill is payable to " John Brown or order," John Brown is the payee, and he should indorse it before the bill can be negotiated. When he has indorsed it—that is, has written his name upon the back—he is called an indorser.

Bills are frequently drawn " Pay to me or my order." In such bills the drawer and the payee are the same person, and the drawer must indorse the bill before negotia tion. By Section 5, s.s. 1. of the Bills of Exchange Act, 1882, " 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." Until a payee indorses a bill he is not liable thereon, but when he indorses it he incurs the liabilities of an indorser. (See INDORSER.) The Bills of Exchange Act, 1882. Section 7, provides as follows : " (I ) Where a bill is not payable to bearer, the payee must be named or other wise indicated therein with reason able certainty.

" (2) A bill may be made payable to two or more payees jointly, or it may be made payable in the alternative to one of two, or one or some of several payees. A bill may also be made payable to the holder of an office for the time being.

" (3) \Vhere the payee is a fictitious or non-existing person the bill may be treated as payable to bearer." When a person accepts a bill, he is pre cluded from denying to a holder in due course the existence of the payee and his then capacity to indorse. The acceptor is not, however, responsible for the genuineness or validity of the payee's indorsement.

Where a bill or cheque is payable to two or more payees who are not partners, all must indorse, unless there is an authority for one of them to sign for the others. If one of them is dead, payment may be made to the survivor on satisfactory proof of death.

Where a cheque payable to John Brown is presented over the counter by a stranger who represents himself to be the executor of Brown, the banker is entitled to ask for exhibition of the probate of Brown's w If a payee's name is misspelt, he should indorse the bill or cheque in precisely the same way, and add his proper signature below.

A cheque which is payable to " John Brown only " is not capable of being trans ferred to anyone else, as the word " only " cancels the negotiability of the instrument.

A bill payable to " John Brown only " should not be discounted as, in the event of the bill being dishonoured, the banker could not sue upon it.

Where there are several payees and the bill is payable in the alternative to one or some, only those who actually indorse the bill are liable thereon.

If the payee is an infant, or corporation having no power to contract, the payee can indorse and effectually transfer the bill to another party, but such a payee will not be liable on the bill.

A banker is under no liability to the payee of a cheque, unless he has marked the cheque for payment, or in some other way given the payee to understand that the cheque will be paid. (See MARKED CHEQUE.) In the case of a cheque drawn without a payee's name having been inserted, as " Pay or order," it is usually treated as being payable to the order of the drawer and, therefore, requiring his indorse ment. It is not a banker's duty to advise a holder to insert his own name in the blank. If not indorsed by the drawer, the best course is to get the incomplete cheque com pleted by the drawer.

Where a payee is dead, his executors, or administrator, may indorse and negotiate the cheque, and the indorsement should show the capacity in which they sign.

As provided in Section 7, s.s. 3, a bill pay able to a fictitious or non-existing payee may be treated as being payable to " bearer." In the Bank of England v. I' agliano Brothers (1S91, A.G. 107) it was held that a fictitious or non-existing person included a real person who never had nor was intended to have any right to the bills. (See FICTITIOUS PAYEE.) In Scotland, when the payee is a married woman, cheques are frequently made pay able to, e.g. Mrs. Mary Burns or Scott, Burns being the maiden name and Scott the married name. The cheque may be indorsed either " Mary Burns " or " Mary Scott." Where a cheque is payable to " Wages or order," " Cash or order," or " House Account or order," it should be treated as a cheque payable to the order of the drawer and be indorsed by him, as such words as " wages," " cash," etc., cannot be regarded as coming under Section 7, s.s. 3, which refers only to a fictitious or non-existing person.

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