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Paying Banker

cheque, crossed, bill and bills

PAYING BANKER. The banker upon whom a cheque is drawn, or at whose otfice a bill is accepted, and who pays it, either to the holder or to a collecting banker, is called the paying banker.

It is the duty of a paying banker to pay the cheques of his customer so long as he has sufficient funds belonging to his customer to enable him to do so. Before paying a cheque a banker must, of course, examine it to see that it is properly signed, that the indorse ments are correct and, generally, that the cheque is in order.

In the case of bills domiciled with a banker it is part of his duty either from custom or by instructions of his customer, to pay them, though he is otherwise not legally bound to do so as in the case of a cheque. The paying banker is the drawee of a cheque, and there fore a party to it, but he is not a party to a bill which is Merely domiciled with him.

If a drawer's or an acceptor's signature is forged, a banker cannot debit his cus tomer's account with the cheque or bill.

\Vith regard to indorsements the position of the paying banker is : BILL.—He cannot debit his customer's account with a bill bearing a forged indorse ment. The Bills of Exchange Act does not give him any relief from a forged indorsement on a bill.

CHEQUE.—If a banker pays a cheque in good faith and in the ordinary course of business, he is protected against a forged indorsement by Section 60 of the Bills of Exchange Act, 1S32. (See PAYMENT OF

BILL.) Sir John R. Paget suggests in his " Law of Banking "(page 60), that a cheque which contains a restriction that it is payable only if presented within a specified period may not be included under the term cheque, as defined by the Bills of Exchange Act.

Cheque payable on condition that a form of receipt is signed—The banker is protected by Section 17 of the Revenue Act, 1 SS3, it paid to the pnvee. It is not considered a transferable document. (See RECEIPT ON CHEQUE.) Cheque crossed " account payee.''—The words " account payee " do not concern the paying banker, so long as he pays to a banker in accordance with the crossing. He is protected as in the case of an ordinary crossed cheque.

Cheque crossed " not negotiable,"—The words " not negotiable " do not affect the paying banker. The cheque is treated as an ordinary crossed cheque, and the banker is protected accordingly.

Crossed Cheque.—l'he banker is protected by Section 80 of the Bills of Exchange Act (see CROSSED CHEQUE), when he pays a cheque, crossed generally, to a banker, or crossed specially to the banker to vhoui it is crossed or his agent for collection being a banker.