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Payment of Cheque

banker, branch, pay, person, paid, customer and account

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PAYMENT OF CHEQUE. When an open cheque is presented for payment it requires to be carefully scrutinised to sec that every thing is in order. If the account upon which the cheque is drawn wilt admit of its payment, the banker, before paying it, must be satisfied that it bears the signature of his customer, or of the person who may have been authorised by his customer to sign, and that payment of the cheque has not been stopped by the drawer. If it is a cheque payable to order, all the indorsements must be scanned to see that they are apparently correct. It should also be noticed whether the cheque is post-dated or is stale dated, whether the amount in writing agrees with the amount in figures, and whether, if any alteration has been made in the cheque, such alteration is duly initialled by the drawer, or drawers. On being satisfied that all these various points are in order, and that there is no other reason why the cheque should not he paid, the banker may, if the person presenting the cheque appears, so far as he can tell, to be entitled to it, pay the cheque.

If a banker dishonours a cheque which ought to be paid he will be liable in damages.

When paying a crossed cheque to another banker practically the same points require to be observed and in addition the nature of the crossing. (See CROSSED CHEQUE.) When a cheque is presented for payment, a banker is required either to pay it or dishonour it. If everything is in order he is obliged to pay it, or stand the consequences of Nvrongfully refusing to pay.

It is possible for everything connected with a cheque to be absolutely correct and yet the cashier who has to pay it may have a strong suspicion that the person presenting it is not entitled to it. Lord Halsbury in lragliano Bros. v. Bank of England (1891, A.G. 107), said : " I can well imagine that on a person presenting himself, whose appearance and demeanour was calculated to raise a suspicion that he was not likely to be entrusted with a valuable document for which he was to receive payment in cash, I should think it would be extremely prob able that, whether the document were a cheque payable to bearer for a large amount or a bill, the counter clerk and banker alike would hesitate very much before making payment."

When a cheque has a notice upon it that it must be presented for payment within a certain fixed time from the date of the cheque, the banker must see that the time has not expired before paying the cheque.

Where a customer has two accounts with the same bank, one at Branch A and another at Branch B, and both are credit accounts, the banker at Branch A, when a cheque drawn upon his Branch is presented, is not obliged to take into consideration a balance at any other Branch than his own. If, however, the account at Branch B is over drawn and at Branch A is in credit, a banker may, if necessary, regard them as one account. (See BRANCHES ) A banker at Branch A is not obliged, before dishonouring a cheque, to ascertain, by wire or otherwise, if the customer has paid in at Branch B on that day for his credit at A, even though the customer is in the habit of paying in at B.

It is very necessary, before paying a cheque, that the banker should be fully satisfied that it ought to be paid, because, as soon as he hands the money across the • counter, the ownership in that money passes from the banker to the person pre senting the cheque, and, unless the presenter is willing to repay, the banker cannot obtain it back, even if he discovers immediately that the money should not have been handed over. Chief Justice Erie in Cham bers v. Miller (1862, 13 C.B.N.S. 125), said : " The bankers' clerk chose to pay the cheque ; and the moment the person pre senting the cheque put his hand upon the money it became irrevocably his." Where a banker has given his agent orders to pay certain cheques, or cheques up to a fixed amount, on behalf of a cus tomer, the cheques, when paid, are debited to the customer's account on the day they are received by the banker, but the interest on the account is reckoned as though the cheques had been debited on the actual date when they were paid by the banker's agent.

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