Presentment for Payment

cheque, banker, time, drawer, person, reasonable and day

Page: 1 2 3 4

" (2) Where the address of the acceptor for honour is in the same place wher; the bill is protested for non payment, the bill must be pre sented to him not later than the day following its maturity ; and where the address of the acceptor for honour is in some place other than the place where it was pro tested for non-payment, the bill must be forwarded not later than the day following its maturity for presentment to him.

" (3) Delay in presentment or non-pre sentment is excused by any circum stances which would excuse delay in presentment for payment or non-presentment for payment.

"(4) When a hill of exchange is dishonoured by the acceptor for honour it must be protested for non-payment by him. ' A cheque must be presented for payment within a reasonable time. Section 74 of the Bills of Exchange Act provides : " Subject to the provisions of this Act " (1) Where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account it is drawn had the right at the time of such presentment as between him and the banker to have the cheque paid and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid.

" (2) In determining what is a reasonable time regard shall be had to the nature of the instrument, the usage of trade and of bankers, and the facts of the particular case.

' (3) The holder of such cheque as to which such drawer or person is discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge, and entitled to recover the amount from him." A person receiving a cheque should present it for payment as soon as possible ; unless presented within a reasonable time the indorsers will be discharged. If a drawer suffers actual loss, as where a banker fails, through a cheque of his not having been presented within a reasonable time, the drawer, as stated in the above Section, is discharged to the amount of such loss. Where a person receiving a cheque and the banker on whom the cheque is drawn live in the same town it is considered a present ment within a reasonable time if the cheque is presented for payment on the business day following its receipt. if the person

receiving the cheque and the banker on whom it is drawn live in different places, it is within a reasonable time if sent forward for payment on the business day following its receipt.

If the banker sends it to an agent for collection, the agent has the day of receipt and the following day in which to present it. In practice, however, all cheques are remitted for collection on the day that they are received.

The drawer of a cheque is liable to the holder for six years from the date of the cheque, and a banker would be justified in paying a cheque within that period, but, in practice, a banker does not pay a cheque, which is six (in some banks twelve) months' old, unless it is confirmed by the drawer. See STALE CHEQUE.) Where it is important to know as soon as possible whether a certain cheque will be paid or not, it is customary to send it direct, instead of through the Clearing House, and a stamped telegram form may he enclosed with a request to the banker on whom it is drawn to " advise fate " of the cheque.

It has been held that, where a foreign cheque is drawn upon a place where the banker has no agent, th custom in London of presenting the cheque by post is a due presentment (Heywood v. Pickering, 1874, L.R. 9 Q.B. 428), but if payment is not re ceived by return of post, the customer from whom the bank received the cheque should be advised of the fact.

If a cheque is presented by post by a stranger, it should be returned with a request that it be presented, according to custom, through a banker.

The presentment of a cheque in England does not operate as an assignment of funds in the drawer's account. l'art payment of a cheque is never made ; it is either paid fully or dishonoured. In Scotland, however, where a cheque is returned unpaid for insufficient funds," any money in the drawer's account is transferred to a separate account, such as a suspense account, where it remains until the banker has evidence that the matter has been arranged. If the payee desires, the cheque may be retained by the banker in exchange for the amount attaching to it.

Page: 1 2 3 4