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Receipt on Cheque

act, document, signed, banker, hereof, bankers, pay and section

RECEIPT ON CHEQUE. Many com panies use cheques with a form of receipt upon the face or upon the back, such receipt being, in most cases, the only one which the drawer of the cheque requires from the person to whom the cheque is payable.

A document of this description is some times worded :—" Pay or order the sum of when the receipt on the back hereof has been duly stamped, signed and dated." The printed form on the back may be : " Received from the amount named on the face hereof.

Below the receipt the following words are sometimes printed :—" The receipt as above is also the indorsement of the cheque and is the only acknowledgment required." The receipt, instead of being on the back, is, as mentioned, sometimes on the face below the drawer's signature, and in addition to the receipt being signed the document may require to be indorsed.

Such a document does not agree with the definition of a cheque in the Bills of Ex change Act, 1882. To comply with that Act a cheque must be an unconditional order in writing. In the form above given, the order to pay is conditional upon the receipt being duly completed.

As an instrument of this nature is not a cheque, the protection afforded by the Bills of Exchange Act to a banker paying a cheque drawn upon him, will, apparently, not extend to it. But it is considered that protection is afforded to the banker collecting such a document when crossed by Section 17 of the Revenue Act, 1883, which provides as follows : " Sections 76 to 82, both inclusive, 01 the Bills of Exchange Act, 1882, and Section 25 of the Forgery Act, 1861, shall extend to any document issued by a customer of any banker, and intended to enable any person or body corporate to obtain payment from such banker of the sum mentioned in such document, and shall so extend in like manner as if the said document were a cheque : Provided that nothing in this Act shall be deemed to render any such document a negotiable instrument. For the purpose of this Section, Her Majesty's Paymaster General and the Queen's and Lord Trea surer's Remembrancer in Scotland shall be deemed to be bankers, and the public officers drawing on them shall be deemed customers." Sir John R. Paget points out in his " Law of Banking " that the Revenue Act treats these documents as not negoti able instruments, " not negotiable " having apparently the meaning of not transferable, and adds that it would seem " that the banker's safer course is in all cases to regard documents of this sort as available only in the hands of the payee."

The use of documents of this nature is becoming very common, and as the banker's position with regard to them appears to be so uncertain and unsatisfactory, it is neces sary, for the banker's protection, that he should obtain, from the customer using this special form, an indemnity to the following effect : " In consideration of your allowing me, or persons duly authorised by me, to draw drafts on you with receipts attached in the form annexed, I undertake that you shall have as against me in respect thereof the pro tection afforded by Section 61) of the Bills of Exchange Act, 1882, and that the signature of the receipt at the foot of such drafts shall have the effect of and operate as an indorse ment within the meaning of the same Section." In addition to the form of document given above, some cheques have a note at the foot that " the receipt on the back hereof must be stamped, signed and dated." In other cases no reference at all to a receipt appears on the face of the cheque, but on the back may be found a receipt such as " Received from the amount named on the face hereof In the cases where there is no condition attached to the order to pay, the cheque is not excluded from the definition given in the Act. A mere note at the foot, or on the back, of a cheque with respect to a receipt, and the presence of a form of receipt on the cheque, so long as the order to pay is uncon ditional, does not affect the nature of the instrument. When the receipt is signed, the signature is regarded by the banker as the indorsemen t.

Certain cheques provide for the receipt being signed per procuration. The following is an example : " Pay John Brown the sum named below if presented within six months from the date hereof duly stamped, signed and dated " Received the sum of as per particulars furnished.

" Note.—This receipt should be signed by the payee, but a per procuration discharge will be accepted if guaranteed by the payee's bankers. In the case of a corporate body, the receipt must be signed on their behalf by an authorised officer whose position must be stated." A receipt on a cheque, whether upon the face or upon the back, requires a penny stamp, if the amount is 1:2 and over, unless the signer of the receipt is exempted by law.

A receipt by a banker upon a bill or cheque is exempt, provided it is given " in the ordinary course of his business as a banker." (See RECEIPT.)