DUTY AND AUTHORITY OF BANKER TO PAY A CHEQUE, HOW DETERMINED. 1. By countermand of payment. 2. By notice of the customer's death. CROSSED CHEQUES. GENERAL AND SPECIAL CROSSINGS DEFINED. If the cheque bears across its face the addition of— (b) Two parallel transverse lines simply, with or without. the addition constitutes a crossing, and the cheque is crossed generally. But, if the cheque bears across its face an addition of the name of a banker, with or without the words "not negotiable," the addition constitutes a crossing, and the cheque is crossed specially and to that banker. The provisions of the Act as to crossed cheques apply also to dividend warrants. GENERAL PROVISIONS AS TO CROSSING CHEQUES. 1. The drawer may cross a cheque generally or specially. 2. A cheque being uncrossed, the holder may cross it generally or specially. 3. A cheque being crossed generally, the holder may cross it specially. 3. A cheque being crossed generally or specially, the holder may add the words “not negotiable." 5. A cheque being crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection. 6. If an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself. A crossing authorised by the Act is declared to be a material part of the cheque, and that it shall not be lawful to obliterate or (except as authorised) to add to or alter the crossing; to obliterate or, except as indicated, to alter or add to the crossing, is, therefore, a misdemeanor. And, under the Crimes Act, to obliterate, etc., a crossing, with intent to defraud, is punishable with not exceeding 10 years' penal servitude. DUTIES OF BANKER AS TO CROSSED CHEQUES. 1. Where a cheque is crossed specially to more than one banker (except when crossed to an agent for collection, who is a banker), the banker on whom it is drawn shall refuse to pay it. 2. Where the banker on whom a cheque is drawn which is so crossed, nevertheless— (a) Pays the same; or, (b) Pays a cheque crossed generally otherwise than to a banker; or, (c) If crossed specially pays it otherwise than to the banker to whom it is crossed, or to his agent for collection, being a banker he is liable to the true owner of the cheque for any loss he may sustain owing to the cheque having been so paid. But it is provided that where a cheque is presented for payment which does not at time of presentment appear to be crossed, or to have had a crossing which is obliterated, or to have been added to or altered otherwise than as authorised by the Act, the banker paying the cheque in good faith and without negligence, shall not be responsible nor incur any liability. And the payment is not to be subject to question owing to the cheque having been crossed, or to the crossing having been obliterated or unduly altered, etc., and that payment has been made otherwise than to a banker, or to the banker to whom the cheque is or was crossed, or his agent for collection. PROTECTION AFFORDED DRAWER AND BANKER BY CROSSING CHEQUE. If a banker on whom a crossed cheque is drawn pays it in good faith and without negligence, if crossed generally, to a banker, and, if it is crossed specially, to the banker to whom it is crossed, or his agent for collection (being a banker), he shall be entitled to the same rights and be in the same position as if the cheque had been paid to its true owner. And if the cheque has come into the hands of the payee, the drawer has similar rights, and is placed in the same position. A person who takes a crossed cheque marked "not negotiable" does not possess and cannot give a better title to it than that which the person from whom he took it had; therefore, should the person who tenders such a cheque have no title to it, or a defective title, the party who accepts it must bear any loss, and cannot recover against the drawer, though he gave value for it in good faith. A banker who in good faith and without negligence collects a cheque for a customer, which is crossed generally or specially to himself, will incur no liability to the true owner of the cheque by reason only that he received such payment, if it proves that the customer had no title or a defective title to the instrument. Statutory Provisions Regarding Promissory Notes. DEFINITION, ETC. A promissory-note is an unconditional promise in writing. made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time a sum certain in money to, or to the order of a specified person or to bearer. An instrument in the form of a note payable to maker's order is not a note within the above definition, unless and until it is indorsed by the maker. A note containing a pledge of collateral security, with authority to sell or dispose of same, is not invalid by reason only that it contains such pledge. An "inland" note is one which is, or on the face of it purports to be, made and payable within Australasia; any other note is a "foreign note." The note is incomplete until it is delivered to the payee or bearer; a note which runs, "I promise to pay" etc., and is signed by two or more persons is deemed their joint and several note. NOTES PAYABLE ON DEMAND. A note payable on demand, having been indorsed, must be presented within a reasonable time after indorsement; otherwise the indorser is discharged; the words "reasonable time" are to be construed with regard to the nature of the instrument, trade usage, and the facts of the particular case. But, where a note payable on demand is negotiated, it is not deemed to be overdue for the purpose of affecting the holder with defects of title of which he had no notice, because a reasonable time for presenting it for payment has elapsed since its issue. STATUTORY PROVISIONS REGARDING PROMISSORY NOTES. 67 WHEN A NOTE MUST BE PRESENTED FOR PAYMENT. If the note is in the body of it made payable at a particular place, it must be presented for payment at that place, in order to render the maker liable; in any other case, presentment for payment is unnecessary to render the maker liable. To render the indorser liable, presentment for payment is essential; and if the note is in the body of it made payable at a particular place, presentment at that place is necessary to render an indorser liable; but when a place of payment is indicated by way of memorandum only, presentment there is sufficient to render the indorser liable, but a presentment to the maker elsewhere, if sufficient in other respects, will also suffice. LIABILITY OF MAKER OF A PROMISSORY NOTE. 1. He engages to pay the note according to its tenor. MISCELLANEOUS PROVISIONS REGARDING NOTES. Subject to the above, the provisions of the Act regarding bills of exchange, apply with the necessary modifications to promissory notes; and in applying such provisions the maker of a note is to be deemed to correspond with the acceptor of a bill, and the first indorser of a note with the drawer of an accepted bill payable to drawer's order. The following provisions relating to bills do not apply to notes, viz., those relating to presentment for acceptance, acceptance, acceptance supra protest, and bills in a set; where a foreign note is dishonoured, it is unnecessary to protest it. GENERAL PROVISIONS OF THE ACT. A thing is deemed to be done in good faith, where it is in fact done honestly, whether it is done negligently or not. A bill, note, etc., need not necessarily be signed by the drawer, maker, etc., with his own hand; the signature may be written thereon by some other person under his authority; in case of corporations it will suffice if the instrument be sealed with the corporate seal. Where a bill or note is required to be protested within a specified time, or before some further proceeding is taken, it will suffice if the bill has been noted for protest before the ex piration of such time or the taking of such proceeding; the formal protest may be drawn up at any time afterwards as of the date of noting. FORM OF PROTEST WHERE A NOTARY IS UNAVAILABLE. Know all men that I, A.B. [householder] of in the State of New South Wales, at the request of C.D., there being no notary public available, did on the day of 19—, at demand payment [or acceptance] of the bill of exchange hereunder written, from E.F., to which demand he made answer [state answer, if any], wherefore I now, in the presence of G.H. and J.K., do protest the said bill of exchange. NOTE. The person protesting the bill must be a householder or substantial resident of the place of protest; the bill itself should be annexed, or a copy of it, and all that is written upon it should be underwritten. £500. at £50. ORDINARY FORM OF A BILL OF EXCHANGE. London, 1st January, 1901. [Three] months after date [or on demand, or at sight, or days after sight] pay C.D. or order five hundred pounds. A.B. To E.F., Merchant, Sydney. ORDINARY FORM OF PROMISSORY-NOTE. Sydney, 1st January, 1901. [Three] months after date [or on demand, etc.] I promise to pay C.D. or order [or bearer] fifty pounds. Payable at Bills of Sale. A.B GENERAL REMARKS. A bill of sale is an assignment of goods and personal chattels as security for a debt or loan. It may be absolute or conditional, and if the latter, it is by way of mortgage and possession need not be taken unless there is default in payment of the sum secured, or the grantee is otherwise endangered. |