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the person who takes it for value from the thief can recover upon it. The banker on whom it is drawn may pay it and the banker to whom it is crossed may receive the money for his customer without being liable to refund; but the man who cashed it for the thief and received the money through the bank will have to refund that money to the true owner. The reason is that the man who took it for value and presented it took a nonnegotiable instrument. In fact the cheque is put upon the same footing as an overdue bill. It bears dishonor on its face and the man who takes it in payment or in exchange for money takes it at his peril. If the person who gave it him had a good title the taker is safe; otherwise not. For the same reason, if the not-negotiable cheque is stopped the boná-fide holder for value who has taken it from one who had no title has no action against the drawer.
Thus, to recapitulate; as to uncrossed cheques, a banker who without negligence pays a bill or cheque payable to order, the indorsement of which is forged or made without authority, may take credit for it as against his customer and is liable to no one else (see chap. x., sec. 5). If the indorsement is genuine the banker may pay to the finder or the thief (ibid., sec. 6), while the person who has taken the instrument for value from the finder or thief may even maintain an action on it though neither of the latter could do so. Then, when the crossing is added whether general or special, and whether the words "not negotiable are added or not, the paying and the receiving banker are equally irresponsible, and the only recourse is to the man who has taken the cheque without a title.
13. With this explanation I will quote from the B. of Exch. Act. 1882, the provisions as to crossed cheques, merely observing that the word banker includes a firm or company, and that a dishonest obliteration of a crossing is a forgery.
76. (1.) Where a cheque bears across its face an addition of(a.) The words "and company or any abbreviation thereof between two parallel transverse lines, either with or without the words "not negotiable"; or
(b.) Two parallel transverse lines simply, either with or without
the words "not negotiable"; that addition constitutes a crossing, and the cheque is crossed generally.
2. Where a cheque bears across its face an addition of the name of a banker, either with or without the words "not negotiable," that addition constitutes a crossing, and the cheque is crossed specially and to that banker.
77. (1) A cheque may be crossed generally or specially by the drawer.
(2.) Where a cheque is uncrossed, the holder may cross it generally or specially.
(3.) Where a cheque is crossed generally the holder may cross it specially.
(4.) Where a cheque is crossed generally or specially, the holder may add the words "not negotiable."
(5.) Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to another banker for collection.
(6.) Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself.
78. A crossing authorised by this Act is a material part of the cheque; it shall not be lawful for any person to obliterate or, except as authorised by this Act, to add to or alter the crossing.
79. (1.) Where a cheque is crossed specially to more than one banker except when crossed to an agent for collection being a banker, the banker on whom it is drawn shall refuse payment thereof.
(2.) Where the banker on whom a cheque is drawn which is so crossed nevertheless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or 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.
Provided that where a cheque is presented for payment which does not at the time of presentment appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as authorised by this Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorised by this Act, and of payment having been made otherwise than to a banker or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be.
80. Where the banker on whom a crossed cheque is drawn, in good faith and without negligence pays it, if crossed generally, to a banker, and if crossed specially, to the banker to whom it is
crossed, or his agent for collection being a banker, the banker paying the cheque, and, if the cheque has come into the hands of the payee, the drawer, shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner thereof.
81. Where a person takes a crossed cheque which bears on it the words "not negotiable," he shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had.
82. Where a banker in good faith and without negligence receives payment for a customer of a cheque crossed generally or specially to himself, and the customer has no title or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment.
14. By "the Stamp Act, 1870," all drafts or orders which entitle or purport to entitle any person, whether named therein or not, to payment by any other person of any sum of money therein mentioned, or to draw upon any person for such sum of money, must bear a penny stamp, either adhesive or impressed.
Thus, whether the cheque is drawn upon a banker or not, and whether payable to "Self," or to a number, or to the bearer, or to a person named or bearer, or to a person named or order-in fact, whatever form it may assume, it will require the stamp if the person on whom it is drawn is authorised to pay money upon it.
A few exceptions, however, relating chiefly to orders drawn by bankers themselves, and by public officers, will be found in the Appendix on Stamps.
The person affixing an adhesive stamp must cancel it by writing on or across it his name or initials, or the name or initials of his firm, together with the true date of his so writing; otherwise, if the cheque is produced in evidence, proof must be given that the stamp appearing thereon was affixed at the proper time.
OF A PROMISSORY NOTE.
1. Definition of promissory note.
2. Requires delivery.
3. Joint or joint and several,
When a note is
4. Presentment for payment of note payable on demand.
5. Presentment for payment when necessary and where to be made.
6. Contract of maker.
7. What law as to bills applies to notes.
As pointed out in this work, and as stated in sec. 89 of the Bills of Exchange Act, 1882 (see below), the law of bills applies generally to notes; but I shall be guilty of little repetition by here appending the very readable chapter on notes given in Part IV of the Act:
1. S. 83. (1.) 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.
(2.) An instrument in the form of a note payable to maker's order is not a note within the meaning of this section unless and until it is indorsed by the maker.
(3.) A note is not invalid by reason only that it contains also a pledge of collateral security with authority to sell or dispose thereof.
(4.) A note which is, or on the face of it purports to be, both made and payable within the British Islands is an inland note. Any other note is a foreign note.
2. S. 84. A promissory note is inchoate and incomplete until delivery thereof to the payee or bearer.
3. S. 85. (1.) A promissory note may be made by two or more makers, and they may be liable thereon jointly, or jointly and severally according to its tenor. (2.) Where a note runs "I promise to pay " and is signed by two or more persons it is deemed to be their joint and several
4. S. 86. (1.) Where a note payable on demand has been indorsed, it must be presented for payment within a reasonable time of the indorsement. If it be not so presented the indorser is discharged.
(2.) In determining what is a reasonable time, regard shall be had to the nature of the instrument, the usage of trade, and the facts of the particular case.
(3.) 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, by reason that it appears that a reasonable time for presenting it for payment has elapsed since its issue.
5. S. 87. (1.) Where a promissory 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 not necessary in order to render the maker liable.
(2.) Presentment for payment is necessary in order to render the indorser of a note liable.
(3.) Where a note is in the body of it made payable at a particular place, presentment at that place is necessary in order to render an indorser liable; but when a place of payment is indicated by way of memorandum only, presentment at that place is sufficient to render the indorser liable, but a presentment to the maker elsewhere if sufficient in other respects, shall also suffice.
6. S. 88. The maker of a promissory note by making it— (1.) Engages that he will pay it according to its tenor: (2.) Is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.
7. S. 89. (1.) Subject to the provisions in this part and, except as by this section provided, the provisions of this Act relating to bills of exchange apply, with the necessary modifications, to promissory notes.
(2.) In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the first indorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer's order.
(3.) The following provisions as to bills do not apply to notes; namely, provisions relating to
(a.) Presentment for acceptance :
(b.) Acceptance :
(c.) Acceptance suprà protest (d.) Bills in a set.
(4.) Where a foreign note is dishonored, protest thereof is
OF AN I O U.
1. What it is, and general form.
2. Not Negotiable, being merely evidence of Debt.
3. Caution as to Stamp.
4. Should contain Creditor's Name.
1. A mere acknowledgment of a debt does not amount to a promissory note.