the holder of it, if desirous of avoiding the risk of losing the cheque, which has thus become payable to bearer, may convert the blank endorsement into a special endorsement by writing above the endorser's signature a direction to pay the cheque to, or to the order of, himself or some other person.
4. The name of the person drawing the cheque must appear upon it. A cheque is invariably signed by the drawer, but it will be sufficient if his name be written on any part of it, thus a cheque drawn " I, A.B., desire you to pay, etc.," would be valid.
Date of cheque.—A cheque is not invalid by reason of it not being dated, and may be ante-dated or post-dated, or dated on a Sunday. Alteration of the date will invalidate a cheque unless made with the assent of the drawer; and if made with such assent, the cheque will require to be re-stamped as being a new document.
Cheque Payable to Order, Forged Endorsement of.—Where a cheque is payable to order and the banker on whom it is drawn pays it in good faith and in the ordinary course of business he cannot be called upon to make good the loss should the endorsement of the name of the person to whose order it was payable prove to have been forged. If, however, any other person gives cash for a cheque so endorsed he will not be able to enforce payment of it, and should he in fact have obtained payment of it, he will be liable to refund the money to the true owner.
Cheques Payable to Bearer, Negotiation of.—Inasmuch as the title to, as well as the property in, a cheque payable to bearer is capable of being transferred by mere delivery, its payment can be enforced by any person who becomes the holder of it in due course, i.e., a person who takes it before it is overdue, in good faith and for value, and without any notice at the time of any defect in the title of the person from whom it was received. If, therefore, a cheque payable to bearer be lost or stolen, and the person who finds it, or stole it, as the case may be, succeeds in getting some one to give him cash for it, the latter, if he acted under the circumstances mentioned (and any other holder deriving his title to the cheque through him) will be able to enforce payment of it.
Crossed Cheques.—A cheque may be crossed either by writing on the face of it the words "and company" (or any abbrevation thereof), between two parallel lines, or by drawing such parallel lines simply. In such case the cheque is said to be crossed generally, but if the name of a banker be added it is crossed specially. If a cheque be issued uncrossed the holder may cross it; or if it be crossed generally he may cross it specially.
If a banker pays a cheque which is crossed generally otherwise than to a banker, or a cheque crossed specially otherwise than to the banker to whom it is crossed, he will be liable to the true owner of it for any loss he may have sustained in consequence.
Cheques Marked "Not Negotiable."—The one way in which the drawer or holder of a cheque can protect himself is by writing on the face of it the words "not negotiable"; but whether a cheque other than a crossed cheque can be so dealt with is doubtful. The effect of marking a cheque "not negotiable" is that no person who takes it can have, or be capable of giving, a better title to it than that possessed by the person from whom he took it. Though some doubt has been expressed on the point, there does not appear to be any absolute necessity to use the actual words " not negotiable," and any other words clearly indicating such intention,—as, for instance, "Pay A. B. only "—will, it seems, be sufficient. But a mere mention of the account which is to be credited for instance, if the cheque be crossed "Account of X., National Bank"—would not be sufficient.
Presentment of Cheque for Payment. A cheque should be presented for
- Including a cheque which, although "drawn to order, has, by being endorsed in blank, become payable to bearer; see previous page.
- As to the necessity to present a cheque within a reasonable time, see below.