The Law RELATING TO HEQUES. WATSON. THIRD EDITION. January, 1904. LAW BOOKS FOR STUDENTS PUBLISHED BY SWEET & MAXWELL, Limited, 3 CMANCFRV T ANF T DNDDN A scries of bo( indispensal No. In/ pi his head, and i knowh dgi . 1. Epitome Lincoln's I gs Kelke, of 1899 2. Epitome Price 6*-. ^st^Jaee^T' riNGS Kelke. 1901 3. Epitome e. Price 6.v. 4. Epitome UNIVERSITY 1901 n White and Tudor' s L 5. Epitome Hastings 6. Students Lincoln's I OF CALIFORNIA LOS ANGELES 6*. 1901 By W. H. 1901 W. Clakk, of 1890 7. Compenc Temple, B; Education. SCHOOL OF LAW .., of the Inner ncil of Legal 1902 8. Element Law, one o LIBRARY Barrister-at- 1902 9. Epitome . BOWSTEAD, Barrister-al -Law. Second Editioi . r •ice lGs. 1S98 Arbitration. — Russell on the Power and Duty of an Arbitrator, and the Law of Submissions and Awards. Eighth Edition. By E. J. Pollock, Official Referee, and H. Russell, Barrister-at-Law. Price 30s. STUDENTS' LAW liooKS. Articled Clerks. A New Guide for Articled Clerks. With Appendices of Forms, Questions and Mode] Answers, Appointments open to Solicitors, important Statutes, Legal Maxims, Abbreviations used in Solicitors' Offices, &c. Bj II. W. Stii i. LL.Bjp^olieiter. Prire6*. ' 1895 Bankruptcy. -M issoh's Epitome of Bankruptcy Law fur the use of Students. By Edward Man-on. Barrister-at-Law. [hi Preparation Bills Of Exchange. Bylks Sii J. B.) Un the Law of Bills of Exchange, Promissory Notes, Bank Notes and Cheques. Bj Maurice Barnard Byi.es and W. J. B. Btxes, of the Inner Temple, Barristers-at-Law. Sixteenth Edition. Pria 1899 Cheques. The Law Relating to Cheques. By K. It. Watson, Barrister-at- Law. Third Edition. Price2s.6ef.net. 1904 Choses in Action.— The Law relating to Choses in Action. By W. 1.'. Wabkbn, Barrister-at-Law. Price 16s. 1899 Common Law. — Broom's Commentaries on the Common Law, designed as Introductory to its Study. Ninth Edition. By W. F. A. Archibald and II. A. Colefax, Barristers-at-Law. Price '25s. L896 Companies. -Kelke's Epitome of Company Law. 6*. [In Preparat on Constitutional Law. — Broom's Constitutional Law viewed in relation to Common Law and exemplified bj Cases. Second Edition. By G. L. Dknman. of Lincoln's Inn, Barrister-at-Law. Price 1/. 11*. 6d. 1885 Contracts. — Curi i v's Treatise on the Law of Contracts, and upon the De- fences to ActionB thereon. Thirteenth Edition, containing the Sale of Goods Act. By J. M. Lely, Barrister-at-Law. Price 30*. 189G Carter's Elements of the Law of Contract. By A. T. Carter, one of the Readers to the Inns of Court. Price 7«. 6d. 1902 Rawlins on the Specific Performance of Contracts. By W. Donaldson Rawlins, K.C., joint editor of the second edition of Fry on Specific Performance. Price os. net ' 1899 Conveyancing 1 .— Clakk's Students' Precedents in Conveyancing. Collected and Arranged by James W. Clark, M.A., one of the editors of Goodeve's Heal and Personal Property. Second Edition. Price 5*. 1S96 Elphinstone's Introduction to Conveyancing. By Sir Howard Elphinstone, Bart. Fifth Edition. Price 14*. 1900 Criminal Law. — Archbold's Pleading, Evidence, and Practice in Criminal Cases. Twenty -second Edition. By W. F. Craies and G. Stephenson, Barristers-at-Law. Price £1 11*. 6d. 1900 Deeds. — Kelke's Epitome of Pules for Interpretation of Deeds, founded on Elphinstone's Pules. W. H. H. Kelke, of Lincoln's Inn, Barrister-at-Law. Price 6*. 1901 THE LAW RELATING TO CHEQUES. BY ERIC R. WATSON, LL.B. (London), OF THE INNER TEMPLE; BARRISTER-AT-LAW ; ADVOCATE OF THE CEYLON BAR. FIRST IN FIRST CLASS HONOURS, INTER. LL.B. SECOND CLASS HONOURS, FINAL LL.B. FIRST CLASS CERTIFICATE OF HONOUR, BAR FINAL ; LONDON UNIVERSITY LAW EXHIBITIONER. THIRD EDITION. LONDON : SWEET AND MAXWELL, Limited, 3, Chancery Lane, W.C. EFFINGHAM WILSON, 11, Royal Exchangb, E.C. 1904. \ BRADBURY, AGNEW, & CO. LD., PRINTERS, LONDON AND TONBHIDGE. C\ -lie- tot? PKEFACE TO THE THIKD EDITION. Since the publication of the second edition in July, 1902, the cases of Capital and Counties Bank v. Gordon and London City and Midland Bank v. Gordon have been upheld on appeal to the House of Lords, with a variation not affecting the case so far as the cheques were concerned, but only as to the drafts (1903, A. C. 240). There has also been an important Privy Council case — Imperial Bank of Canada v. Bank of Hamilton (1903, A. C. 49). Further, a bill was introduced and passed a third reading in the House of Lords, which had for its object the amendment of s. 82 so as to destroy the effect of the judgment in Gordon's Cases on the construction of the words " receives payment for a customer." Possibly this measure will be reintroduced in the coming session. The Introduction has been omitted in this edition, and certain matters treated in the Introduction in former editions have been relegated to the text. Young iv PREFACE. v. Grate has once again been referred to as bad law in the Privy Council case above cited, and the author feels obliged to consider it as of more than doubtful authority. Until, however, expressly over- ruled on the narrow ground on which it stands — viz., the duty of the drawer of the cheque to his banker — it will retain its place in the text. ERIC E, WATSON. Colombo, January, 1904. CONTENTS CHAPTER T. PAGE Definition 1 CHAPTER II. Parties : Drawer — Holder — Payee — Indorsee — Indorsement — Banker — Customer — Capacity of Parties — Principal and Agent 5 CHAPTER III. Issue — Negotiation — Non-Transferable Cheques — Restrictive Indorsement — Negotiation without Indorsement — " Order " or " Bearer " — Transfer by Delivery without Indorsement — Lost Cheques 27 CHAPTER IV. Consideration — Antecedent Debt or Liability — A Holder deemed to be for Value — Fraud, Illegality and Duress — Suing on the Consideration .... 40 vi CONTENTS. CHAPTER V. PAGE Crossed Cheques and Cheques marked "Not Negotiable " 40 CHAPTER VI. Blank Cheques and Imperfect Cheques — Fraudulent Filling in and Alteration of Amount — The Words and Figures — Cancellation — Material Alteration — Crimes relating to Forgery, &c, of Cheques 06 CHAPTER VII. Forged Signatures — When the Banker is frotected — Estoppel — When the Draaver is precluded from denying the Genuine- ness of a Signature 80 CHAPTER VIII. Overdue Cheques — Stale Cheques — Post- dated Cheques — Cheques not Dated — Presentment for Payment — Dishonoured Cheques — When Notice of Dishonour is necessary — when a banker must dis- HONOUR a Cheque — Cheques drawn with no Effects — When Property passes in Consideration of such Cheques — When drawing such cheques is criminal . 88 CONTENTS. Vll CHAPTER IX. PAGE Cheques as Evidence — What a Cheque is Evidence of 118 CHAPTER X. Cheques as Tender — Accord and Satisfaction — Cheques as Donatioxes Mortis Causa and Inter Vivos 125 CHAPTER XI. Limitation of Actions on Cheques . . . 130 TABLE OF CASES. PAGE Ackroyd v. Smithies, 54 L. T. 130 ; 50 J. P. 358 . . 126 A'Court v. Cross, 3 Bing. 328 ; 11 Moore, 198 ; 4 L. J. 0. S. C. P. 79 131 Alexander v. Burchfield, 1 Car. & M. 75 ; 3 Scott, N. R. 555 ; 7 M. & G. 1061 100 Ancona v. Marks, 7 H. & N. 696 ; 31 L. J. Ex. 163 ; 8 Jur. N. S. 516 ; 5 L. T. 753 ; 10 W. R. 251 . . . . 6 Arrnfield v. London and Westminster Bank, 1 Cab. & E. 170 13 Arnold v. Cheque Bank, 45 L. J. C. P. 562 ; 1 C. P. D. 578 ; 34 L. T. 729 ; 24 W. R. 759 87 v. City Bank, ib 87 Aubert v. Walsh, 4 Taunt. 293; 12 R. R. 651 . . . 121 Austin v. Bunvard, 6 B. & S. 687 ; 34 L. J. Q. B. 217 : 11 Jur. N. S."874 97 Backhouse v. Charlton, 8 Ch. D. 444 115 Bailey v. Bodenham, 16 C. B. N. S. 288 ; 33 L. J. C. P. 252 ; 10 Jur. N. S. 821 ; 10 L. T. 422 ; 12 W. R. 865 . 100, 101 Bank of England v. Vagliano, 1891, A. C. 107 ; 60 L. J. Q. B. 145 ; 64 L. T. 353 ; 39 W. R. 657 ; 55 J. P. 676 . 8, 27, 81, 82 Baxendale v. Bennett, 3 Q. B. D. 525 . . . . 34, 36 Beaumont, In re, 1902, 1 Ch. 889 128 Beeching v. Gower, Holt, 313 ; 17 R. R. 644 . . 101 Beeston v. Beeston,45 L. J. Ex. 230 ; 1 Ex. D. 13 : 33 L. T. 700 ; 24 W. R. 96 45 Belfast Banking Co. v. Doherty, 4 Ir. L. R. Q. B. D. 124 . 23 Bellamy v. Marjoribanks, 7 Ex. 389 . . . . 15, 47 Bethell, In re, 34 Ch. D. 561 104, 131 Bissell v. Fox, 51 L. T. 663 ; 53 L. T. 193 . . 17, 55, 59, 64 Bobbett v. Pinkett, L. R. 1 Ex. D. 368 ; 34 L. T. 851 ; 24 W. R. 711 49, 50 752; . 101 . 89 . 101 Boddington v. Schlencker, 1 N. & M. 541 ; 4 B. & Ad 2L. J.K.B. 138; 38R. R. 360 Boehm v. Sterling, 7 T. R. 423 ; 2 Esp. 575 Bond v. Warden. 1 Coll. 583 ; 14 L. J. Ch. 154 . X TABLE OF CASES. PAGE Bosanquet v. Corser, 8 M. & W. 142 ; 9 C. & P. 664 ; 10 L. J. Ex. 275 ; 5 Jur. 369 40 Boswoll v. Smith, 6 C. & P. 60 121 Bouts v. Ellis, 17 Boav. 121 ; 4 De G. M. & G. 249 ; 22 L. J. Ch. 716 127 Boyd v. Emmerson, 2 A. & E. 184 ; 4 N. & M. 99 ; 4 L. J. K. B. 43 104 Boyse, Ex parte, 33 Ch. D. 612 131 Bransby v. East London Bank, 14 L. T. 403 ; 14 W. R. 652 11 Bridges v. Garrett, 5 C. P. 451 122 Bristol v. Wilsmore, 1 B. & C. 514 ; 2D.&R. 755 ; 25 R. R. 488 115 Bromage v. Lloyd, 1 Ex. 32 ; 16 L. J. Ex. 257 . . . 129 Bromley v. Brunton, L. R. 6 Eq. 275 ; 37 L. J. Ch. 902; 18 L. T. 628 ; 16 W. R. 1006 128 Brown & Co. v. Nat. Bank of India, 18 T. L. R. 669 . 62 Bull v. O'Sullivan, 40 L. J. Q, B. 141 ; L. R. 6 Q. B. 209 ; 24 L. T. 130 97 Carey v. Geerish, 4 Esp. 9 121 Carew v. Duckworth, L. R. 4 Ex. 313 ; 38 L. J. Ex. 149 ; 20 L. T. 882 ; 17 W. R. 927 113 Carlon v. Ireland, 5 E. & B. 765 ; 25 L. J. Q. B. 113 ; 2 Jur. N. S. 39 ; 4 W. R. 200 47 Chalmers v. Lanion, 1 Camp. 383 ; 10 R. R. 709 . . 94 Chambers v. Miller, 13 C. B. N. S. 125 ; 32 L. J. C. P. 30 ; 9 Jur. N. S. 626 ; 7 L. T. 856 ; 11 W. R. 236 . 110, 117 Charles v. Blackwell, 46 L. J. C. P. 368 ; 2 C. P. D. 151 ; 36 L. T. 195 ; 25 W. R. 472 15, 25, 83 Chatterton v. London and County Bank, Journal XL, p. 333 86 Christie v. Fonsick, Sel. N. P. 9th ed. 351 ... 130 Clarke v. London and County Bank, 1897, 1 Q. B. 552 ; 66 L. J. Q. B. 354 ; 76 L. T. 293 ; 45 W. R. 383 . 16, 59 Clement v. Cheesman, 27 Ch. D. 631 ; 54 L. J. Ch. 158 . 128 Clodet;. Bayley, 12 M. & W. 51; 13 L. J. Ex. 17; 7 Jur. 1092 109 Glutton v. Attenborough, 66 L. J. Q. B. 122 ; 1897, A. C. 90 ; 75 L. T. 556; 45 W. R. 270 . 8, 27, 37, 81, 82 Commercial Bank of Scotland v. Rhind, 1 Macq. H. L. 643 123 Cox v. Masterman, 9 B. & C. 902 . . . . 110, 111 dimming v. Shand, 29 L. J. Ex. 129 ; 5 H. & N. 95 ; 1 L. T. 300; 8 W. R. 182 11, 13 Currie v. Misa, L. R. 10 Ex. 153 40 Day v. McLea, 58 L. J. Q. B. 293 ; 22 Q. B. D. 610 ; 60 L. T. 947 ; 37 W. R. 483 ; 53 J. P. 532 .. . 126 Dillon, In re, 44 Ch. D. 76 128 TABLE OF CASES. XI PAGE Down v. Hailing, 4 B. & C. 330 ; 3 L. J. 0. S. K. B. 234 ; 2 C. & P. 11 ; 6 D. & R. 455 Egg v. Barnett, 3 Esp. 196 Elwell v. Jackson, 1 Cab. & E. 362 . Emanuel v. Robarts, 9 B. & S. 121 ; 17 L. T. 646 88, 91 118 97 97 F. Hadley & Co. v. F. Hadley, 67 L. J. Ch. 694 ; 1898, 2 Ch. 680 ; 79 L. T. 299 122 Field v. Woods, 8 C. & P. 52 94 Fielding v. Corry, 67 L. J. Q. B. 7 ; 1898, 1 Q. B. 268 ; 77 L. T. 453 ; 46 W. R. 97 109, 110 Firth v. Brooks, 4 L. T. N. S. 467 . . 99, 100, 103 Fisher v. Roberts, 6 T. L. R. 354 53 Fitch v. Jones, 5 El. & Bl 238 ; 24 L. J. Q. B. 293 ; 1 Jur. N. S. 854 44 Fleming v. Bank of New Zealand, 69 L. J. P. C. 120 ; 83 L.T.I; 1900, A. C. 577 14 Fletcher v. Manning, 12 M. & W. 571 ; 2 Mont. D. & D. 654 ; 13 L. J. Ex. 150 120 Flower v. Shaw, 2 C. & K. 703 66 Forman v. Bank of England, 18 T. L. R. 339 . . 101, 103 Forster v. Mackreth, 36 L. J. Ex. 94 ; L. R. 2 Ex. 163 ; 16 L. T. 23 ; 15 W. R. 747 25, 96 Foster v. Bank of London, 3 F. & F. 214 . . . . 15 Fruhauf v. Grosvenor, 61 L. J. Q. B. 717 . . . 6, 113 Gaden v. Newfoundland Savings Bank, 1899, A. C. 281 ; 15 T. L. R. 228 2, 17, 41, 62, 123 Garden v. Bruce, 37 L. J. C. P. 112 ; L. R. 3 C. P. 300 ; 17 L. T. 544 ; 16 W. R. 366 130 Garnett v. McKewan, L. R. 8 Ex. 10 20 Garrard v. Lewis, 10 Q. B. D. 30 ; 47 L. T. 408 ; 31 W. R. 475 . 67 Gatty v. Fry, 46 L. J. Ex. 605 ; 2 Ex. D. 265 ; 36 L. T. 182 ; 25 W. R. 305 97 Gillespie v. International Bank of London, 4 T. L. R. 322 . 56 Glen v. Semple, 3 F. Sess. Cas. 1134 31 Goddard v. O'Brien, 9 Q. B. D. 37 ; 46 L. T. 306 ; 30 W. R. 549 . 126 Gordon v. Capital and Counties Bank, 1903, A. C. 240 . 59 Gordon v. London City and Midland Bank, ib. . 17, 59, 64, 84 Graham v. Cox, 2 C. & K. 702 121 Gray v. Johnston, L. R. 3 H. L. 1 ; 16 W. R. 842 . . 12 Great Western Ry. Co. v. London and County Bank, 1901, A. C. 414 ; 17 T. L. R. 720 ; 6 Com. Cas. 275 ; 70 L. J. K. B. 915 ; 88 L. T. 152 ; 50 W. R. 50 . 16, 17, 53, 57, 59,63 Gurney v. Womersley, 24 L. J. Q. B. 46 . . . . 34 TABLE OF CASES. 802 Cas Halifax Union v. Wheelwright, 32 L. T Hall v. Fuller, 5 B. & C. 750 Hannan's Lake View Central v. Armstrong, 5 Com 188 ; 16 T. L. R. 236 Hardy v. Veasey, L. R. 3 Ex. 107 .. . Hare v. Copland, 13 Ir. C. L. R. 426 . v. Henty, 10 C. B. N. S. 65 Hawse V. Crowe, 1 R. & M. 414 . I Ierdman v. Wheeler, 18 T. L. R. 190 ; 71 L. J. K. B 1002, 1 K. B. 472; 86 L. T. 173 ; 50 W. R. 325 Hewitt v. Kaye, L. R. 6 Eq. 198 . Hoywood v. Pickering, 43 L. J. Q. B. 145 ; L. R. 9 428 Hitchcock v. Edwards, 60 L. T. 636 . Hopkins v. Ware, 38 L. J. Ex. 147 ; L. R. 4 Ex. 268 ; L. T. 668 Hopkinson v. Forster, L. R. 19 Eq. 74 ; 23 W. R. 301 Hough v. May, 4 A. & E. 954 ; 6 N. & M. 535 ; 2 H. & W 33 ; 5 L. J. K. B. 186 ; 43 R. R. 530 . . Hughes, Ex parte, 43 L. T. 577 PAGE 72 68 55 15 83 100, 101 115,116 270 67 127 Q. B 20 101 97 98 1 121 90 Imperial Bank op Canada v. Bank of Hamilton, 1903, A. C. 49 2, 75, 111 Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599 ; 61 L. J. Q. B. 449 ; 66 L. T. 556 ; 56 J. P. 436 . . . . 24 Ingham v. Primrose, 7 C. B. N. S. 82 ; 28 L. J. C. P. 294 ; 5 Jur. N. S. 710 28, 35, 36 J. Bavins, Jun. v. London and South Western Bank, 16 T. L. R. 61 ; 5 Com. Cas. 1 . . . 1, 18, 55, 62, 64, 84 Jenkins v. Comber, 1898, 2 Q. B. 168 ; 67 L. J. Q. B. 780 . 30 Johns v. Mason, 9 Hare, 29 ; 20 L. J. Ch. 305 ; 15 Jur. 390 39 Jones v. Arthur, 8 D. P. C. 442 ; 4 Jur. 859 . . 125 v. Lock, 35 L. J. Ch. 117 ; 11 Jur. N. S. 913 ; 14 W. R. 149 128 v. Ryde, 5 Taunt. 488 ; 15 R. R. 561 .. . 34 Keene v. Beard, 8 C. B. N. S. 372 ; 29 L. J. C. P. 287 ; 6 Jur. N. S. 1248 ; 2 L. T. 240 ; 8 W. R. 469 . . . 6, 10 Kemble v. Mills, 2 Scott, N. R. 121 ; 1 M. & G. 757 ; 9 I). P. C. 446; 1 Drink. 22 112 . 23 . 15 11,12 674; 16, 56, 57 Kibble, Ex parte, L. R. 10 Ch. 373 . Kilsby v. Williams, 5 B. & Aid. 819 ; 24 R. R. 564 King v British Linen Co., 36 S. L. R. 733 Kleinwort v. Comptoir d'Escompte, 63 L. J. Q. B 1894, 2 Q. B. 157 TABLE OF CASES. xill PAGE Lacave v. Credit Lyonnais, 66 L. J. Q. B. 226 ; 1897, 1 Q. B. 148; 75 L. T. 514; 2 Com. Cas. 17 . . 16,56 Langrishj;. Watts, 1903, IK. B. 636 . . . . . 131 98 6 Laws v. Rand, 3 C. B. N. S. 442 Lee v. Newsam, D. & R. N. P. 50 ; 25 R. R. 7 Leeds Bank v. Walker, L. R. 11 Q. B. D. 84 Lewis v. Clay, 67 L. J. Q. B. 224 67 Lilley v. Rankin, 56 L. J. Q. B. 248 ; 55 L. T. 814 . . 44 Lloyd v. Sandilands, Gow, 13 119 London and County Bank v. Groorne, 51 L. J. Q. B. 224 8 Q. B. D. 288 ; 46 L. T. 60 ; 30 W. R. 382 ; 46 J. P. 614 91—93 London and River Plate Bank v. Bank of Liverpool, 1896, 1 Q. B. 7 Ill Loughnan v. Barry, 5 Ir. R. C. L. 538 . . . . 115 Lowe v. Fox, 54 L. J. Q. B. 561 ; 15 Q. B. D. 667; 53 L. T. 886 132 Lynn v. Bell, 10 Ir. R. C. L. 487 45 Mahoney v. East Holyford Banking Co., L. R. 7 H. L. 869 21 Marcussen v. Birkbeck Bank, 5 T. L. R. 179, 463 and 646 . 74 Marston v. Allen, 1 D. N. S. 442 ; 8 M. & W. 494 ; 11 L. J. Ex. 122 28, 37 Marzetti v. Williams, 1 B. & Ad. 415 ; 9 L. J. O. S. K. B. 42 ; 35 R. R. 329 12 Matthews v. Williams, Brown & Co., 10 T. L. R. 386 . 16, 56 Matthiessen v. London and County Bank, 5 C. P. D. 7 ; 48 L. J. C. P. 529 ; 41 L. T. 35 ; 27 W. R. 838 . . 54 May v. Chapman, 16 M. & W. 355 42 v. Chidley, 1894, 1 Q. B. 451 114 McKenzie v. British Linen Co., L. R. 6 A. C. 82 ; 44 L. T. 431 ; 29 W. R. 477 84, 86 M'Lean v. Clydesdale Banking Co., 9 A. C. 95 ; 50 L. T. 457 17, 19, 40 Mead, In re, 50 L. J. Ch. 30 ; 15 Ch. D. 651 ; 43 L. T. 117 ; 28 W. R. 891 127, 128 Megginson v. Harper, 2 C. & M. 322 130 Meyerhoff v. Froehlich, 4 C. P. D. 63 . . . . 131 Misa v. Currie, 45 L. J. Q. B. 852 ; 1 A. C. 554 ; 35 L. T. 414 ; 24 W. R. 1049 97 Moule v. Brown, 4 Bing. N. C. 266 ; 5 Scott, 694 ; 1 Arn. 79 ; 7 L. J. C. P. Ill ; 2 Jur. 277 .... 100 Mountford v. Harper, 16 M. & W. 825 ; 16 L. J. Ex. 184 . 119 National Bank v. Silke, 60 L. J. Q. B. 199; 1891, 1Q.B." 435 ; 63 L. T. 787 ; 39 W. R. 361 . . . 17, 19, 30, 63 National Bank of Scotland v. Dewhurst, 1 Com. Cas. 318 . 26 TABLE OF CASES. PAGE Ogden v. Benas, 43 L. J. C. P. 259 ; L. R. 9 C. P. 513 ; 30 L. T. 683 ; 22 W. R. 805 83 Ogilvie v. West Australian, etc., Corp., 1896, A. C. 257 . 86 Orr v. Union Bank of Scotland, 1 Macq. H. L. 513 ; 2 C. L. R. 1566 73, 83 Pape v. Westacott, 1894, 1 Q. B. 272 122 Patent Safety Gun Cotton Co. v. Wilson, 49 L. J. C. P. 713 87 Pearce v. Davis, 1 M. & Rob. 365 ... 120, 122 Pennington v. Crossley, 13 T. L. R. 573 . . . 39, 54 Prideaux v. Criddle, 10 B. & S. 515 . . . 100, 101, 109 Prince v. Oriental Bank, 3 A. C. 325 109 Pyke, Ex parte, 47 L. J. Bk. 100; 8 Ch. D. 754 ; 38 L. T. 923 ; 26 W. R. 806 44 R. v. Hazelton, 44 L. J. M. C. 11 ; L. R. 2 C. C. 134 ; 31 L. T. 451 ; 23 W. R. 139 ; 13 Cox, C. C. 1 . 116, 117 — v. Parker, 7 C. & P. 825 ;2M. C.C.I . . . 116, 117 — v. Prince, 32 L. T. 750 ; 11 Cox, C. C. 193 .. . 117 — v. Watts, 2 Den. C. C. 14 15 — v. Wilson, 1 Den. C. C. 284 ; 2 C. & K. 527 ; 17 L. J. M. C. 82 66 Raphael v. Bank of England, 17 C. B. 161 ; 25 L. J. C. P. 33 ; 4 W. R. 10 4 Reid v. Rigby, 1894, 2 Q. B. 40 26 Rhodes v. Morse, 14 Jur. 800 38 Richdale, Ex parte, 51 L. J. Ch. 462 ; 19 Ch. D. 409 ; 46 L. T. 116 ; 30 W. R. 262 17, 41, 97 Rickford v. Ridge, 2 Camp. 537 106 Riddcll v, Dobree, 10 Simons, 244 129 Ritchie v. Clydesdale Bank, 13 Sess. Cas. 866 . . 14 Robarts v. Tucker, 16 Q. B. 560 70 Robinson v. Hawksford, 9 Q. B. 52 ; 15 L. J. Q. B. 377 ; 10 Jur. 964 98 Robson v. Bennett, 2 Taunt. 388 ; 11 R. R. 614 . . 2, 104 Roe d. Langdon v. Rowlston, 2 Taunt. 441 ; 11 R. R. 640 133 Rogers v. Whiteley, 61 L. J. Q. B. 512 ; 1892, A. C. US ; 66 L. T. 303 114 Rolin v. Steward, 14 C. B. 595 ; 2 C. L. R. 959; 23 L. J. C. P. 148 ; 18 Jur. 536 ; 2 W. R. 467 . . . . 11 Rolls v. Pearce, 46 L. J. Ch. 791 ; 5 Ch. D. 730; 36 L. T. 438 ; 25 W. R. 899 127, 128 Royal Bank of Scotland v. Tottenham, 64 L. J. Q. B. 99 ; 1894, 2 Q. B. 715 ; 9 R. 569 ; 71 L. T. 168 ; 43 W. R. 22 17, 18, 24, 41, 94—96 TABLE OF CASES. XV PAGE Rothschild v. Comey, 9 B. & C. 388 ; 4 M. & R. 411 ; 7 L. J. 0. S. K. B. 270 ; 33 R. R. 209 . . . 89, 90, 92 Royal British Bank v. Turquand, 6 E. & B. 327 . . . 1 Samuel v. Green, 10 Q. B. 262 ; 16 L. J. Q. B. 239 ; 11 Jur. 607 37 Scholey v. Ramsbottom, 2 Camp. 485 77 Scholfield v. Londesborough, 65 L. J. Q.B. 593 ; 1896, A. C. 514 ; 75 L. T. 254 ; 45 W. R. 124 . . . . 69, 75, 78 Schroeder v. Central Bank of London, 34 L. T. 735; 24 W. R. 310 15 Serle v. Norton, 2 M. & Rob. 401 103 Serrell v. Derbyshire Rly. Co., 9 C. B. 811 ; 19 L. J. C. P. 371 ... 21 91 Simmons v. Taylor, 4 C. B. N. S. 463 ; 27 L. J. C. P. 248 ; 4 Jur. N S. 412 ; 6 W. R. 548 48 Smith v. Johnson, 3 H. & N. 222 ; 27 L. J. Ex. 363 . . 21 v. King, 1892, 2 Q. B. 543; 67 L. T. 420; 40 W. R. 542 ■ 56 J P 775 . 23 v. Union Bank, 45 L. J. Q. B. 149 ; 1 Q. B. D. 413 ; 33 L. T. 557 ; 24 W. R. 194 . . . 48, 50, 52, 53, 83 Soltykofi, In re, 60 L. J. Q. B. 339 ; 1891, 1 Q. B. 413 ; 39 W. R. 337 ; 55 J. P. 100 ; 8 Morrell, 27 . . 23, 43 Springfield v Lanezzari, 16 L. T. 361 100 Stamford Banking Co. v. Smith, 1892, 1 Q. B. 765 ; 61 L. J. Q. B. 405 . . 132 Stoessiger v. South Eastern Railway Co., 3 E. & B. 549 ; 2 C. L. R. 1595 ; 23 L. J. Q. B. 293 ; 18 Jur. 605 ; 2 W. R. 375 36 Summers v. City Bank, 43 L. J. C. P. 261 ; L. R. 9 C. P. 580 ; 31 L. T. 268 11 Supple v. Raymond, Ir. R. 6 134 Swan v. N. B. Australasian Co., 2 H. & C. 175 ... 72 Sweeney v. Freedman, 35 Ir. L. T. 187 . . . . 81 Tanner v. Smart, 6 B. & C. 603 ; 9 D. & R. 549 ; 30 R. R. 461 131 Tassell v. Cooper, 9 C. B. 509 15 Tatam v. Haslar, 58 L. J. Q. B. 432 ; 23 Q. B. D. 345 ; 38 W. R. 109 42 Tateu. Hilbert, 2 Ves. 120; 4 Bro. C. C. 286 . . 127,128 v. Wilts and Dorset Bank, Journal XX., p. 376 . 62 Taylor v. Scrivens, 1 Beav. 571 38 Townsend v. Deacon, 3 Ex. 706 ; 18 L. J. Ex. 298 . . 133 Twibell v. London Suburban Bank, 1869, W. N. 127 . 14 Vance v. Lowther, 45 L. J. Ex. 200 ; 1 Ex. D. 176 ; 34 L. T. 286 ; 24 W. R. 372 79 XVI TABLE OF CASES. Veal v. Veal, 27 Beav. 303 ; 29 L. J. Ch. 321 ; 6 Jur. N. S. 527 ; 2 L. T. 228 ; 8 W. R. 2 128 Wakefield v. Alexander, 17 T. L. R. 217 .... 9 Watson v. Evans, 1 H. & C. 662 ; 32 L. J. Ex. 137 . . 32 Watson v. Russell, 5 B. & S. 968; 34 L. J. Q. B. 93; 11 L. T. 641 ; 13 W. R. 231 Whistler v. Porster, 14 C. B. N. S. 248; 32 L. J. C. P. 161 8 L. T. 317 ; 11 W. R. 648 . . . . 29, 97, 119 Whitmore v. Wilks, 3 C. & P. 364 Williams v. Davies, 33 L. J. Prob. 127 ... v. Jarrett, 5 B. & Ad. 32 ; 2 N. & M. 49 ; 2 L. J K. B. 156 97 Willy v. Warren 125 Wirth v. Austin, L. R. 10 C. P. 689 ; 32 L. T. 669 . . 104 Woodland v. Fear, 7 E. & B. 519 ; 26 L. J. Q. B. 202 ; 3 Jur. N. S. 587 ; 5 W. R. 624 19 Woolf v. Hamilton, 67 L. J. Q. B. 917 ; 1898, 2 Q. B. 337 79 L. T. 49 ; 47 W. R. 70 44 Wych v. E. I. Co., 3 P. W. 309 133 Young v. Grote, 5 L. J. O. S. C. P. 165 ; 4 Bing. 253 ; 12 Moore, 484 ; 29 R. R. 552 . . . . 68—76, 78 40 76 127 TABLE OF STATUTES. 21 Jac. I., c. 16 . 9 Geo. IV. c. 11 . 5 & 6 Will. IV. c. 11 . 8 & 9 Vict. c. 109 . 16 & 17 Vict. c. 59, s. 19 19 & 20 Vict. c. 97 24 & 25 Vict. c. 98 (Forgery Act) 37 & 38 Vict. c. 62 (Infants Relief Act) 39 & 40 Vict. c. 81 (Crossed Cheques Act) 42 & 43 Vict. c. 11 (Bankers Book Evidence 45 & 46 Vict. c. 61 (Bills of Exchange Act) 46 & 47 Vict. c. 55, s. 17 (Revenue Act) 54 & 55 Vict. c. 39 (Stamp Act) . Act) PAGE . 130 . 130 44, 45 . 44 72, 119 . 133 64,79 . 22 . 54 . 123 passim 1, 61, 64 95 L.C THE LAW KELATING TO CHEQUES. CHAPTER I. DEFINITION. 1. — A cheque is a bill of exchange drawn on a banker payable on demand. (S. 73) (a). Cf. Hopkinson v. Forster, L. R. 19 Eq. 74. It is not an assignment of money in a banker's hands. By construing s. 73 with s. 3, which defines a bill of exchange, we get the following definition of a cheque : — "A cheque is an unconditional (b) order in (a) A reference to a section without citing any Act is a refer- ence to the Bills of Exchange Act, 1882, hereinafter referred to as "the Act." (i) A cheque with a receipt form attached, with this order " Pay . . . provided the receipt form at foot hereof is duly signed stamped and dated," is not a cheque within the Act, but it is brought within ss. 76 to 82 of the Act by the effect of s. 17 of the Revenue Act, 1883, see p. 64 (J. Bavins, Jim. and Sims v. London and South Western Bank, 5 Com. Cas. 1). L.C. 1 2 BILL AM) CHEQUE DISTINGUISHED. writing addressed by one person to another, being a banker, requiring the person to whom it is addressed to pay on demand a sum certain in money to or to the order of a specified person or to bearer." The chief differences between a bill and a cheque are : — (1) Bills are payable on demand (c) or at a fixed and determinable future time, e.g., three months after date or after sight. Cheques are always payable on demand. There are thus no " days of grace " in the case of cheques. Bills are intended for circulation ; cheques for immediate payment. (2) A cheque requires no presentment for accept- ance and no acceptance (d). The addressee of a cheque is not like the addressee of a bill, who, by accepting, becomes liable, if he dishonour the bill on presentment for payment, to a holder. A banker, (r) Bills payable on demand, other than cheques, arc practically not in use in this country. () Whether he has or not may be difficult of proof. See generally Bra why v. East London Bank, 14 L. T. 403, a case not establishing any particular principle. ]2 DAMAGES FOR DISHONOUR. damages, was right. In the older case of Marzetti v. Williams, 1 B. & Ad. 415, it was held that an action would lie for dishonouring a cheque, but no direction was given on the question of the amount of damages, though Tenterden, C.J., expressed him- self as if he thought they should be nominal, if no actual damage were proved. In King v. British Linen Co., supra, the defendant bank was held liable for the damage to the plaintiff's financial reputation, they having dishonoured his cheque under these circumstances. He drew the cheque on 21st October. The bank wrote to him on the 22nd requesting him to pass no more cheques, as they intended to retain any money at his credit, pending the settlement of a claim by them. He replied that he drew the cheque in question prior to the receipt of their letter, and that if they dis- honoured it his financial credit would be injured. The bank dishonoured the cheque on presentment through the clearing house, returning it marked, " Effects to be retained. Eefer to Drawer." It is a defence, where a banker dishonours the cheque of a customer, drawn by him as executor or trustee, to show an intention on the drawer's part to commit a breach of trust by misapplication of the money, and that the banker was cognizant of it. Gray v. Johnston, L. It. 3 H. L. 1. EFFECT OF COURSE OF PRACTICE. 13 dimming v. Shand, 29 L. J. Ex. 129, is a case of interest to commercial men. The facts were as follows : — The defendants, bankers, took up bills for the plaintiff, their customer, on the security of the produce of consignments, and by a course of dealing they permitted him to draw on his current account, without reference to the advances on the consign- ments. "When he had 2001. to the credit of his current account, they dishonoured his cheque for 199Z. 10s., as they feared the security of the recent consignments was not sufficient to cover the amount of the acceptances taken up by them against the security. It was held that in the absence of express notice the defendants were not entitled to bring advances against consignments into the current account, and so to dishonour the cheque, and that it was properly left to the jury to say whether such notice had in fact been given. A banker is under no obligation to let a customer overdraw, and if he does allow him to do so, he need give him no notice to put an end to the prac- tice (Cwmming v. Shand, supra, at p. 132). Another case on the effect of a course of practice is Armfidd v. London and Westminster Bank, 1 Cab. & E. 170. The plaintiff sued the defendant bank for dis- honouring his bill : proved that he had no funds sufficient to meet it, save by crediting as cash 14 OVERDRAFTS — UNAUTHORISED PAYMENT cheques paid in by him but not cleared : proved that the bank had always credited such cheques to him as cash : held that the bank could not as against him set up their discretion whether or not to treat such cheques as cash. As to what does and what does not amount to an implied agreement to allow an overdraft, see Ritchie v. Clydesdale Bank, 18 Sess. Cas. 866, and Fleming v. Bank of New Zealand, 1900, A. C. 577, where it was held that the deposit with the bank by the plaintiff's agent of a store warrant, known to the bank to be subject to a pledge to the agent, was sufficient consideration for the bank's promise to honour the plaintiff's cheques drawn against the security of the deposit, in lieu of cash ; it was also held that special damage from the dishonour of the cheques not having been alleged, evidence thereof, i.e., of the loss of credit and custom from particular individuals, was inadmissible. In Twibcllv. London Suburban Bank, 1869, W. N. 127, it was held that when the plaintiff and his partner on opening their account stipulated with the defendant bank that no cheque drawn by one partner should be honoured unless initialled by the other partner, and the defendant bank in breach of this paid a cheque not so initialled by the plaintiff, the plaintiff could recover damages, and that the measure of damages was a moiety of the cheque so paid. BANKER NOT LIABLE TO HOLDER. 15 A banker should, in the absence of any directions, pay cheques in the order of presentment (Kilsby v. Williams, 5 B. & Aid. 815). A paid cheque is the property of the drawer (R. v. Watts, 2 Den. C. C. 14), but the banker may retain it as a voucher till his account is settled (lb. at p. 21, and cf. Charles v. Blackwell, 2 C. P. D. at p. 162). It is uncertain whether such a legal duty is imposed on a banker to keep secret the state of his customer's account as to make him liable for disclosure of it, without justifiable cause, in the absence of proof of special damage. The question was considered in Hardy v. Veasey, L. E. 3 Ex. 107, where it was held that the question whether there was justifiable cause was properly left to the jury, who found that there was such a cause ; the Court had consequently not to consider the main question. Other cases are Foster v. Bank of London, 3 F. & F. 214 ; and Tassell v. Cooper, 9 C. B. 509. 21. — A banker is not liable if he dishonour a cheque in any action by any person other than the drawer. (See Sclirocder v. Central Bank of London, 34 L. T. 735 ; and Bellamy v. Marforibanks, 7 Ex. 389.) This is not so in Scotland. By Scotch law pre- sentment of a cheque gives the holder a lien on the drawer's balance at the bank. 16 WHO IS A CUSTOMER? 22. — The relation of banker and customer is con- stituted where a person has funds in the hands of such banker, or is permitted by such banker to draw cheques upon him, or has an account with him, whether having at the time funds in such banker's hands or not (/), and (//) may be constituted where cheques are habitually lodged with a banker for pre- sentation on behalf of the persons lodging them, so that when honoured the amount is credited and paid out to such person, whether with or without any profit to the banker for so presenting them. The mere cashing across the counter of cheques, of which a person is the payee or holder, does not con- stitute such person the customer of the banker so cashing such cheques. Nor does the collection of a single cheque for a stranger, whether in consideration of a commission or not. This is the law as laid down upon the construc- tion of s. 82 in Matthews v. Williams, Broun, & Co., 10 T. L. R. 386 ; Lacave v. Credit Lyonnais, 1897, 1 Q. B. 148 ; G. W. By. Co. v. London and County Bank, 1901, A. C. 414. In Kleimcort v. Comptoir d'Escompte, 1894, 2 Q. B. 157, s. 82 was not discussed, but the collection was for a stranger. (/) Clarke v. London and County Bank, 1897, 1 Q. B. 552. GO Lord Brampton, 1901, A. C. pp. 422, 423. BANKER A HOLDER IN DUE COURSE. 17 The authorities stop short of saying that a man must have an account at a bank to be a customer. See Lord Brampton, 1901, A. C. at p. 422; but Collins, J., 1897, 1 Q. B. at pp. 154, 155, very nearly goes as far as that. 23. — A banker who places a cheque to the credit of a particular customer as cash thereby becomes a holder in due course of such a cheque, and as such may sue all parties liable thereon, unless such cheque has been made not transferable under s. 8 (1), in which case the property therein does not pass to such banker. Ex parte Richdale, 19 Ch. D. 409 ; M'Lean v. Clydesdale Bank, 9 A. C. 95 ; National Bank v. Silke, 1891, 1 Q. B. 435 ; Royal Bank of Scotland v. Tottenham, 1894, 2 Q. B. 715 ; Bissell v. Fox, 51 L. T. N. S. 663 ; G. W. Ry. Co. v. London and County Bank, 1901, A. C. 414; Gordon v. London City and Midland Bank, 18 T. L. B. 157. If the view taken in Ex parte Richdale be correct, the banker becomes holder in due course whether the customer was overdrawn or not, and has no recourse against him, except on his indorsement. The view taken by the Privy Council in Gaden v. Newfoundland Savings Bank, 1899, A. C. 281, was that in such case the banker took only as the customer's agent for collection. Ex parte Richdale and Royal Bank of Scotland l.') See also Serrell v. Derbyshire By. Co., 9 C. B. 811, where a company was held not liable on cheques drawn by its directors, properly sealed, but not drawn by the directors as such, nor appearing on the face of them to have been drawn on behalf of the company. 22 INFANTS. writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal. "But nothing in this section shall be construed as requiring any bill or note of a corporation to be under seal." By the Infants' Relief Act, 37 & 88 Vict. c. 62, it is provided that — S. 1. — "All contracts, whether by specialty or simple contract, henceforth entered into by infants for the repayment of money lent or to be lent, or for goods supplied or to be supplied (other than contracts for necessaries), and all accounts stated with infants, shall be absolutely void : Provided always that this enactment shall not invalidate any contract into which any infant may, by any existing or future statute, or by the rules of common law or equity, enter, except such as now by law are voidable." S. 2. — " No action shall be brought whereby to charge any person upon any promise made after full age to pay any debt contracted during infancy, or upon any ratification made after full age of any promise or contract made during infancy, whether there shall or shall not be any new consideration for such promise or ratification after full age." Thus an infant is not liable as drawer or indorser of a cheque, though he may be liable on the MARRIED WOMEN. 23 consideration, as if he gave it for necessaries (k). And he may not be made bankrupt on a cheque or bill, though given as the price of necessaries. His liability is on the consideration, not on the instrument. (In re Soltykoff, 1891, 1 Q. B. 413.) By s. 2 he would not be liable to a holder with notice on a cheque signed after majority in con- sideration of a debt contracted before majority, or in ratification of a promise to repay made when an infant. (Smith v. King, 1892, 2 Q. B. 543.) But if he gave a cheque after majority, he would be liable to a holder in due course, notwithstanding that he gave it in respect of a debt or promise contracted or made as an infant. (Cf. Belfast Banking Co. v. Dohcrty, 4 Ir. L. B. Q. B. D. 124.) In Ex parte Kibble, L. B. 10 Ch. 373, an infant accepted a bill payable six months after date. It was thus payable three months after he came of age. On majority he ratified the transaction (/). He was held not to be liable to a holder in due course. We conclude if he had signed a cheque as an infant, post-dated so as to be payable after majority, and could have proved that he signed it (&) " The person who has supplied an infant with necessaries can always sue on that contract for the price of what he has supplied." (Esher, M.R., 1891, 1 Q. B. at p. 41 5.) (Z) He let judgment on the bill go against him by default. 2 1 CHEQUES IN FIRM'S NAME. when an infant, be would be not liable upon it. An infant's indorsement, by s. 22 (2), passes the property in a cheque, though he be not liable upon it, and it is immaterial that the cheque is post- dated, though this point was raised in Royal Bank of Scotland v. Tottenham, before Wills, J. (1894, 2 Q. B. 715, on appeal only). The effect of the Married Women's Property Act, 1893, s. 2, is to place married women on the same footing as single women in respect of liability on cheques, to which they became parties since the Act came into operation. Insanity is no defence to an action on a cheque by a holder in due course. The party sued must prove that the plaintiff had notice of it. (Cf. Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599.) PRINCIPAL AND AGENT. 25. — No person is liable as drawer or indorser of a cheque who has not signed it as such ; provided that — (1) Where a person signs a cheque in a trade or assumed name, he is liable thereon as if he had signed it in his own name. (2) The signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm. (S. 23.) A partner in a non-trading firm is not presumed PROCURATION AND AGENCY. 25 to have any authority to bind the firm by drawing bills in the firm's name. A cheque post-dated a week was drawn by a partner in the name of a firm of solicitors as security for a private loan. Held it was a bill at seven days and did not bind the firm. (Forstcr v. Mackreth, 36 L. J. Ex. 94.) As regards ordinary cheques in a firm's name, whether the firm were a trading firm or not, a holder could sue the firm, whether the cheques were drawn on its behalf or by a fraudulent partner for his own purposes. Only positive knowledge of the facts would disentitle a holder to recover. See further Chalmers' notes to s. 23, and Byles, Chap. V. 26. — A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority. (S. 25.) Such a signature is in the principal's name, followed by " p.p.," or " per pro.," and the agent's name. A bank paying on a forged or unauthorized indorsement "per pro." may be protected by s. 60. (Cf. Charles v. Blackwell, 2 C. P. D. 151, at pp. 159, 160.) 20 PRESUMPTION OF VALIDITY. If an agent draws a cheque " per pro." in excess of his authority, his principal is not liable thereon to a person who has cashed the cheque in good faith, but he is liable to him for any proceeds that have come into his possession or been expended on his behalf. (Rcid v. Rigby, 1894, 2 Q. B. 40.) See also National Bank of Scotland v. Dewhurst, 1 Com. Cas. 318. 27. — Where a person signs a cheque as drawer or indorser and adds words to his signature indicating that he signs for or on behalf of a principal, or in a representative character he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. (S. 26 (1).) It is further provided by s. 26 (2) : " In determining whether a signature on a bill is that of the principal or that of the agent b}' whose hand it is written, the construction most favour- able to the validity of the instrument shall be adopted." See Chalmers' notes for illustrative cases. ( 27 ) CHAPTER TIL ISSUE NEGOTIATION — NON-TRANSFERABLE CHEQUES RESTRICTIVE INDORSEMENT — NEGOTIATION WITH- OUT INDORSEMENT — " ORDER " AND " BEARER " — TRANSFER BY DELIVERY WITHOUT INDORSEMENT — LOST CHEQUES. 28. — Issue means the first delivery of a cheque, complete in form, to a person who takes it as a holder. (S. 2.) In Glutton v. Attenborough, 1897, A. C. 90, the plaintiff signed cheques payable to " G. B.," a fictitious person who was fraudulently represented by the plaintiff's clerk to be a real person, who had done work for the plaintiff. The clerk indorsed the cheques " G. B." and negotiated thern for his own purposes. Held that the cheques were ' ' issued ' ' within s. 2. The case was treated as exactly covered by Vagliano's Case, 1891, A. C. 107. The contention of Tindal Atkinson, Q.C., was that the cheques were never " issued " by Clutton, inasmuch as there was no " first delivery" of them to a " person who took them as holder," for the 28 WHEN VALID DELIVERY IS PRESUMED. fraudulent clerk P. could not be said to take them as holder ; the delivery to P. was " conditional and for a special purpose only" (s. 21 (2) (b)), namely to pay the person G. B., supposed by Clutton to be his actual creditor ; but this argument was unavailing against Attenborough, who was a holder in due course, and it appears to us that s. 21 (2) (b) in itself contains an answer to the argument, " But if the bill be in the hands of a holder in due course, a valid delivery of the bill by all parties prior to him so as to make them liable to him is conclusively presumed." § 28 must be construed with reference to s. 20 of the Act, set out as § 52 herein. It seems from Ingham v. Primrose, 7 C. B. N. S. 82, that the drawer of a " bearer" cheque might be liable to a holder in due course, though the drawer had never issued it, it being stolen before issue. See Chalmers, p. 55. 29. — A cheque is negotiated when it is transferred from one person to another in such a way as to con- stitute the transferee the holder of the cheque. A cheque payable to bearer (a) is negotiated by delivery. A cheque payable to order is negotiated by the indorsement of the holder (b), completed by delivery. (a) See § 13, Chapter II., for the explanation of "bearer "and " order." (h) See Marston v. Allen, 8 M. & W. 494. TRANSFER WITHOUT INDORSEMENT. 29 Where the holder of a cheque payable to his order transfers it for value without indorsing it, the transfer gives the transferee such title as the transferor had in the cheque, and the transferee in addition acquires the right to have the indorsement of the transferor. (S. 31 (4).) "Negotiate" as thus denned means simply " transfer," and a cheque may be " negotiated " which is " not negotiable." A negotiation only makes the transferee the holder ; it does not make him the holder in due course. It was settled in Whistler v. Forster, 14 C. B. N. S. 248, that a bond fide transferee for value, who did not see that his transferor indorsed the cheque, was not entitled to recover against a party from whom the transferor had obtained the cheque by fraud. A simple signature on a cheque is a sufficient indorsement. An indorsement must be of the entire cheque, i.e., of the whole sum payable, or else it does not operate as a negotiation of the cheque. (S. 32.) The distinction between special indorsement and indorsement in blank has been explained in § 18. By s. 37 of the Act it is provided that " where a bill is negotiated back to the drawer, or to a prior indorser, or to the acceptor, such party may, 30 NON-TRANSFERABLE CHEQUE. subject to the provisions of this Act, reissue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable." (See Jenkins v. Comber, 1898, 2 Q. B. 168.) This section, except where it mentions renegotia- tion to an acceptor, is applicable to cheques. 30. — Where a cheque contains words prohibiting transfer, or indicating an intention that it should not be transferable, it is valid as between the parties thereto, but it is not negotiable. (S. 8 (1).) It was assumed in National Bank v. Silke, 1891, 1 Q. B. 485, that a cheque might be made not transferable under this sub-section, read with s. 73. That case decided that a crossing "Account of J. F. M., National Bank, Dublin," dees not amount to "words prohibiting transfer"; conse- quently J. F. M.'s banker, as holder in due course, could sue the drawer, although as between J. F. M. and the drawer the consideration had wholly failed. The cheque was an " order " one, and Lindley and Fry, L.JJ., doubted if "order" or "bearer" cheques could be made not transferable under s. 8 (1). Fry, L.J., at p. 439 says that the section divides bills into three classes : bills not negotiable, bills payable to order, and bills payable to bearer. The latter two classes must always therefore be NON-TRANSFERABLE CHEQUE. 31 " negotiable," in the sense of " transferable." The word " negotiable " in this section and in the marginal note is used to mean transferable. A bill may be restrictively indorsed so as to be not "negotiable " in the more technical sense and yet be transferable. (S. 36 (2).) So also a cheque crossed " not negotiable " is freely transferable. This confusion of language, which occurs not only in s. 8 but elsewhere in the Act, led Lindley, L.J., to doubt whether a cheque could be made " not negotiable" under s. 8 or otherwise than under ss. 76 — 82. In other words, he doubted whether a cheque could be made "not transferable'''' at all. It is submitted that this doubt was not well founded. S. 73 leaves s. 8 applicable to cheques. S. 81 provides for making a cheque "negotiable subject to equities," if we may use a phrase intelligible to all lawyers, but not for making a cheque " not negotiable" in the sense of "not transferable." An order on the face of the cheque similar to that on the back of a bill restrictively indorsed would have the effect of making it not transferable. Deleting the words " or order " and writing " Pay K. against cheque " (i.e., K.'s cheque delivered by way of security) have no effect to restrict transfer or negotiation within s. 8, and do not amount to a " condition " within s. 3 (Glen v. Semple, 3 F. Sess. Cas. 1134). 32 RESTRICTIVE INDORSEMENT. 31. — When a cheque is payable to the order of two or more payees or indorsees, who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others. (S. 32 (3).) If a cheque is payable to " C. and D. or to the order of either of them," the indorsement of either is thereby rendered sufficient. (Cf . Watson v. Evans, 32 L. J. Ex. 137, a case on a note payable to three payees.) 32. — Where in a cheque payable to order the payee or indorsee is wrongly designated or his name is mis-spelt, he may indorse the cheque as therein described, adding, if he think fit, his proper signature. (S. 32 (4).) This is useful, as it would often be very incon- venient to return the cheque to drawer. 33. — An indorsement is restrictive which prohibits the further negotiation of the cheque, or which ex- presses that it is a mere authority to deal with the cheque as thereby directed, and not to transfer the ownership thereof, as, for example, if a cheque be indorsed "Pay D. only," or "Pay D. for the account of X.," or " Pay D. or order for collection." (S. 35 (1).) See Chalmers' notes to this section for further illustrations. 34. — A restrictive indorsement gives the indorse TRANSFER BY DELIVERY. 33 the right to receive payment of the cheque, and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorser unless it expressly authorizes him to do so. (S. 35 (2).) The reader should distinguish the effects of restric- tive indorsement and crossing "not negotiable." A cheque crossed "not negotiable " is still transferable, but a cheque restrictively indorsed is not even trans- ferable, unless the indorsement expressly authorizes further transfer. 35. — Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the cheque with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. (S. 35 (3).) I.e., it becomes "not negotiable." 36. — Where a holder of a cheque payable to bearer negotiates it by delivery without indorsing it, he is called a "transferor by delivery." A transferor by delivery is not liable on the instru- ment. A transferor by delivery who negotiates a cheque thereby warrants to his immediate transferee, being a holder for value, that the cheque is what it purports to be; that he has a right to transfer it; and that L.C. 3 34 DELIVERY TO COMPLETE CONTRACT. at the time of transfer he is not aware of any fact which renders it valueless. (S. 58.) See for examples Jones v. Ryde, 5 Taunt. 488, and Gurney v. Womersley, 24 L. J. Q. B. 46. 37. — The contract entered into by the drawer and indorser of a cheque, in drawing and indorsing, is incomplete and revocable until delivery of the instru- ment in order to give effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery — (a) In order to be effectual, must be made either by or under the authority of the party drawing, or indorsing, as the case may be. (b) May be shown to have been conditional or for a special purpose only, and not for the purpose of transferring property in the cheque. But if the cheque be in the hands of a holder in due course, a valid delivery of the cheque by all parties prior to him, so as to make them liable to him, is conclusively presumed. Where a cheque is no longer in possession of a party who has signed it as drawer or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved. (S. 21.) In Baxendale v. Bennett, 3 Q. B. D. 525, an EFFECT OF WRONGFUL NEGOTIATION. 35 incomplete bill was stolen after B. had accepted it in blank. B. had sent it to C. for C. to sign as drawer. C. returned it unsigned, and B. put the blank acceptance into his drawer, whence it was stolen, filled up and negotiated to the plaintiff. B. was held not liable upon his acceptance. His name was not put upon a bill, but only upon an inchoate instrument, and, as we shall see, " in order that any such instrument, when completed, may be enforceable against any person who became a party thereto prior to its completion, it must be filled up . . . strictly in accordance with the authority given." (§ 52, embodying s. 20 of the Act.) The instrument in this case was not so filled up, and B. was not liable. Ingham v. Primrose, 7 C. B. N. S. 82, was a case where an acceptor of a bill which had a drawer's name (Murgatroyd's) thereto, and was a complete bill, tore it up, as the drawer told him he could not get it discounted. The drawer, in his presence, picked it up and subsequently pasted it together and negotiated it, its appearance not suggesting cancella- tion. The acceptor was held liable to a holder in due course. He had put his name to it as a complete instrument. Chalmers suggests from the dictum of Williams, J., at p. 85, that if A. drew a cheque payable to nearer, intending to pay it to X., and it was stolen 3—2 36 INCHOATE AND COMPLETE INSTRUMENT. from his desk before he issued it, he would be liable on it to a holder in due course (p. 55). On the wording of s. 21 (2) (b), this view seems correct. Baxendale v. Bennett, and Ingham v. Primrose, are reconcilable decisions. In Baxendale v. Bennett the instrument was stolen before it was complete. It was never " delivered by the signer in order that it might be converted into a bill." In Ingham v. Primrose the bill was complete when it was torn up, and so "a valid delivery " by the drawer was " conclusively presumed " so as to make him liable. This, it is submitted, is the real distinction between the two cases. Bramwell, L.J., in Baxendale v. Bennett points out that in Ingham v. Primrose the instrument was not stolen, and in the case before him it was. In Ingham v. Primrose " the defendant voluntarily parted with the instrument." Here it was only obtained from him by the commission of a crime (p. 530). Brett, J., simply does not agree with Ingham v. Primrose (pp. 532, 533). Neither judge notices that the bill in Ingham v. Primrose was a complete bill, with a drawer's signature, while that in Baxendale v. Bennett was an inchoate instrument, not drawn at all ! (Cf. Stoessiger v. South Eastern Railway, 3 E. & B. 549.) DELIVERY WITHOUT NEGOTIATION. 37 The case of Clutton v. Attenborough, 1897, A. C. 90, is directly in point. The plaintiff drew cheques to the order of G. B., a fictitious person, represented by his clerk to be the plaintiff's creditor. He gave them to the clerk to pay to G. B. It was held that he could not set up against a holder in due course that there had been no "first delivery " of the cheques to any person who took them as holder. S. 21 (3) may be illustrated by Marston v. Allen, 8 M. & W. 494. It was there held that a party sued on a bill may show that the indorser never delivered it so as to negotiate it, for there must be delivery and indorsement of a bill payable to order (s. 31 (3)). " A valid and unconditional delivery is presumed until the contrary is proved" (s. 21 (3)). When the contrary is proved, the burden of proving himself a holder in due course is shifted to the person relying on the instrument. It was held that evidence ought to have been admitted that there was no delivery of the bill in question so as to negotiate it, and that the plaintiff was aware of it, for on such evidence the jury would have found for the defendant. A jury may infer a delivery by A. to B. where A. has delivered a cheque to C. to get it discounted, and C. has not disclosed B.'s identity to A. (Samuel v. Green, 10 Q. B. 262.) 38 S. 69 AND CHEQUES. LOST CHEaUES. S. 69 of the Act provides as follows : — " Where a bill has been lost before it is overdue, the person who was the holder of it may apply to the drawer to give him another bill of the same tenor, giving security to the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost shall be found again. " If the drawer, on request as aforesaid, refuses to give such duplicate bill (d), he may be compelled to do so." The words " before it is overdue " must, we think, be taken not to apply to cheques. S. 74 provides what is the position of the drawer when a cheque is overdue. He is not discharged, like the drawer of a bill, but only to the extent to which he is a creditor of the bank to a larger amount than he would have been had the cheque been presented within a reasonable time (see s. 45 (2)). S. 69 gives no power to obtain an indorsement over again, or, in the case of a bill, the acceptance. S. 70 of the Act provides that — " In any action or proceeding upon a bill, the Court or a judge may order that the loss of the ( deprived of the protection of s. 82, as lie had not acted without negligence.) Paget ("Decisions affecting Bankers," p. 295) regards s. 17 as only extending protection to cases where the banker collects for the original payee of such documents. I.e. ( 06 ) CHAPTER VI. BLANK CHEQUES AND IMPERFECT CHEQUES — FRAUDULENT FILLING IN AND ALTERATION OF AMOUNT — THE WORDS AND FIGURES MATERIAL ALTERATION CRIMES RELATING TO FORGERY, ETC., OF CHEQUES. 52. — When a simple signature on a blank form of cheque is delivered by the signer in order that it may be converted into a cheque, it operates as a prima facie authority to fill it up as a complete cheque for any amount ; and in like manner, when a cheque is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he thinks fit. (a) In order that any such instrument when com- pleted may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a question of fact. (n) See Flower v. Shaw, 2 C. & K. 703. The plaintiff, a secretary, without authority filled up a cheque drawn by directors for an amount he alleged was due to him. Held, even if such sum was due, the cheque was a forgery and the plaintiff could not recover. Cf. also Jt. v. Wilson, 2 C. & K. 527. YOUNG V. GROTE. 67 Provided that, if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given. (S. 20.) See cases cited in notes to §§ 28 and 37. A cheque handed to a payee is not negotiated to a holder in due course within ss. 20, 21 and 29. There can be no " negotiation " to an immediate party. (Lewis v. Clay, 67 L. J. Q. B. 224; Herdman v. Wheeler, 1902, 1 K. B. 472.) 53. — Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the amount payable. (S. 9 (2).) A banker, though justified in paying the amount in words, would in practice return such a cheque with answer, "Words and figures differ." (See Moxon, Practical Banking, 10th ed. p. 9.) The words, however, are the governing and only essential part of the cheque, so far as the amount payable is concerned. In Garrard v. Lewis, 10 Q. B. D. 30, the amount was inserted in figures only. A holder inserted a 5—2 68 THE RATIO DECIDENDI NOT CLEAR. larger sum in words, and altered the figures to correspond. The drawer was held liable on the bill as altered, to a holder in due course. It was legally immaterial that the figures had been altered to suit the words, inasmuch as, even if they had not, the amount denoted in words would have been the amount payable. The amount in words should, therefore, be always filled in before issue. 54. — Where a cheque is so carelessly (b) filled up by the drawer, both as to words and figures, that it is capable of fraudulent alteration to a larger amount, and the cheque is so altered, and the alteration is not appa- rent, and the banker on whom the cheque is drawn pays the larger amount without negligence, then, as between the banker and the drawer, the loss falls on the drawer. This embodies the much-criticized decision in Young v. Grote, 4 Bing. 253. The facts were these : Young left a blank cheque with his wife to be filled up to pay wages. Worcester, his clerk, filled it up for 501. 2s. 3d., and showed it so filled up to Mrs. Young, who sanctioned it, although Worcester had left space enough to alter the amount. Afterwards Worcester {b) Unless the customer is negligent, any loss consequent upon a fraudulent alteration fails on the banker. {Hall v. Fuller, 5 B. & C. 75U, etc.) YOUNG V. OROTE. 69 altered the sum payable to 3501. 2s. 3d., and the alteration was in no way apparent. The defendant, the banker, paid this sum to Worcester. It was held that he could debit Young's account with 350/. 2s. 3d., "as he had been misled by a want of proper caution on the part of his customer." (Best, C.J., at p. 260), and "as the blame is all on one side " (Burrough, J., at p. 260), and as " there was certainly great negligence on the part of Young" (Gaselee, J., at p. 261). This case has been frequently adversely criticized. In ScholfieJd v. Londesborough, 1896, A. C. 514, the respondent accepted a bill for 500/., which was so drawn that S., the drawer, was enabled to alter it, without its being apparent, to 3,500/. The House of Lords decided that a holder in due course could only recover 500/. Halsbury, L.C., at p. 522, says Young v. Grote must be examined to see " how far it ought to be quoted as an authority for anything," and he proceeds to comment on it, and observes that the judgments show much confusion. Now on one point all the four judges in Young v. Grote were agreed — Young had been negligent, and Grote had not. It is true that Best, C.J., and Park, J., think the negligence consisted in Young's leaving blank cheques with his wife, who was ignorant of business. 70 THE RATIO DECIDENDI NOT CLEAR. It appears to us a better view that the negligence for which he had to suffer was that of his wife, who as his agent sanctioned the cheque drawn by Worcester with spaces for alteration. And Park, J., also decides upon the ground that the cheque left by Young to be filled up by his wife, " when filled up by her, became his genuine orders " (p. 260) ; and this reason is described by Halsbury, L.C., 1896, A. C. at p. 523, as " the perfectly sound view upon which he decides in the defendant's favour." And Lords Watson and Macnaghten also think the decision supportable on the ground that the delivery of a blank cheque gives an implied authority to a holder to fill it up for any amount, and they cite Parke, B., in Robarte v. Tucker, 16 Q. B. 560, who, in commenting on Young v. Grote, said : " The customer had, by signing ablank cheque, given authority to the person in whose hands it was to fill up the cheque in whatever way the blank permitted." But the cheque when fraudulently altered was not a blank cheque. It was a genuine order for 50/. 2s. 3d. We cannot understand the view of Park, J., and Halsbury, L.C., that the cheque could be regarded as a/' genuine order " for the larger sum to which Worcester afterwards altered it. Nor can we understand the same view, as expressed by Parke, B., and Lords Watson and Macnaghten, OBSERVATIONS ON YOUNG V. GROTE. 71 that the decision turned upon the implied authority of a holder to fill up a blank cheque. Willis, in his lectures (c) on negotiable instru- ments, expresses his opinion that the decision can- not be so regarded, inasmuch as the case was not one of filling up a blank cheque. In point of law, the case was as :f Young, or Mrs. Young, as his agent, had written out the cheque for 50?. 2s. del., in the careless way in which it was written, and had then given it to Worcester. The negligence which led to the loss was that of Mrs. Young in sanctioning the cheque as drawn by Worcester, and Young would have been no less liable for her negligence as his agent even had he been able to show that she was ordinarily a most accomplished woman of business. It appears to us, therefore, that the observations of Best, C.J., and of Park, J., as to the negligence consisting in leaving the cheque " with a female " are rightly condemned by Halsbury, L.C., as irrelevant. It is also clear, as pointed out by Cockburn, C.J., that the case was "decided without refer- ence to estoppel." It appears to us unnecessary to rely on that technical doctrine as the ratio decidendi. The true ground appears to be that, rightly or wrongly, negligence was found as a fact against (/■) Lecture vi. 72 YOUNG r. GROTE FOLLOWED. Young, and was expressly negatived as against Grote. In Swan v. Nortli Britisli Australasian Co., 2 H. & C. 175, the decision in Young v. Grote is freely commented upon, and Cockburn, C.J., explains that the decision may have been with the object to pre- vent circuity of action. Young could sue Grote for wrongfully paying the enlarged amount, and Grote could sue Young for the loss sustained by the latter's negligence. In Halifax Union v. Wheelwright, 32 L. T. 802, it was held that a bank manager who acted as treasurer to the plaintiff corporation, and who had paid drafts drawn on him and fraudulently altered by a person in the employ of the corporation, could defend such payments on the ground that the care- lessness of the corporation in signing the drafts, drawn so as to be easily capable of alteration by the person who wrote out the drafts, had led to the drafts being paid. The defendant had also paid some drafts with forged indorsements, and it was held that he was not a banker within s. 19 of 16 & 17 Vict. c. 59, to which s. 60 of the present Act corresponds- However, in the peculiar circumstances of the case, he was held not liable for the amount of such payments, as the only receipt by him was the receipt of the bank of which he was manager, and THE TRUE RATIO DECIDENDI. 73 where the plaintiffs practically had the account in respect of which he was treasurer, and the bank being discharged under s. 19, he could not be made liable. The principle upon which, as we think, Young v. Grote rests, that " a man cannot complain of the consequences of his own default against a person who was misled by that default without any fault of his own," was approved in the judgment of Cleasby, B., in the Court of Exchequer ; and in Orr v. Union Bank of Scotland, 1 Macq. 513, Lord Cranworth, in commenting on Young v. Grote, said (at p. 523) : " The decision went on the ground that it was by the fault of the customer the bank had been deceived. Whether the conclusion in point of fact was in that case well warranted is not important to consider. The principle is a sound one that where a customer's neglect of due caution has caused his bankers to make a payment on a forged order he shall not set up against them the invalidity of a document which he has induced them to act upon as genuine." In Scholfield v. Londesboroagh there was some conflict of opinion as to whether the respondent had been negligent. Lopes, L.J., in the Court of Appeal thought he had. Charles, J., who tried the case at first instance, found on the facts that he had not been negligent. 74 NEGLIGENCE A QUESTION OF FACT. But both were agreed as to the general duty of an acceptor of a bill "not to be negligent with regard to the form of the instrument," contrary to the opinion of Esher, M.E., and Rigby, L.J. The House of Lords inclined to the view that he had not been negligent. Halsbury, L.C., at p. 522, said : "I entirely concur that it . . . was wrong to contend that it is negligence to sign a negotiable instrument so that somebody else can tamper with it." Lord Watson (at pp. 541, 542) expressed a similar view. So far as the decision in Young v. Grote turned on the relation of banker and customer, the House of Lords does not expressly condemn it in Scholfield v. Londcsborovfih. (See Lord Davey at p. 550; Lord Morris, p. 547 ; and Lord Shand, p. 548.) In Marcussen v. Birkbeck Bank (5 T. L. E. 179, 4G3, and 646, Journal XI. p. 403, on the new trial only), it was held that the defence that the drawer's negligence in drawing the cheque had misled the banker into paying the amount as altered ought to have been properly put before the jury, and that it was not, and that there must be a new trial. On the new trial, Mathew, J., directed the jury that if a cheque was so carelessly drawn as to expose a banker, using reasonable care, to the risk of paying what was not intended, the banker was not liable. (Journal XI. p. 403.) NEGLIGENCE A QUESTION OF FACT. 75 This trial was previous to Scholfield v. Londes- borough . The latest decision on the point is contained in the decision of the Privy Council in the Imperial Bank of Canada v. Bank of Hamilton, 1903, A. C. 49. In that case a cheque was drawn for 5 dollars, and was certified hy the drawee bank as good. The drawer then altered the amount to 500 dollars, and paid it into his newly-opened account at the appel- lants' bank. The respondents paid the cheque to the appellants without looking at their books, the cheque bearing the bank stamp as certified. It was held that they were entitled to recover the amount so paid. There was no doubt that the condition of the cheque when certified afforded opportunity for the fraudulent alteration. Lord Lindley said : "If the principle laid down in Young v. Grote could still be acted upon, the Bank of Hamilton . . . would be estopped from denying that the cheque was a certified one for 500 dollars. But after the decision in the House of Lords in Scholfield v. Londesborough, it was hopeless to contend that . . . the bank was not at liberty to prove that the cheque had been fraudu- lently altered after it had been certified." It was further held that the payment of a certified cheque without reference to the books was not negligence. 70 CANCELLATION OF CHEQUES. Another point as to notice of dishonour is dealt with elsewhere. Now it is to be observed that the justification of Young v. Grote rests upon a supposed legal duty on the customer to draw cheques with reasonable care. His neglect as between him and the banker will cause any resulting loss to fall on him. Now in this Privy Council case the question of the duty of drawer to banker does not arise. It is a question of the duty of a banker to a holder for value, and the Court merely follows Scholfield v. Londesborough in deciding that the signing (to which the stamping here corresponded) of a bill, so filled up as to be capable of fraudulent alteration, is not negligence which can raise an estoppel. Where trustees under a paving act signed cheques, which had been drawn by the clerk to the clerk to the trust in such a manner as to be capable of altera- tion, it was held that they could not charge the clerk to the trust with negligence, if the cheques were altered, nor with his clerk's misconduct in altering them, for it was their duty not to sign cheques so drawn. (Whitmore v. Wilks, 3 Car. & P. 364). 55. — When a cheque is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the cheque is discharged (d). (d) If bankers pay a cancelled cheque drawn by a customer under circumstances which ought to hare excited their suspicions CANCELLATION OF CHEQUES. 77 In like manner any party liable on a cheque may be discharged by the intentional cancellation of his signa- ture by the holder or his agent. In such case any indorser who would have had a right or recourse against the party whose signature is cancelled is also discharged. A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative ; but where a cheque or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority. (S. 63.) This section is of little practical importance as regards cheques. It is not the practice to have many indorsements on a cheque, nor to look to the indorsers for payment. However, their legal position is like that of indorsers of a bill, and it is quite possible to release any one by cancellation of his name. As to the right of a banker to return a cheque, cancelled by mistake under the impression that it was to be paid, see Fernandez v. Glynn, 1 Camp. 426, ». 56. — Where a cheque is materially altered without and induced them to make inquiries before paying it, they cannot take credit for the amount. (Scholey v. Ramsliottom, 2 Camp. 485.) 78 MATERIAL ALTERATION the assent of all parties liable on the cheque, the cheque is avoided, except as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers. Provided that where a cheque has been materially altered, but the alteration is not apparent, and the cheque is in the hands of a holder in due course, such holder may avail himself of the cheque as if it had not been altered, and may enforce payment of it according to its original tenor. (S. 64 (1).) The latter part of this sub- section covers the case of Scltuljield v. Londesborough, 1896, A. C. p. 514, but it must be remembered that that decision turned on the fact that Londesborough had not been negligent. If a case like Young v. Grote, 4 Bing. 253, should arise to-morrow, and negligence were found as a fact against the customer, we do not think he could, as against his banker, rely on the words " according to its original tenor," if the banker without negligence had paid the cheque as altered. 57. — In particular the following alterations are material, namely, any alteration of the date, the sum payable, the crossing, and the branch at which the cheque is payable. (SS. 64 (2) and 76.) The word " apparent " was in Leeds Bank v. Walker, L. R. 11 Q. B. D. 84, construed to mean ILLUSTRATIONS. 79 " apparent to the bank, though not perhaps to an ordinary person," but this construction was not necessary to the judgment, which was that the latter part of s. 64 (1) did not apply to a Bank of England note. To alter the date of a cheque to a subsequent date is a material alteration within this section. (Cf. Vance v. Lowther, 1 Ex. Div. 176.) For a more exhaustive list of material alterations, the reader is referred to Chalmers' notes to this section and to Byles, Chap. XXI. To forge or alter or knowingly utter, etc., any cheque or any indorsement or assignment of any cheque is a felony punishable with penal servitude for life. (24 & 25 Vict. c. 98, s. 22.) To draw, sign or indorse a cheque without authority, or knowingly utter such a cheque, is a felony punishable with penal servitude for fourteen years. (24 & 25 Vict. c. 98, s. 23.) ( 80 ) CHAPTER VII. FORGED SIGNATURES — WHEN THE BANKER IS PRO- TECTED ESTOPPEL WHEN THE DRAWER IS PRECLUDED FROM DENYING THE GENUINENESS OF A SIGNATURE. 58. — S. 24 of the Act provides that — Subject to the provisions of this Act, where a signa- ture on a bill is forged or placed thereon without the authority of the person whose signature it purports to be, the forged or unauthorized signature is wholly inoperative, and no right to retain the bill or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority. Provided that nothing in this section shall affect the ratification of an unauthorized signature not amounting to a forgery. The word " cheque " should be read here for the FICTITIOUS PAYEE AND FORGERY. 81 word "bill." It seemed better to cite the original section in this instance. When the " forged or unauthorized signature " is in fact unnecessary to negotiate or pass a title to the cheque, as in the case of a " bearer " cheque, a holder for value can acquire a good title, and is not liable to the drawer or any other party, if he obtains payment of the cheque, since his title cannot be affected by the signature, delivery without indorsement conferring it. (Cf. Sweeney v. Freedman, 35 Ir. L. T. 187.) The great case on this section was Bank of England v. Vagliano, 1891, A. C. 107, on a bill of exchange, which was a forgery throughout, the drawer's signature, the name and indorsement of the payees all being forged. The name of the payees was not a name of fictitious persons : there were in fact such persons, but their name had been inserted in a bill, which was a fiction throughout, and it was held that the bill was payable to fictitious persons (a) within s. 7 (3), and so was payable to bearer. It was followed in Clutton v. Attenborough, 1897, A. C. 90. Clutton's clerk procured by fraudulent represen- tations cheques to be drawn by Clutton in favour of a fictitious person " G. B." (The payees in Vagliano's Case were real persons, though not real («) See § 12 in Chapter II. L.C. 6 82 GLUTTON V. ATTEN BOROUGH. payees, a point unsuccessfully raised by Russell, Q.C., for the acceptor, Vagliano.) The clerk indorsed the cheques " G. B." and negotiated them to Attenborough. It was held that the cheques were drawn payable to " a ficti- tious or non-existing person " within s. 7 (1), and accordingly were rightly treated as payable to bearer, and that it was immaterial that Clutton, when he so drew the cheques, believed there was such a person as G. B., and accordingly Clutton could not recover from Attenborough the amount of the cheques paid to Attenborough by the bank on which they were drawn. Lord Bramwell and Lord Field dissented in Vagliano' s Case, the former with characteristic vigour and frankness. But Clutton v. Attenborough is not so strong a case. The payee there was an absolutely non-existing person ; in Vagliano's Case, the payees were a well-known firm, who could only be described as " fictitious persons " by a straining of language. They were so considered because the bill was a fiction throughout. It was as if the forger had opened a directory and put down the first name he came across. (Cf. Halsbury, L.C., at p. 121.) 59. — When a cheque is drawn on a banker, and the banker on whom it is drawn pays in good faith and in PROTECTION TO BANKER PAYING FORGED CHEQUE. 83 the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the cheque in due course, although such indorsement has been forged or made without authority. (S. 60.) (Cf. Hare v. Copeland, 13 Ir. C. L. E. 426.) This is the chief of the provisions excepted in s. 24. The section does not cover the case of a person receiving payment on a forged indorsement (cf. Ofjden v. Benas, 43 L. J. C. P. 259), or a banker paying on a forged drawer's signature. (Cf. Orr v. Union Bank of Scotland, 1 Macq. 513.) The payment must be "in the ordinary course of business." A bank paying a crossed cheque in contravention of the crossing could not rely on this section. (Cf. Smith v. Union Bank, L. E. 10 Q. B. at p. 296.) Charles v. Blackwell (1 C. P. D. 548, 2 C. P. D. 151) was on 16 & 17 Vict. c. 59, s. 19, and it was decided that a banker was protected, who paid the amount of a cheque to an agent, who without any authority so to do, indorsed it " per pro." and kept the proceeds. The loss fell on his principal. S. 60 undoubtedly covers such a case. Under s. 19 of 16 & 17 Vict. c. 59, bankers may 6—2 84 ESTOPPEL BY CONDUCT. be protected who pay on forged indorsements in the case of instruments falling outside the Act. A banker's draft, for example, though not within the Act, comes within s. 19, which includes " any draft or order upon a banker for a sum of money payable to order on demand." (Gordon v. London City and Midland Bank, 1903, A. C. 240.) So also would a cheque with a receipt form attached as in J. Bavins, Junr. v. London and South-Western Bank (5 Com. Cas. 1). Ss. 54 and 55 contain further exceptions to s. 24. The material provisions of these have been set out in Chapter II., § 5 and § 16 (b) and (c). Ss. 80 and 82 (set out in Chapter V., §§49 and 51) protect a banker on whom a crossed cheque is drawn, and the banker who collects such cheque respectively. 60. — A customer of a banker, who by his conduct has led the banker to believe that the signatures of any cheques purporting to be drawn by him are his, whereby the banker has been induced to pay such cheques and has paid them without negligence, may be precluded from denying against such banker the genuineness of such signature. This is on the ground of estoppel. The leading case on this species of estoppel is M'Kenzie v. British Linen Co., 6 A. C. 82. The material facts WHAT AMOUNTS TO ESTOPPEL. 85 in that case were : A bill purporting to be drawn by M. and indorsed by him to the respondent bank was discounted by the bank for C, who signed as acceptor. On dishonour, notice was sent to M., reaching him late on Saturday, April 12th. On the 14th, the next business day, C. brought the bank a fresh bill, drawn and accepted as before, for a smaller sum, the bank accepting it as a renewal on receiving the difference in cash. On July 14th the bank gave M. notice that the second bill was due on the 17th. On dishonour, the bank gave notice and wrote again to M. on July 25th. On the 29th M. first informed the bank that his signatures to the bill were forged and that he declined to pay. It was held that as M. could not, " with the utmost diligence," have informed the bank of the forgery of the first bill before the second was uttered to it, and as M.'s first intima- tion of the second bill was the notice of its dishonour, his neglect for fourteen days to inform the bank of the forgeries did not in fact prejudice the bank, inasmuch as no remedy was lost or money advanced in consequence of M.'s silence. If M. had maintained silence at a time when he had reason to believe the acceptor would be allowed to draw against the second bill, he would have been estopped. Where a customer, whose account was debited 86 WHAT AMOUNTS TO ESTOPPEL. with forged cheques, refrained from informing the bank, in reliance on the statement of its agent that his silence would be in the bank's interest, it was held he was not estopped from afterwards setting up the forgeries. "It is obvious," said Lord Watson, in delivering the judgment of the Court, " that the question of estoppel . . . differs widely from the question in M'Kenzie v. British Linen Co. and similar cases. The ground on which the plea of estoppel rested in these cases was the fact that the customer, being in exclusive knowledge of the forgery, withheld that knowledge from the bank until its chance of recovering from the forger had been materially prejudiced. Here an agent of the bank had earlier and better information as to the forgeries than the customer himself." (Ogilvie v. West Australian, etc., Corp., Ltd., 1898, A. C. 257, at p. 268.) The customer's silence was found, as a fact, to have been honest. In Cliatterton v. London and County Bank (Journal XL, 333), Day, J., advised the jury that the plaintiff should suffer the loss incurred by repeated alleged forgeries by his clerk. The pass book, containing in its pocket the alleged forged cheques, had been sent weekly to the plaintiff, who failed to notif} 7 the bank of any irregularity, whereby it was induced to go on paying the cheques with the alleged forged signatures. The jury, however, WHAT AMOUNTS TO ESTOPPEL. 87 found that the signatures were not forgeries, and though they also found that plaintiff's conduct contributed to the loss, judgment must have been for the defendants in any case on the first finding. Negligence to amount to an estoppel must be in the transaction itself and be the proximate cause of leading the party astray, who seeks to set up the estoppel. It must be a neglect of some duty owing to such party or to the general public. (Arnold v. Cheque Bank ; Arnold v. City Bank, 45 L. J. C. P. 562.) Negligence in the custody of a cheque or in its transmission by post will not estop the true owner from recovering its proceeds from one who has wrongfully obtained possession of it (same cases and Patent Safety Gun Cotton Co. v. Wilson, 49 L. J. C. P. 713), for such negligence & not in the transaction itself, but collateral to it. ( *8 ) CHAPTER VIII. OVERDUE CHEQUES STALE CHEQUES — POST-DATED CHEQUES — CHEQUES NOT DATED — PRESENTMENT FOR PAYMENT — DISHONOURED CHEQUES — WHEN NOTICE OF DISHONOUR IS NECESSARY — WHEN A BANKER MUST DISHONOUR A CHEQUE — CHEQUES DRAWN WITH NO EFFECTS WHEN PROPERTY PASSES IN CONSIDERATION OF SUCH CHEQUES — WHEN GIVING SUCH CHEQUES IS CRIMINAL. 61. — A cheque is overdue when it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact. (S. 36 (3), S. 73.) There are no decisions on overdue cheques since the Act. In Down v. Hailing, 4 B. & C. 330, Bayley, J., at p. 333, points out that cheques being intended for immediate payment and not for circulation ought to be presented on the same or the following day. Here six days had elapsed. " This is, therefore, just like the case of a bill taken after CONFLICTING CASES ON STALE CHEQUES. 89 it is clue, and the party taking it has no better title than the person from whom he took it." Holroyd, J., delivered a similar judgment, in the course of which he said: "This cheque must be considered in the same light as a bill taken after it is due." His judgment thus concludes on p. 334 : " I think that when the defendants took the cheque more than a reasonable time for presenting it for payment had elapsed, and therefore they took it at their peril." In Boekm v. Sterling, 7 T. R. 423, Kenj'on, C.J., expressed the view that there was no difference between bills and cheques as regards the effect of their being overdue. In Rothschild v. Comey, 9 B. & C. 388, a cheque six days old was held not to be taken subject to equities, as no fixed rule could be laid down, and the direction of Tenterden, C.J., to the jury that they ought to consider whether the defendants took the cheques under circumstances that ought to have excited the suspicions of prudent men was approved. It was held that the rule applicable to bills could not be applied to cheques. (See Littledale, J., at p. 391.) But Lord Tenterden's remark on p. 390, "that it cannot be laid down as a matter of law, that a party taking a cheque after any fixed time from its date does so at his peril," seems no answer to the contention that it is a question of fact in 90 CONFLICTING CASES ON STALE CHEQUES. each case whether a cheque has been in circulation for more than a reasonable length of time. Down v. Hailing, though cited at the bar, is overlooked in the judgment, although both the Chief Justice and Bayley, J. were also parties to that decision. In Ex parte Hughes, 43 L. T. 577, the Chief Judge seems to fluctuate between the two views. Both Down v. Hailing and Rothschild v. Corney were cited before him, but he does not notice their discrepancy, and he proceeds to say, inter alia .- " Unless I can persuade myself that William Hughes took the cheques bond fide, having made such inquiries as a prudent man would make, a case of common law rights must necessarily arise as to whether the equities which exist with respect to overdue bills are intended in these cases to be applicable for actual overdue cheques or not." But " the equities, which exist with respect to overdue bills," are that when a bill is overdue — and the test of this is, in the case of a demand draft, whether it has been in circulation for an unreason- able length of time — it is not negotiable, and the taker takes it subject to the transferor's defects of title. If, therefore, this rule applies to cheques, it was needless to inquire whether W. Hughes took with or without inquiry. If it does not, then consider- ing whether W. Hughes took with or without HAS THE ACT AFFECTED THE LAWS? 91 inquiry could not be a preliminary to considering whether " the equities, which exist with respect to overdue bills," are applicable to cheques. In Serrell v. Derbyshire Railway Co., 9 C. B. 811, Maule, J., was inclined to think that a stale cheque (two months old) was on the same footing as an overdue bill, but it was not necessary to decide this point. In London and County Bank v. Groome, 8 Q. B. D. 288, the previous decisions are reviewed by Field, J., who points out that bills, payable at a future date, are negotiated before maturity, unlike cheques payable on demand. The negotiation of a bill after maturity is therefore in itself a circum- stance to excite suspicion. He regards Down v. Hailing (sujyra) as laying down no general rule, and, relying on a passage in Holroyd, J. 's, judgment in which he said, " Now in this case the cheque had been due five days at the time when it was taken by the defendants ; that was a circumstance which ought to have excited their suspicions," he thinks the question for the jury is — "Was the cheque taken under such circumstances as ought to have excited suspicion? " and he therefore held that the plaintiff, who took a cheque eight days after date, took free from defects of title affecting the transferor and could recover. If, therefore, the question were still one of case 92 HAS THE ACT AFFECTED THE LAW? law merely, there would be considerable difficulty in overcoming the view that the question for the jury ought to be, as was suggested in Rothschild v. Comcy, and London and County Bank v. Groomc, "Was the cheque taken under such circumstances as ought to have excited suspicion ? " But looking at the very plain provisions of ss. 36 (2) and (3), and 73, it is difficult to resist the conclusion that the Act has placed cheques on the same footing as bills if they were not so before. In some respects the Act, though an Act to codify the law, has modified it ; for instance, it has by s. 74 modified the extent to which a drawer is discharged by the failure to present a cheque within a reasonable time. And so here it appears to have restored the law to what it was as established by Down v. Hailing, and to have deprived the later cases of authority, except in so far as they may be of value on the question of what is in point of fact a reasonable time for a cheque to be in circulation. It is clear that the way in which the case is left to the jury as one of " reasonable time " or as one of " suspicious circumstances " may have an all- important effect upon the verdict and consequent judgment. In the words of Chalmers, "The cases decided before the Act are only law in so far as they can be shown to be correct and logical deductions from the general propositions of the Act." It is AN OVERDUE CHEQUE NOT NEGOTIABLE. 93 singular, therefore, that he cites Groome's Case without any comment as illustrative of s. 36 (3), and Byles (ed. 16, p. 23) treats it as illustrative merely of what has been held a " reasonable time." In the latest edition of " Leake on Contracts," it is cited to show that cheques in this respect differ from bills, and it is also one of the cases in Paget's " Decisions affecting Bankers," with, however, a footnote referring to s. 36 (3). In the author's view, whatever may have been the correct interpretation of Down v. Hailing, the proper question for the jury now is — "Was the cheque taken after more than a reasonable time had elapsed since issue ? " Demand bills other than cheques being in little use in England, cheques are virtually the only form of instrument to which s. 36 (3) can apply, since bankers' drafts are not instruments within the Act. 62. — Where an overdue cheque is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had. (S. 36 (2).) The words " affecting it at its maturity," in the case of a cheque, mean affecting it on the day it is drawn or issued, or between then and the nego- tiation in question, since a cheque is payable on 94 POSTDATED CHEQUE VALID. demand. In the case of bills not so payable, it is possible for a defect of title to be cured by negotiation to a holder in due course before the bill matures. (Cf. Chalmers v. Lanion, 1 Camp. 383.) We have considered the cases in the notes to § 61. An overdue cheque ceases therefore to be " negotiable," though it is still " transferable." 63. — Where a cheque or any indorsement on a cheque is dated, the date is, unless the contrary be proved, to be deemed to be the true date of the drawing or indorse- ment as the case may be. (S. 13 (1).) It is not the practice to date the indorsements on cheques. It might be material to show the order of the indorsements. 64. — A cheque is not invalid by reason only that it is ante-dated or (b) post-dated, or that it bears date on a Sunday. (S. 13 (2).) It is now definitely decided that a post-dated cheque is a valid instrument under s. 13 (2), and it is not taken out of the general provisions of the Act and of this particular sub-section by being post-dated, contrary to the tenor of the first part of s. 73. In Royal Bank of Scotland v. Tottenham, (1894) (5) If it is considered of any use to object to a cheque on the ground of its being post-dated, such a defence need not be pleaded. See Field v. Woods, 8 C. & P. 52, but we conceive that such an objection would now be useless. THE STAMP ACT AND S. 13 (2). 95 2 Q. B. 715, the infant payee of a post-dated cheque indorsed it before the day of date to M., who paid it into her account, and drew against it. It was dishonoured on presentment. Her bankers successfully sued the drawer, as holders in due course. Various contentions were raised by the drawer, which have been dealt with elsewhere. Before Wills, J., at the trial it was unsuccessfully argued that (1) an indorsement of a post-dated cheque, before the cheque is due, is inoperative, as it is till then an inchoate instrument and in suspense ; (2) such a cheque, not being payable on demand, is not an instrument within the Bills of Exchange Act, in view of s. 73, and an infant could not therefore validly indorse it under s. 22. In the Court of Appeal several points were taken. The material one for our present purpose was on s. 38 of the Stamp Act (54 & 55 Vict. c. 39). It provides that " Every person who issues, indorses, transfers, negotiates, presents for payment, or pays any bill of exchange or promissory note liable to duty and not being duly stamped, shall incur a fine of ten pounds, and the person who takes or receives any such bill or note either in payment or as a security, or by purchase or otherwise, shall not be entitled to recover thereon, or to make the same available for any purpose whatever." It was argued that a post-dated cheque was really 90 OTHER CASES ON POST-DATED CHEQUES. a bill at as many days as intervened between the date of issue and the date of the cheque, and that it consequently required the same ad valorem stamp as a bill for a like amount not payable on demand, that the cheque in question was not so stamped and could not under the latter part of the first sub- section of s. 38 be sued upon. The Court of Appeal decided that such a con- struction would make a post-dated cheque practically invalid, contrary to s. 13 (2) of the Bills of Exchange Act, and was untenable, and that all objections under the Stamp Act must be determined by the conditions existing when the question is raised. The cheque being on the face of it sufficiently stamped at the date of trial was therefore pro- perly admissible in evidence and could be recovered upon. It is conceived, however, that to post-date a cheque may expose the drawer to a penalty under s. 5 or s. 38 of the Stamp Act. (See Chalmers, p. 352.) It is virtually a fraud on the Revenue Cheques might be made payable " on demand " at a date three or six months hence, and so avoid the higher duty. A cheque dated 7th June, running " Pay on the 10th June," requires a bill stamp, and matures on June 13th. In Forsterv. Mackreth, L.E. 2 C. P. 163, a partner in a firm of solicitors had authority to draw cheques POST-DATED CHEQUES. 97 in the firm's name. He drew a cheque post-dated seven days. An authority to draw bills on behalf of a firm is not an incident of an ordinary, non- trading partnership, such as a firm of solicitors. It was held that the post-dated cheque, given to secure a personal loan, was in reality a bill at seven days, and the firm was not liable thereon to a holder in due course, as the partner had no authority to draw bills in the firm's name. The (c) validity of a post-dated cheque had been decided in Gatty v. Fry, 1877, 2 Ex. Div. 265, before the present Stamp Act or Bills of Exchange Act. Where the payee of a cheque, which is post- dated, becomes bankrupt between the day of receiving the cheque and the day of date, and notice thereof is sent to the drawer, there is no obligation on the drawer to stop payment of such cheque for the benefit of the payee's (d) creditors. {Ex parte Richdale, 19 Ch. D. 409.) It might have meantime been negotiated to a holder in due course, (e) Cf. also Whistler v. Forster, 14 C. B. N. S. 248 ; Williams v. Jarrett, 5 B. & Ad. 32 ; Austin v. Bunyard, 6 B. & S. 687 ; Bull v. 0' Sullivan, 40 L. J. Q. B. 141 ; Misa v. Carrie, 45 L. J. Q. B. 852 ; Hitchcock v. Edwards, 60 L. T. 636 ; Emanuel v. Rolarts, 9 B. & S. 121. (rf) Where a garnishee order is served upon the drawer of a cheque between the giving of a cheque for value and the payment thereof, there is no obligation on him to stop payment. (Elwell v. Jackson, 1 Cab. & E. 362.) L.C. 7 98 PRESENTMENT FOR PAYMENT. to an action by whom the drawer would by stopping payment expose himself. For another point decided by this case the reader is referred back to § 23. 65. — Subject to the provisions of the Act a cheque must be duly presented for payment. If it be not so presented the indorsers shall be discharged, and the drawer shall be discharged to the extent provided in rule (2) hereunder. A cheque is duly presented which is presented in accordance with the following rules : Subject to rule (2) failure to present within a reasonable time does not discharge the drawer of a cheque, as it does the drawer of a bill. (Cf. Robinson v. Haivksford, 9 Q. B. 52.) He can be sued at any time within six years. (Cf. Laws v. Rand, 3 C. B. N. S. 442, a case under the old common law rule, by which, if the drawer had suffered at all by the delay (e), he was discharged, but otherwise remained liable for six years.) (1) As regards the indorser, presentment must be made within a reasonable time after its indorsement in order to render the indorser liable. (S. 45 (2).) (2) As regards the drawer, where a cheque is not presented for payment within a reasonable time of its issue, and the drawer or the person on whose account («) See Hopkins v. Ware, 38 L. J. Ex. 147. TIME FOR PRESENTMENT. 99 it is drawn had the right at the time of such present- ment 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. (S. 74 (1).) (3) 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. (S. 74 (2).) (4) Presentment must be made by the holder or by some person authorised to receive payment on his behalf at a reasonable hour on a business day at the bank whereon the cheque is drawn. (Cf. S. 45 (3).) The cases prior to the Act establish the following rules as to time within which presentment must be made. Their value is in some cases doubtful, as the effect of s. 74 may be to introduce " a new and less rigorous measure of reasonable time." (Chalmers.) Four of these rules are borrowed from Chalmers, namely, 1, 2, 3 and 5. (1) If the person who receives a cheque and the banker on whom it is drawn are in the same place, the cheque must, in the absence of (/) special circumstances, be presented for payment on the (/) E.g., illness of payee, as in Firth v. Brooks, 4 L. T. N. S. 467. 7-2 100 EFFECT OF CASES BEFORE THE ACT. day after it is received. (Firth v. Brooks, 4 L. T. N. S. 467 ; Alexander v. Burclifield, 7 M. & Gr. 1061 (g).) And if crossed it must still be presented on the day after it is received, if received in time for payment into the holder's bank on the day of receipt. (Alexander v. Burclifield, supra, but this was before crossing received legislative sanction, and is now of doubtful authority.) (2) If the person who receives a cheque and the banker on whom it is drawn are in different places, the cheque must, in the absence of special circum- stances, be forwarded for presentment on the day after it is received, and the agent to whom it is forwarded must, in like manner, present it, or forward it on the day after he receives it. (Hare v. Henty, 10 C. B. N. S. 65 ; Prideaux v. Criddle, 10 B. & S. 515.) (3) In computing time non-business days must be excluded, and when a cheque is crossed any delay caused by presenting the cheque pursuant to the crossing is probably excused. (Cf. Alexander v. Burclifield, 7 M. & Gr. 1061, and Springfield v. Lanezzari, 16 L. T. 361.) (4) Any delay caused by the cheque having to (