Crossed Cheques - Definition - Law Dictionary Home Dictionary Definition crossed-cheques

Definition :

Crossed cheques. It is very usual for the drawer of a cheque to write across it, between two parallel lines, the name of the payee's banker, in which case the banker on whom the cheque is drawn should only pay to that banker; in other cases, as when the drawer is unaware of the payee's banker, it is usual for himto write merelythe words 'and Co.,' leaving it to the payee to add the ename of his banker if the payee so intends, or if the parallel lines are left in blank except of the words 'and Co.' the cheque canonly be paid by the Bank on whom it is drawn to or through a Bank. This serves as some security in case the cheque is lost, since it can only be paid through a banker, and moreover postpones in some measure the payment until the clearing hours in the afternoon. See Bills of Exchange Act, 1882 (45 & 46 Vict. c. 50), ss. 76-80; and (English) Bills of Exchange (Crossed Cheques) Act, 1906 (6 Edw. 7, c. 17) passed in consequence of Capital and Counties Bank v. Gordon, 1903 AC 240), bs. 1 of which a banker receives payment of a crossed cheque within the meaning of s. 82 of the Act of 1882 for a customer, notwithstanding that he credits his customer's account with the amount of the cheque before receiving payment thereof, though he incurs no liability to the true owner if the customer had notitle. As to the effect of adding the words 'a/c Payee,' see House Property Co. v. L.C. & W. Bank, (1915) 31 TLR 479. See also Bills of Exchange Act (1882) Amendment Act,1932 (22 & 23 Geo. 5, c. 44); Slingsby v. Westminster Bank Ltd., (1931) 1 KB 122, affirmed sub nom. Lloyds Bank Ltd. v. Savory & Co., 1933 AC 201; see also 'NOT NEGOTIABLE.'

If the lines are drawn simply, or if the words 'and company' or any abbreviation thereof are written with in them, with or without the addition in either case of words 'not negotiable', the cheque is said to be crossed generally; and in that case a holder who desires to receive payment of the cheque must present it through a banker, Halsbury's Laws of England, Vol. 3(1), para 211, p. 177.