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Cheque crossings


Payments of large sums of money are for obvious reasons normally effected by cheque rather than by cash and the payer will wish to take the maximum precautions against the possibility of the cheque falling into the wrong hands. A cheque made out as payable on demand could be cashed or negotiated by any person into whose hands it might accidentally fall. whether lost in transit or dishonestly obtained. To minimize such a possible loss it is customary to 'cross' the cheque. Historically the crossing, two parallel lines running transversely across the cheque, struck out the word 'on demand', thus denying the bank on which it was drawn the right to pay I it. Although those words no longer appear on cheques the crossing is still effected in the I same manner and is accepted as being an express instruction to the receiving banker that the monies arc to be paid into an account at that bank - the account being either that of the payee or, where the | cheque has been endorsed by the payee, into the account of the person presenting the cheque.

Additional precautions are also often taken. At one time the receiving bank was | designated between the crossing, though with the reduction in the number of banks this practice has disappeared. The words '&. Co.', written between the lines, are a relic of those days; this allowed the payee to put the j. me of his bank before '& Co.', thus making the general crossing specific. The most effective modern practice is to write the words 'not negotiable' between the lines. This has the defined legal effect of erasing the negotiability of the cheque. Although it can still lawfully be passed from one person to another, the person taking the cheque, whether or not in good faith, will never obtain a better title to the monies stated thereon than the person from whom he obtained it. This means that if the cheque were to be stolen the thief, having no good title to it, could not legally pass any title on and the true owner would be entiteled to recover his loss from any banker who paid out on it. However, the Cheque Acts do give certain protection to bankers acting in good faith and without negligence.

Another common crossing is the inclusion of the words 'account payee only' between the lines. Although this does not destroy the negotiability of the cheque, it does put the banker on the alert and there may well be prima facie negligence on his part should he pay out to, or credit, any other person than the named payee. A holder may cross an uncrossed cheque and/or add words to make a general crossing into a special crossing.


Reference: The Penguin Business Dictionary, 3rd edt.