Value of Grossed Cheques.

Manawatu Herald, 23 April 1892, Page 2

Value of Grossed Cheques.

To the general public, and even commercial circles, the exact measure of protection afforded by what is known as " crossing " a cheque and the responsibility attaching to persons negotiating such orders, appears (says the Sydney Homing Herald) not to be quite understood. A cheque is often "crossed" or drawn to " order," with a vague idea that some protection is thus afforded to the drawer ; but very few people know that the law gives absolute protection to the. person taking these precautions, A case in point ha 3 just come under our notice. A business firm of high standing in this city recently cashed a cheque drawn to "order " and " crossed.*' The cheque was passed through the bank, and it was afterwards discovered that it had been in wrong hands, and that the endorsement of the payee was a forgery. The drawer claimed that as he had taken all reasonable precautions by both " crossing " the cheque to " order " the loss must fall upon the firm cashing the cheque because the bona fides of the person representing himself as the payee were not ascertained as they might heve been. The case was sent for arbitration to a high legal authority, who has decided in favour of the drawer, and against the firm for cashing the cheque. It appears that there is a decision of the English Courts, which clearly fixes the responsibility of ascertaining the bona fides of the payee on the party paying in such cheque.