A STOPPED CHEQUE

New Zealand Times, Volume XXXVIII, Issue 8733, 15 May 1914, Page 6

A STOPPED CHEQUE

INTERESTING CLAIM FOR RE r FUND. Press Association. AUCKLAND, May 14. A judgment of considerable interest to- the commercial community was given by Mr Frazer, S.M., this morning in a case John Kelly y. G. Carey, relating to the liability of persons concerned in the negotiation of a stopped cheque. A cheque for £3 was drawn by Carey on the National Bank on October 7th, 1912. After writing it out Carey put it in his pocket and went to keep an appointment with a man to whom he owed £3. and for whom the cheque was intended. On the way to keep the appointment

Carey either lost the cheque or it was stolen from him. Next morning ho went to the bank and stopped the cheque. Nothing more was heard or seen of, the cheque until about November 18th, when a man who was not (mown and could not bo identified- requested that the cheque should be cashed by the licensee of the Imperial Hotel —-John Kelly. The licensee, not seeing anything suspicious about the cheque or the transaction, handed over £3. Three days later he presented the cheque for payment through his bank account and payment was refused. Carey refused to refund the money to Kelly tn the ground that the cheque had_ been lost by him, and had not been parted with knowingly by him. Kelly now sued for £3. After quoting the law on the subject, and pointing out the incompleteness of the authorities as to the liability of a person who draws a cheque and then stops payment, the Magistrate said that the cheque was drawn for a very small amount (that was readily cashable at any bank, hotel, or place of business), and was not presented to Kelly until six wdeks after date of drawing. An open cheque of the kind was not like an ordinary bill of exchange that passed from hand to hand for an indefinite period. The cheque was intended, as a matter of ordinary business, to be presented very promptly after its date, and it seemed to him that a lapse of six weeks in such circumstances as shown in the case-ren-dered the cheque stale. Kelly had accepted a cheque which was overdue at the time of its negotiation. Plaintiff would be nonsuited..