"NOT NEGOTIABLE” CHEQUE

Taranaki Daily News, 22 September 1931, Page 15

"NOT NEGOTIABLE” CHEQUE

ACCEPTED IN PAYMENT FOR CAR ENDEAVOUR TO RECOVER MADE. Another echo of the series of forgeries of cheques perpetrated by William lolnies ..-as heard at the Stratford Court yesterday when Alexander McMullian sued Francis X. Quinn, motor mechani of Hawera, for £l5 5s 6d. One of McMullian’s cheques was tendered to Quinn by Holmes in payment for a car. Quinn realised on the cheque through a Hawera motor firm, the cheque finally being debited to McMullian’s stock account. Plaintiff sought. to recover the amount. Mr. R. W. Tate, S.M., reserved judgment. Mr. A. Coleman' who appeared for McMullian, outlined the manner in which plaintiff, an extensive , stock dealer, used to issue cheques to his employees for the purchase of stock. Those cheques were marked “not negotiable” and were for the purchase of stock only. Either plaintiff signed the cheques and left the amount open for the buyer to fill in according to requirements or he woulu stamp .. the cheque with his name and leave it to the buyer to sign below the stamp. The cheque in question was one that had been stamped by McMullian and signed by Holmes. Evidence was given by McMullian, who admitted to Mr. St. L. Reeves, for defendant, that it was impossible for him to keep ..n accurate check on the purchases of stock, and that when Holmes reported that he had bought three cows from F. Quinn, Hawera, witness did not take special steps to verify the statement. He denied that he showed defendant a cheque marked “This cheque must be used for the purchase of stock only,” and led. defendant to believe that the cheque he had accepted in payment for the car had had that statement inscrib. L on it. Plaintiff did not know why there had been so ipuch delay in suing Quinn. Holmes originally had a car which was burned. After that it was arranged that Holmes should use a horse. Soon afterwards plaintiff cam to know that Holmes had tho use of a car which, Holmes had told him, belonged to a friend. As far as plaintiff knew Holmes was not the owner of the car and did not use it on plaintiff’s business. Re-examined by Mr. Coleman, McMullian said that when trouble first arose over the cheques be handed the cheques to his solicitor with instructions to take the necessary action. The solicitor had sued when it was suitable to do so and plaintiff himself did not know why Quinn’s case had been left to the last. About 15 people had been sued in connection with the cheques. In October, 1929, said Quinn, he was using an old car and he learned that there was a man named Holmes who wanted an old car. A meeting was effected on October 25j when Holmes said a car he had been using in his work had been burned. He wanted another, told witness who he was and gave the impression that he needed a car in his business. The sum of £l5 was agreed on as the purchase price of the car and Holm.s wrote out a cheque from a book. Witness, had experience of cheques and the one Holmes gave him appeared to be in order except for the “not negotiable,” and in business he had accepted “not negotiable” cheques before without any trouble. . Witness heard no more of the matter until December, 1930, when he was approached by McMullian, who told witness he was liable for the amount of the cheque as such cheques were to be taken in exchange only for stock. Plaintiff produced a cheque with the words “This cheque is in payment for stock only” on it but he remembered that the one he had accepted hau been of different issue and he could not recall that it had any special warning. McMullian told him that he could see the original in Stratford, but witness did not have an opportunity to go +'< Stratford. Basil J. Hair, who was manager of Dominion Motors, JTawera, at the time the car was sold, said Quinn paid the cheque into Dominion Motors’ account as part of the payment on another car that he was purchasing from the firm. There was nothing on the cheque to arouse witness’ suspicion, especially as it carried McMullian’s name. In his submission Mr. Reeves stated that the cheque accepted by defendant was a different form from those issued later and in connection with which McMullian had since been successful in recovering. Tae cheque in question certainly bore the words “stock account,” but Quinn had naturally supposed that if Holmes were buying a car for stock business the cost would be debited to a stock account. Mr. Reeves quoted authorities to show that where two in'noeent persons suffered through tho deception of a third the one innocent person who made the deception possible should suffer. “The whole essence of my case is that what McMullian handed to Holmes and what Vol me s handed to Quinn was a non-negotiable instrument,” said Mr. Coleman. Regarding the difference in the cheque as compared with others Mr. Coleman pointed out that in its previous decisions on similar eases the Court referred to the danger of a cheque crossed “not negotiable.” Quinn transferred the car to Holmes and watched Holmes write a cheque of plaintiff’s in payment. By telephone Quinn could have verified the' legality or otherwise of the transaction In a few minutes, but he had not and was guilty of culpable negligence.