was countermanded by the death of the drawer, but this section places a cheque payable to bearer in the same position as a draft payable to order, Rolls v. Pearce, 5 Chan. Div. 730. Crossed Cheques (a). (a.) Crossing of cheques was only introduced at the end of last century, and owed its origin to a practice of some of the private bankers in London who, in 1775, instituted the London Clearing-House as a means of economising their capital, as well as of saving much unnecessary trouble in the collection of cheques. Cheques paid into a bank were taken to the Clearing-House on the afternoon of the following day, and in order to facilitate business at the Clearing-House, and also to preserve a record of the channel through which the cheques came, the clerks of the several bankers were in the habit, at first, of writing and afterwards of stamping the names of their principals across the documents presented by them. The object of this crossing was to secure that, in the event of the cheque being dishonoured, it should at once be returned to the banker who presented it. The crossing, of course, also afforded a way of discovering the person by whom the cheque had been paid in, if a question afterwards arose as to the true ownership of it. The convenience of the system led to the other private bankers in London being admitted to the Clearing-House, and merchants then found that they did not require to provide for payment of such of their cheques as were presented through a bank until the afternoon of the day on which they were drawn; and in order to secure that all their cheques should be so presented, the practice grew up of writing the name of a banker across the cheque. Afterwards it became common, instead of writing the name of a banker, to cross the cheques with the words, "and Company," or "&Co.," generally between parallel lines, and sometimes. merely to draw two parallel lines across the face of the document. In the first case the cheque was said to be specially crossed, and the other forms were termed general crossings. Bankers paid attention to these crossings, and generally refused payment of cheques so crossed unless presented to them through a banker. It was then seen that a great protection was by § 75. § 75. this means afforded against the risk attending the loss or theft of a cheque, as an obstacle was put in the way of the thief or finder cashing it, and it was with the view of attaining this protection that the practice became common. The precise meaning of the custom, and the effect which would be given to it in law, however, remained long doubtful, and it was not until 1852, in the case of Bellamy v. Marjoribanks, 21 L. J., Ex. 70, that the questions regarding crossed cheques were fully discussed in a Court of Law. It is true that in the case of Stewart v. Lee, Moody Malkin, p. 158, the question came up, and Lord Tenderden, C. J., mentions the view which several of the special jurymen had stated in the course of the trial in regard to the extent of the custom, but two different views continued to prevail. According to some the effect of a crossing was that the crossing became part of the cheque, and that the banker was not entitled to pay the cheque otherwise than to the banker named, where the crossing was special, or to a banker where it was general, and at once became liable to the true owner of the cheque by disregarding the crossing. Others, again, held that a crossing formed no part of the instrument, and might be disregarded by the banker without his thereby incurring any responsibility. The first of these views approximated a crossing to an indorsement, and seemed to involve the absurdity that a cheque might be payable to bearer, and also not to bearer at the same time, while the other view deprived crossing of a great part of its value. The question in Bellamy v. Marjoribanks arose out of the following circumstances :—The plaintiffs, who were trustees, had opened an account for the purposes of the trust with Messrs. Coutts & Co., of which banking firm the defendants were the individual partners. In the course of a Chancery suit it became necessary to pay a sum of money into the account of the Accountant-General with the Bank of England. Geary, the agent for one of the parties to that suit, presented a cheque to the plaintiff's agent, which was signed by the plaintiffs, and returned after being crossed with the words "Bank of England for account of the Accountant-General." Geary drew his pen through this special crossing, leaving it legible, and crossed the cheque specially to his own bankers, who presented it and received payment from the defendants. Geary appropriated the money and became bankrupt. The plaintiffs sued Coutts & Co., holding that they were liable, on account of having paid contrary to the direction in the crossing, as interpreted by custom. A jury found that Coutts & Co. were guilty of negligence in paying the cheque to Geary's bankers in face of the special indorsement to the Bank of England, and that there was a custom and usage and consequent duty on Coutts & Co. not to pay the cheque, otherwise than into and through the hands of the Bank of England, but this verdict was set aside by the Court of Exchequer as contrary to evidence. The judgment of the Court was delivered by Baron Parke, who, after bolding that the weight of evidence was against the custom found by the jury, laid down that such a custom could not have been supported in law. He said: "The crossing a cheque could not operate as an. indorsement to a banker, whose name is used, because it was not written with any intent to transfer the property in the cheque to him, and it wants the essential part of an indorsement, delivery to the indorsee." From the form in which the question came up, the Court could not in precise terms declare what the custom really was, but they indicated an opinion that a crossing, whether special or general, merely amounted to a direction to the drawee not to pay otherwise than to a banker, but that, notwithstanding, he might pay the cheque across the counter to the bearer, although his doing so would be evidence of negligence in the event of its turning out that the holder had no title to the cheque. In other words, a crossing was not a direction which must be obeyed, but was a memorandum which had the effect of calling for vigilance on the part of the drawee. The drawee of a specially crossed cheque was not guilty of negligence in paying the cheque through another banker than the one named, because all that the custom was intended to secure was that crossed cheques should not be paid directly to the bearer, but indirectly through the intervention of a banker, and it was matter of indifference who that banker was. Still less could the substitution of one special crossing for another increase the responsibility of the drawee. N § 75. $ 75. The negotiability of cheques was left unimpaired by this decision, which was followed in the case of Carlon v. Ireland, 1856, 25 L. J., Q. B. 113, where it was held that crossing a cheque does not affect its negotiability, and that a person who received a cheque bona fide, and for value, was entitled to retain the amount received through his bankers, although they were not the bankers named in the crossing. When it was settled that crossing a cheque did not render it less negotiable, it followed that a failure to obey the direction given in the crossing was immaterial where the drawee had paid the cheque to the lawful holder, although through a wrong channel. Cheques, payable to bearer, and drafts payable to A. B. or order, when indorsed, pass from hand to hand like bank notes, and if they come into the possession of a holder for value, who is ignorant of the want of title in the transferor, the drawer is liable in an action on the cheque or draft. It is otherwise in the case of a draft the indorsation of which has been forged, because then the holder can never be a lawful holder, however great his bonâ fides, Bobbet v. Pinkett, L. R. 1, Ex. D. 368. At common law the banker was entitled to pay the bearer of a cheque without inquiry, and by statute he was protected from the consequences of paying a draft on a forged indorsation. The custom of crossing imposed caution upon him in the paying of crossed cheques and drafts, but if he disregarded the crossing he merely took on himself the risk that the person to whom he paid was not a lawful holder. It is thus clear that though a certain measure of protection was given by crossing, it was very far from being complete, and rather imposed difficulties in the way of the thief than gave security to the careless owner of cheques. In Scotland cheques rarely circulate from hand to hand, but are at once paid into the receiver's account. In that country, as a thief or finder would not readily get quit of the stolen or found cheque, the practice of crossing would have afforded a much greater degree of security than in England, where cheques are frequently transferred from one holder to another, but until the passing of the Act recognising the practice, crossing was rarely, if ever, practised, and certainly did not in Scotland form a custom. It was accordingly attempted to give additional security by passing the Act 19 & 20 Vict. c. 25. This Act provided that a special or general crossing should have "the force of a direction to the bankers upon whom a draft is made, that the same is to be payable only to or through some banker, and the same shall be payable only to or through some banker." This Act thus recognised the custom of crossing as it had been defined in Bellamy v. Marjoribanks-viz., that a payment to some banker was sufficient; but it also attempted to impose the duty upon the banker of paying in that way and in no other. A considerable step was thus taken towards settling the law. The custom had received legislative sanction, and no longer required to be proved. Further, the Act recognised the practice for all parts of the country, and prevented the growth of inconsistent customs in regard to so important a department of banking. The security given by the statute was, however, much overrated, as was shown in the case of Simmonds v. Taylor, 8th Dec. 1857, 27 L. J., C. P. 45. In that case a crossed cheque which had been lost was presented at the bank by the finder, or by some one on his behalf, and paid. The crossing had been so skilfully removed that a very minute examination would have been requisite in order to detect that the cheque had been tampered with. The drawer attempted to hold the banker responsible for having paid the cheque contrary to the direction in the crossing. The Court of Common Pleas held that he was not liable, and this judgment was confirmed on appeal in the Exchequer Chamber, 27 L. J., C. P. 248. Had the Judges rested their decision on the ground that the obliteration of the crossing in such a manner as to elude detection relieved the bankers, no alarm would have been felt, but opinions were expressed in regard to the legal nature and effect of a crossing, which seemed to deprive the practice even of the benefit which it conferred apart from statute. Justice Cresswell laid down that a crossing did not form part of the instrument; that its deletion was not forgery, and that as any holder of a cheque might cross a cheque, so any holder might delete the crossing which had been made by the drawer or a prior holder. If then the bank paid after the crossing § 75. |