crossing on gence paid such cheque (a) if crossed generally to Effect of a banker, or (b) if crossed specially to the banker to drawer. whom it is crossed, or his agent for collection, being a banker the drawer is entitled to the same rights and to be placed in the same position as if the amount of the cheque had been paid to the true owner thereof.1 crossing on agent for Art. 269. A person who takes a cheque crossed Effect of generally or specially which bears also the words "not holder and negotiable" does not acquire and cannot give a better collection. title to the cheque than that which the person from whom he took it had.2 Exception.- A banker who has in good faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title to the cheque proves defective, incur any liability to the true owner of the cheque by reason only of having received such payment.3 ILLUSTRATION. A cheque payable to bearer and crossed generally and with the words" not negotiable" is stolen. The thief gets C., a tradesman, to cash it for him. C. acts bona fide in doing so. C. pays the cheque into his bankers, who present it and obtain payment. The banker who pays and the banker who receives payment are protected, but C. is liable to refund the money to the true owner. Again, assuming the cheque to have been stopped, C. cannot sue the drawer. NOTE. The words "not negotiable" in the Crossed Cheques Act mean merely "not fully negotiable." A cheque so crossed is in effect put on the same footing as an overdue bill (see Art. 134); no liability is imposed thereby on a banker who pays it without negligence. A holder who has a good title can still transfer it, and the transferee is entitled to receive payment, but where the title of the holder is defective a subsequent holder for value is deprived of Effect of the protection usually afforded to a bonâ fide holder for value crossing on without notice. holder and agent for collection. crossing as Art. 270. When a cheque is crossed generally the Effect of banker on whom it is drawn must not pay it otherwise than to a banker, and when a cheque is crossed specially the banker on whom it is drawn must not pay it otherwise than to the banker to whom it is crossed, or to his agent for collection, being a banker.1 Invisible crossing or oblitera. tion. If the banker on whom a crossed cheque is drawn pays it in good faith and without negligence as directed above he is entitled to the same rights and to be placed in the same position in all respects as if the amount of the cheque had been paid to and received by the true owner thereof.2 If he do not pay it, as directed above, he is liable to the true owner of the cheque for any loss such true owner may sustain owing to the cheque not having been so paid.3 NOTE.-There is no privity of contract between the holder of a cheque and the banker on whom it is drawn (Art. 210), therefore a banker incurs no liability to the holder by refusing to pay a crossed cheque. If he pay it in contravention of the directions of the crossing he is liable to the true owner for a breach of his statutory duty; and if he negligently or dishonestly pay it to a wrongful holder he may be liable to the true owner in an action of trover.* Exception. When a cheque is presented for payment which does not at the time of presentation appear to be crossed, or to have had a crossing which has been obliterated, or to have been added to or altered otherwise than as authorised by Art. 266, a banker paying the cheque in good faith and without 1 Crossed Cheques Act, 1876, 39 & 40 Vict. c. 81, §§ 7 and 10. 3 Id., § 10. 4 Cf. Smith v. Union Bank (1875), 10 L. R. Q. B. at 296, and 1 L. R. Q. B. D. at 35, as modified by the present Act. crossing or tion. negligence is not responsible, and does not incur any Invisible liability; nor can the payment be questioned by reason obliteraof the cheque having been crossed, or of the crossing having been obliterated, or having been altered or added to otherwise than as authorised by Art. 266, and of payment being made otherwise than pursuant to the directions of such crossing.1 139 & 40 Vict. c. 81, § 11; Cf. Art. 138. CHAPTER X. PROVISIONS PECULIAR TO PROMISSORY NOTES. [EXPLANATORY HEAD-NOTE.-The term "bill" in contradiction to "bill of exchange," as used in the articles of this digest, includes mutatis mutandis promissory note as well as bill of exchange, the maker of a promissory note corresponding with the acceptor of a bill of exchange. See Introd., p. iv., and head-note to Chapter I. In this chapter are collected the provisions which apply exclusively to promissory notes.] Note defined. Art. 271. A promissory note is an unconditional written promise, signed by the maker, to pay absolutely and at all events a sum certain in money, either to the bearer or to a person therein designated, or his order.1 NOTE.-See a promissory note compared with a bill of exchange by Lord Mansfield, and Parke, B., and cf. Art. 286 n. See also some points of difference between a bank note and an ordinary note referred to by Bramwell, B. Foreign Law.-The French law as io notes (billets à ordre), is contained in French Code de Coinmerce, Arts. 187, 188. Although the Code is silent on the point, it seems that notes payable to bearer (billets au porteur), are to some extert extent recognised, see Nouguier, §§ 1565-1578; German Exchange Law, Arts. 96-100, deals with notes. 1 Coleham v. Cooke (1742), Willes, 393 at 396, 397; Cf. Ferris v. Bond (1821) 4 B. & Ald. 679. 2 Heylyn v. Adamson (1758), 2 Burr. at 676. 3 Gibb v. Mather (1832), 2 Cr. & J. at 262-263, Ex. Ch. 4 Litchfield Union v. Greene (1857), 1 H. & N. at 889. Form and Interpretation. sary Art. 272. There must be two parties to a pro- Necesmissory note in its origin, and they must be different parties. persons, namely— (1.) The person who makes the promise, called the maker. (2.) The person in whose favour the promise is made, called the payee. Cf. Art. 2. Explanation.-A writing in the form of a note payable to maker's order is not a note, but by indorsement it becomes one.1 ILLUSTRATIONS. 1. B. makes a note payable to his own order, and indorses it in blank. This is a valid note payable to bearer,2 2. B. makes a note payable to his own order, and indorses it to C. This is a valid note payable to C. or order.3 3. B., C. and X. make a joint and several note payable to C. and X. or order. This is a valid note. C. and X. may sue B. on his several liability.* 4. B. & Co. make a note payable to C. & Co. or order. X. is a partner in both firms. C. & Co. cannot sue B. & Co. on this note. But if C. & Co. indorse the note, the indorsee could sue." the necessary. Art. 273. A promissory note is inchoate and Delivery incomplete until delivery thereof be made to payee. Note may Art. 274. A promissory note may be in any form of words which comply with the requisitions of Art. form of 1 Hooper v. Williams (1848), 2 Exch. 13. 2 Id.; Masters v. Baretto (1849), 8 C. B. 433. 3 Gay v. Lander (1848), 17 L. J. C. P. 286. 4 Beecham v. Smith (1858), E. B. & E. 442. 5 Lindley, 3rd ed., 219; Cf. Neale v. Turton (1827), 4 Bing. 149. Chapman v. Cottrell (1865), 3 H. & C. 857; Cf. Arts. 53-55, as to delivery. be in any words. |