79.-(1) Where a cheque is crossed specially to more SS. 79, 80. than one banker, except when crossed to an agent for collection being a banker, the banker on whom it is drawn shall refuse payment thereof (a).

Duties of banker as to crossed cheque.

Ind. Act, s. 127.

(2) Where the banker on whom a cheque is drawn Ind. Act, s. 129. which is so crossed, nevertheless pays the same, or pays a cheque crossed generally otherwise than to a banker, or if crossed specially otherwise than to the banker to whom it is crossed, or his agent for collection being a banker, he is liable to the true owner (b) of the cheque for any loss he may sustain owing to the cheque having been so paid.

Provided that where a cheque is presented for payment Ind. Act, s. 131. which does not at the time of presentment 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 this Act, the banker paying the cheque in good faith and without negligence shall not be responsible or incur any liability, nor shall the payment be questioned, by reason of the cheque having been crossed, or of the crossing having been obliterated or having been added to or altered otherwise than as authorised by this Act, and of payment having been made otherwise than to a banker, or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be (c).

(a) See note (e) to sect. 77.

(b) The definition of "holder in due course" given in sub-sect. (1) of sect. 29, would be applicable to the words "true owner," except that in this and the following sections, the true owner is ex hypothesi not the holder at the time. The word "crossed" in all these sections means lawfully crossed in accordance with the provisions of sect. 77, which see.

(c) This corresponds with the proviso to sect. 64 of this Act, as to non-apparent alterations.

80.-Where the banker on whom a crossed cheque is drawn (a) in good faith and without negligence, pays it, if crossed generally, to a banker, and if crossed specially, to the banker to whom it is crossed, or his agent for

Protection to drawer where cheque is

banker and

crossed.

SS. 80, 81, 82. collection being a banker, the banker paying the cheque (b) and, if the cheque has come into the hands of the payee (c), the drawer shall respectively be entitled to the same rights and be placed in the same position as if payment of the cheque had been made to the true owner

Protection to banker and drawer where cheque is crossed.

Ind. Act, s. 128. thereof (d).

Effect of cross

Ind. Act, s. 130.

(a) The wording of the first line of this section is not very accurate, as it would strictly only refer to a cheque that was issued crossed. But it is submitted that it must be taken generally to include any properly crossed cheque, no matter when crossed.

(b) The banker paying the cheque, if he complies with the provisions of this section, runs no risk.

(c) This means if it has at any time come into the hands of the payee, then the drawer is relieved of any liability. The drawer may be himself the payee, and if so, he runs no risk until the cheque passes out of his hands; and even then he incurs no liability, if the provisions of this section are complied with.

(d) As to the meaning of "true owner," see sect. 79, note (b) thereto.

81.—Where a person takes a crossed cheque which ing on holder. bears on it the words “not negotiable,” he shall not have and shall not be capable of giving a better title to the cheque than that which the person from whom he took it had (a).

Protection to collecting banker.

Ind. Act, s. 131.

(a) See note (c) to sect. 77 of this Act. The addition of the words "not negotiable" is very useful in transmitting cheques to bankers to be placed to the customer's account, and every cheque so sent should be so crossed.

82.-Where a banker in good faith and without negligence receives payment for a customer of a cheque crossed generally or specially to himself, and the customer has no title or a defective title thereto, the banker shall not incur any liability to the true owner of the cheque by reason only of having received such payment (a).

(a) By 16 & 17 Vict. c. 59, s. 19, the banker upon whom any draft or order payable to order on demand is drawn, is protected if he bona fide pays the cheque, though the indorsement is forged, and though the forged indorsement purports on its face to be made by an agent; see also Charles v. Blackwell, 2 C. P. D. at p. 157; 46 L. J. C. P. 368; 36 L. T. N. S. 195; 25 W. R. 472; but such banker is

S. 82.

Protection to collecting

liable if his customer's signature is forged, Ibid., 2 C. P. D., at p. 157.
This protection does not extend to any other than the banker upon
whom the cheque is drawn, Ogden v. Benas, L. R. 9 C. P. 513; 43
L. J. C. P. 259; Arnold v. Cheque Bank, 1 C. P. D. 578; see also banker.
note to sect. 74 of this Act under the head of "Forged Cheques."
Hence the banker who merely collected the proceeds for his customer
was liable to the true owner for the amount received. By this section,
which is substantially the same as sect. 12 of the Crossed Cheques Act,
1876, where a cheque is crossed generally, or specially to a banker, the
collecting banker is relieved of liability, leaving the law as it was
before if the cheque is uncrossed. The present (82nd) section em-
bodies the decision in Matthiessen v. London and County Bank,
5 C. P. D. 7. The "true owner "of a cheque so crossed must now
look, not to the collecting banker, but to the customer, or to the
person who has received payment of it. If, however, the bank has
done anything more than simply collect the proceeds, and credit the
customer's account with them, for example, if the bank has had the
cheque indorsed to it and has thereby made, or attempted to make,
itself the owner of it, the bank will be liable to the true owner for
the proceeds; ibid., at pp. 16, 17. It has been recently held that
where a customer pays a cheque (whether crossed or not) to his
bankers in order to have the amount placed to his credit, and the
bankers place the amount to his credit accordingly, the bankers
become immediately holders of the cheque for value, even though
the customer's account is not overdrawn, Ex parte Richdale, 19 Ch.
D. 409; 51 L. J. Ch. D. 462. A different opinion was expressed in
Scotland, if the account was not overdrawn, Clydesdale Bank v.
McLean, Court of Sess. Cas., 4th ser., vol. 10, 719, per Lord Shand, at
p. 724. Their liability as such holders, if the cheque is crossed, is
limited by this section.

PART IV.

S. 83.

Promissory note defined.

Ind. Act, s. 4.

Ind. Act, s. 11.

PROMISSORY NOTES.

83.—(1.) A promissory note (a) is an unconditional promise (b) in writing made by one person to another, signed by the maker, engaging to pay, on demand (c) or at a fixed or determinable future time (d), a sum certain (e) in money, to, or to the order of, a specified person (ƒ) or to bearer (g).

(2.) An instrument in the form of a note payable to maker's order is not a note within the meaning of this section, unless and until it is indorsed by the maker (h).

(3.) A note is not invalid by reason only that it contains also a pledge of collateral security with authority to sell or dispose thereof (j).

(4.) A note which is, or on the face of it purports to be, both made and payable within the British Islands, is an inland note (k). Any other note is a foreign note.

(a) As the different parts of this definition are very much the same as those in the definition of a bill of exchange in sect. 3, sub-sect. 1, the reader is referred to the notes to that section for additional matter.

(b) In Brown v. De Winton, 6 C. B. at p. 356, it is said that no precise form of words is requisite to constitute a promissory note; but it ought to have the essentials of a contract; see note (t) of sect. 3 of this Act. The question is whether it imports a promise, Brooks v. Elkins, 2 M. & W. 74. The promise to pay must be unconditional; if not, it is void; see sect. 3, sub-sect. 2, and the notes thereto. A promise to pay on the death of A. B., provided he leaves us sufficient to pay the said sum, or if we shall be otherwise able to pay it," is not a note, Roberts v. Peake, 1 Burr. 323. A promise to pay £50 “at such period of time that my circumstances will admit without detriment to myself or family," is not a note, Ex parte Tootell, 4 Ves. 372;

Beardsley v. Baldwin, 2 Stra. 1151. A promise to pay, "but if the agent does not sell enough in one year, one more is granted," is not a note, Miller v. Poage, 41 Amer. Rep. 82. "At 12 months date I promise to pay Messrs. R. F. & Co. £500, to be held by them as collateral security for any moneys now owing to them by B., which they may be unable to recover on realizing the securities they now hold, and others which may be placed in their hands by him,” is not a note, Robins v. May, 11 A. & E. 213; 3 Per. & D. 147; 3 Jur. 1188. A promise to pay a certain sum by instalments, but it was declared that "all installed payments thereupon from and after the decease of the plaintiff should cease," is not a note, Worley v. Harrison, 3 A. & E. 669. See Moffatt v. Edwards, Car. & M. 16; Dixon v. Nuttall, 1 C. M. & R. 307. Even if the contingency has happened, it is not a promissory note, see sect. 11, sub-sect. 2 and the notes thereto. If the event must inevitably happen, then the note is good, see sect. 11, sub-sect. 2, and the notes thereto; Colehan v. Cooke, Willes, 393, 2 Stra. 1217; Sackett v. Palmer, 25 Barb. 179. In Richards v. Richards, 2 B. & Ad. 447, at p. 454, the note was held good, as the contingency was not stated on the face of it. On the other hand, any words which amount in law to a promise to pay are sufficient, Morris v. Lee 2 Ld. Raymond, 1396; 1 Stra. 629; 8 Mod. 362. "Received of A. B. £100, which I promise to pay on demand with lawful interest," is a note, Green v. Davies, 4 B. & C. 235; Peto v. Reynolds, 9 Ex. 410; 23 L. J. Ex. 98; Lovell v. Hill, 6 C. & P. 238. "I promise to pay as per memorandum of agreement," is a note, and primâ facie not conditional, Jury v. Barker, E. B. & E. 459; 27 L. J. Q. B. 255. So, "borrowed of M. A., his sister, £14 in cash, as per loan, in promise of payment of which I am truly thankful for; it shall never be forgotten by me," is a good note; Ellis v. Mason, 7 Dowl. P. C. 598. So, “Į have received the imperfect books, which, together with the cash overpaid on the settlement of your account, amounts to £80, which sum I will pay you within two years," is good; Wheatley v. Williams, 1 M. & W. 533; “I. O. U. £85, to be paid May 5th," is good; Waithman v. Elsee, 1 C. & K. 35; Brooks v. Elkins, 2 M. & W. 74. ▲ mere memorandum, without any promise to pay, is not a note, Tomkins v. Ashby, 6 B. & C. 541; Clarke v. Percival, 2 B. & Ad, 660; Hyne v. Dewdney, 21 L. J. Q. B. 278. For examples of promises to pay, not being promissory notes, but agreements, see Ellis v. Ellis, Gow. 216; Leeds v. Lancashire, 2 Camp. 205; Williamson v. Bennett, 2 Camp. 417; Horne v. Redfearn, 4 Bing. N. C. 433; Sibree v. Tripp, 15 M. & W. 23; Davies v. Wilkinson, 10 A. & E. 98; Jarvis v. Wilkins, 7 M. & W. 410; Drury v. Macaulay, 16 M. & W. 146. See also note (y) to sect. 3, sub-sect. 1. I. O. U.—An I. O. U. is neither a bill or note, but a mere acknowledgment of a debt, and as such is not negotiable; see Curtis v. Richards, 1 M. & G. 46. It does not require a stamp; see Childers v. Boulnois, D. & R. N. P. C. 8; unless