Although a drawee of a bill is not usually liable thereon until acceptance, a banker having effects belonging to his customer is bound to pay his customer’s cheques within a reasonable time. There is what is called an implied contract that the banker should do so, and if it is broken the customer may recover damages. The rule as to presentment of bills within a reasonable time (i.e,, in general the day after issue) applies to cheques, but a drawer is not relieved by the holder’s negligence in presenting unless he has been injured thereby, as for example by the failure of the banker in the interval. The habit of crossing cheques with the name of some banker is believed to have been originally intended as a direction to drawees to pay only to the bankers so named, but it was held at law that such crossing amounted only to a direction to pay to some banker. The words “and Co.,” the name of the particular banker being left out, have the same effect. Payment of a crossed cheque otherwise than through a banker was at common law evidence of negligence on the part of the drawee, rendering him responsible to the drawer. The Act 19 and 20 Vict. c. 25 enacted that a cheque bearing across its face an addition of the name of any banker or of the words “and Company” should be payable only through some banker. Payment made otherwise than through a banker hitherto indirectly and practically invalid was thus made directly and as a matter of law invalid. In the construction of this statute it was held by the Court of Common Pleas, in the case of Simmons v. Taylor (27 Law Journal, 45), that the crossing was no part of the cheque and that its fraudulent obliteration was no forgery of the cheque, and that the payment, without negligence, of a cheque with the crossing so obliterated was good as against the drawer. This decision led to the Act 21 and 22 Vict. c. 69, which made the crossing a part of the cheque and its fraudulent obliteration a felony. A holder may cross an uncrossed cheque, or prefix any banker’s name to the words “and Co.,” but if a particular banker is once named the cheque is henceforth payable through him alone. When a crossing has been obliterated a wrong payment of the cheque in consequence, if without fraud or negligence on the part of the banker, shall not be questioned. In a recent case (Smith V. Union Bank of London) the effect of these enactments was explained by the Court of Appeal in a manner which startled the commercial community. In that case the plaintiff had crossed a cheque received by him from a customer with the name of his own bankers. The check was stolen, and finally passed for full value to C who paid it into his bankers, and they in turn received payment of it from the defendants. The court held that the negotiability of the cheque was not affected by statute, that C had become the lawful holder, and that the plaintiff had no action against the defendants. The consequence of this decision was the Act 39 and 40 Vict. c. 81, which provided that when a cheque bears across its face an addition of the words “and Company,” or any abbreviation thereof, between two parallel transverse lines, or of two parallel transverse lines simply, and either with or without the words “not negotiable,” that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed generally. "When a cheque bears across its face an addition of the name of a banker, either with or without the words “not negotiable,” that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed specially, and to be crossed to that banker. When a cheque is uncrossed, the lawful holder may cross it generally or specially; when it is crossed generally, he may cross it specially, and whether crossed generally or specially he may add the words “not negotiable.” When a cheque is crossed specially, the banker to whom it is specially crossed may again cross it specially to another banker as his agent for collection. If a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker; if crossed specially, not otherwise than to the banker specially named in the crossing or his agent for collection. When a cheque is crossed specially to more than one banker (except when crossed to an agent for collection) the banker on whom it is drawn shall refuse payment thereof. When a crossed cheque has been paid, either to the special banker in case of a special crossing, or to some banker in case of a general crossing, the banker and (if the cheque has come to the hands of the payee) the drawer shall be in the same position as if the cheque had been paid to and recovered by the true owner thereof. A banker paying crossed cheques otherwise than as authorized by this Act shall be liable to the true owner for any loss he may sustain. When a cheque is presented for payment which does not appear at the time to be crossed, or to have had a crossing which has been obliterated, or to have been altered otherwise than as authorized by the Act, a banker paying the same in good faith and without negligence shall not be liable by reason of the cheque having been crossed, obliterated, or altered, or by reason of payment having been made otherwise than to some banker, or to the banker named in the special crossing. If the crossed cheque bears the words “not negotiable," the person taking it takes and can give no better title to it than the person had from whom he took it.

A cheque is payment unless dishonoured; but on the question whether a debt has been paid, it is not sufficient to produce a cheque drawn by the debtor in favour of the creditor, and paid by the banker, unless it can be shown to have passed through the creditor’s hands. Where a check has been fraudulently altered, and a banker pays a larger sum than that originally written, he must bear the loss, and cannot charge his customer unless some act of his facilitated the forgery. Where a cheque was filled up in such a way as to make deception easy, the customer was held responsible for the loss.

A new description of draft on a banker is introduced by the Act 16 and 17 Vict. c. 59, § 19.