 The law govern is Bill of Exchange Act 1949.

 So all provision mentioned is actually refers

to the BEA 1949.

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-s73 BOE – boe drawn on a banker and payable on demand
(dd).
- unconditional order

-Sign by drawer

-Drawn on a banker (drawee)

-It orders the banker to pay a sum certain in money on dd

-Drawn in favour of specified person (payee) or to his order or

in favour of a bearer.

-S3(4) (a) – a bill is not invalid by reason that it is not dated

although a banker need not honour it.
- s12&20 – allow holder of undated cheque to fill in the true

date of its issue within reasonable time.

-- s12(b) – if incorrect date inserted and cheque reach holder

in due course, date inserted treated as correct date of issue.

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 S36(3) – cheque is overdue/stale if it has been in
circulation for an unreasonable length of time.
 Bank practice – cheque can be in circulation untill 6
mnths of issued date.
 S13(2) – cheque can be antedated (date earlier than
date issued),postdated (a date in future) or Sunday
dated.

CROSSING OF CHEQUES
- Difficult for unauthorised person to obtain pyment across
the counter.
- A cross cheque can only be paid through a bank, person
presenting a cheque must have a bank a/c.
- S78 – crossing is material part of cheque, cannot be
altered in any way except as authorised under S77.
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 S77
– a cheque maybe cross generally or specifically by
drawer.
- If cheque is uncross, the holder may cross it generally
or specifiacally.
- If cheque cross generally, holder may cross it
specifically.
- If cheque cross generally or specifically, holder may add
the words not negotiable.
- If cheque cross specifically, banker to whom it is cross
may again cross it specifically to another banker for
collection.
- If uncross cheque or generally cross cheque is sent to
banker for collection, he may cross it specially to
himself.

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 A crossing is made by drawing 2 parallel lines
across the face of cheque.
 Sometimes word maybe written between the lines.
 S79(2) – banker paying contravention of the
crossing is liable to the true owner of the cheque
for any loss he may sustain owing to the cheque
having so paid.
TYPES OF CROSSING
 General crossing
 S76(1) – consist of 2 parallel transverse line drawn
across the face of the cheque.
 Paying banker can only pay amount on the cheque
to collecting banker, cannot pay cash across the
counter.
ABC BANK

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 S76(2) - a crossing is special when a name of a
banker is written between the parallel transverse
line or it is written across the face of the cheque
w/out the lines.
 Paying banker must pay the amount of the cheque
only to the collecting banker named in the crossing
– cheque can only be negotiated to person who is
customer of the bank to whom it is crossed.

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 S81 – it can be transferred but the person taking it
(transferee) , however honestly and for value, cannot obtain
a better title than that of a person from whom he receives
it(transferor).
 If the title of transferor is defective, it will affect the
transferee even though he may not know of the defect.
 Lord Lindley in Great Western Railway Co. v. London and
County Banking Co. (1901) AC 414 – “anyone who takes not
negotiable cheque take it at his own risk, and his title to
the money got by its means is as defective as his title to the
cheque itself”.
 Wilson & Meeson v. Pickering (1946) KB 422 – W drawn
cheque in blank crossed not negotiable. B (clerk) who is
suppose to fill in the amount and name of payee, inserted a
sum in excess of authority and delivered to P in paymt of
her own debt. – held that since B has no title to cheque, P
had no better title and W is not liable.
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 S81A – a/c payee only cheque shall not be transferable
but shall only be valid as to the parties thereto.
 Notice to collecting banker that only a/c of payee is to
be credited.
 Universal guarantee Property Ltd. V. National Bank of
Australasia Ltd. (1965) 2 All ER 93 – a collecting banker
is prima facie guilty of negligence and liable to the true
owner for the amount of the cheque, if he disregards
the crossing.
 Woodland Dvlpmnt SB v. Chartered Bank: PJTV
Densen(M) SB (3rd. Party) (1986) 1 MLJ 84 – W were
payees of 2 “A/C Payees” cheques. A director of W
handed the cheques to 2 other directors for opening an
a/c with W’s name in a bank. All 3 directors were also
directors of 3rd. Party. 3rd Party had a/c with CB. The 2
directors persuade manager of CB to collect the cheques
for 3rd Party – held that CB liable for negligence.

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 Far Eastern Bank v. Bee Hong Finance Co. (1971) 2
MLJ 6 – A went to BHF to secure loan of $10000.00.
BHF gave “a/c payee” cheque. A with B went to FEB
where B had an a/c. B induced FEB accountant to
put cheque into his a/c as A has no a/c and prove
to FEB that A is the payee. After having the cheque
marked as good for paymt by paying bank, FEB
bank cashier paid $9800 to A. – held that FEB was
not negligence. A collecting bank may credit an
a/c payee cheque into the a/c of another person as
long as the money actually goes to payee.

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 S 64 (1) – if BOE/cheque has been materially altered
w/out drawer’s authority, drawer is discharged from
liability and drawee bank cannot debit drawers a/c if
it had paid such a bill/cheque.
 S64(2) – cheque is materially altered if there are
changes to date, amount, name of payee or any
crossing or any change which alters the business
affect of the cheque.
 Apparent alteration – parties liable on the bill at time
of alteration will be discharge but person who made
the alteration and all susequent parties who took it
will be bound by it as altered.
 Non-apparent alteration- a holder in due course has
the right to enforce according to its original tenor.
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