Association Bank vs CA Essay Sample
Reyes was engaged in the RTW concern and held minutess with different section shops. She was approximately to roll up payments from the section shops when she was informed that the payments had already been made. through crossed cheques issued in her business’ name and the same were deposited with the bank. The bank accordingly allowed its transportation to Sayson who subsequently encashed the cheques. This prompted Reyes to action the bank and its director for the return of the money. The test and appellant tribunal ruled in her favour. Issue:
Has Reyes the right to retrieve the money allowed by the bank to be transferred and encashed by Sayson? Opinion:
The cheques were crossed cheques and it means that the cheque can merely be deposited straight into a bank history and can non be instantly cashed by a bank or any other recognition establishment. The cheque was for payee’s history merely. Reyes was able to turn out that she has ne’er authorized Sayson to lodge the cheques nor to encash them but the bank allowed the cheques to be deposited. cleared and paid to Sayson.
Under accepted banking pattern. traversing a cheque is done by composing two parallel lines diagonally on the top left part of the cheques. The crossing is particular where the name of a bank or a concern establishment is written between the two parallel lines. which means that the drawee should pay merely with the intercession of the company. The crossing is general where the words written in between are “And Co. ” and “for payee’s history only” . as in the instance at saloon. This means that the drawee bank should non encash the cheque but simply accept it for sedimentation. The payee of crossed cheques issued with the notation “for payee’s history only” can action a collection bank which allowed an unauthorised 3rd individual to lodge the cheques in his ain history and to retreat the returns of the cheques. because the returns of the cheques belonged to the payee and the bank paid the cheques although the 3rd individual had no rubric to the cheques. The crossed cheques were accepted by the bank for the history of Sayson. Those were crossed cheques and the payee wasn’t Sayson but Reyes. The bank so stamped all anterior endorsements/ deficiency of indorsement guaranteed and treated the said cheques as negotiable instrument and consequently assumed the guarantee of the subscriber. When the bank paid the cheques so indorsed notwithstanding that rubric has non passed to the subscriber. it did so at its hazard and became apt to the payee for the value of the cheques.
