“The Law of Banks and Credit Institutions”, by Mary Donnelly, (Roundhall, Sweet and Maxwell, 2000) points out that three types of cheque crossing are dealt with under the 1882 Bills of Exchange Act, but that the account payee crossing “…does not yet have any legislative basis in this jurisdiction”. However, we will see later that this does not mean that this type of crossing is devoid of impact.
The three crossings dealt with under the 1882 Act are The General Crossing, the Special Crossing and the Non-Negotiable Crossing.
The General Crossing consists of two parallel lines. The words “& Co” may be added, or not, as the case may be. Whether they are added is immaterial. The impact of a general crossing is that the cheque may only be lodged to a bank account. This bank account need not necessarily be the account of the payee.
The second or Special crossing type specifies the bank into which the proceeds must be paid.
The Third Crossing is the “Not Negotiable” Crossing – this means that in addition to the cheque having to be lodged to a bank, the cheque is deprived of it’s negotiable property. In other words, while the cheque is transferable, the transferee cannot obtain a better title to the cheque than it’s previous holder.
The “Account Payee Only” crossing was dealt with in the UK under the Cheques Act of 1992. This inserted a new Section into the 1882 Act, which meant that the cheque was rendered non-transferable and valid only in relation to the parties mentioned. In both the UK and Irish jurisdictions this has had the practical impact that if a bank ignores the instruction, it will find it difficult to rely upon a defence based upon statute law.
In 1996 Section 50 of the Central Bank Bill tried to introduce a similar provision into Irish Law but it was withdrawn, presumably because a significant proportion of the Irish population did not have bank accounts at that time. Ms. Donnelly concludes “Despite the absence of legislation, individuals will continue to use this popular form of wording when drawing cheques and collecting banks will still insist that cheques marked “account payee” will not be collected unless they can be lodged directly into the payee’s account”.
The three crossings dealt with under the 1882 Act are The General Crossing, the Special Crossing and the Non-Negotiable Crossing.
The General Crossing consists of two parallel lines. The words “& Co” may be added, or not, as the case may be. Whether they are added is immaterial. The impact of a general crossing is that the cheque may only be lodged to a bank account. This bank account need not necessarily be the account of the payee.
The second or Special crossing type specifies the bank into which the proceeds must be paid.
The Third Crossing is the “Not Negotiable” Crossing – this means that in addition to the cheque having to be lodged to a bank, the cheque is deprived of it’s negotiable property. In other words, while the cheque is transferable, the transferee cannot obtain a better title to the cheque than it’s previous holder.
The “Account Payee Only” crossing was dealt with in the UK under the Cheques Act of 1992. This inserted a new Section into the 1882 Act, which meant that the cheque was rendered non-transferable and valid only in relation to the parties mentioned. In both the UK and Irish jurisdictions this has had the practical impact that if a bank ignores the instruction, it will find it difficult to rely upon a defence based upon statute law.
In 1996 Section 50 of the Central Bank Bill tried to introduce a similar provision into Irish Law but it was withdrawn, presumably because a significant proportion of the Irish population did not have bank accounts at that time. Ms. Donnelly concludes “Despite the absence of legislation, individuals will continue to use this popular form of wording when drawing cheques and collecting banks will still insist that cheques marked “account payee” will not be collected unless they can be lodged directly into the payee’s account”.
) we were taught that "A/c Payee Only" written between the two parallel heavy lines protected the cheque so it could not be cashed in by anyone other than the person named "The payee". I use it when sending cheques through the post.