Crossing – Knowsia

LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

Question

Banker’s function to collect proceeds of Cheques Collecting Banker and the Customer.

In United Dominion Trust (UDT) v Kirkwood (1966), it was held that the Banker also has a function to collect proceeds of a cheque for the credit of the Customer’s Account, wherewith, in performing this function, a Collecting Banker becomes a holder, who would receive payment for the Customer’s Account by presenting the said cheque to the Paying Banker for payment. Such transaction is usually dubbed, the Cheque Deposit!!!

By s. 81 BEAct 55, the Collecting Banker is under strict liability to perform the above function and obtain protection if, it does same for a customer, in good faith and without negligence. Others include, in accordance with the endorsement and to the crossing if any.

in accordance with s. 32(4) BEAct of 1961.
in line with s. 27 BEAct of 1961.
That no such endorsement by a legal person shall suffice or be valid.
That any deviation in the above would constitute “conversion”.

The Candidate, hearing in mind that the, “without negligence” test could date back as far as when the Account was opened for the Customer, is expected to:

demonstrate understanding of “Who the Customer is”, into such judicial decisions:
the Mathews v. William Brown & Co. (1894)
the Great Western Railway v. London and County Banking Co [1901]
Demon Malawi Ltd v. New Building Society (1991)
Ladbroke v Todd [1914];
Commissioner for Taxes v English, Scottish and Australian Bank [1920] and
Wood v Martin’s Bank Ltd [1959]

Required: State and explain what is required of the Collecting Banker to obtain protection under s. 81 BEAct 55.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cheque Collection, Collecting Banker, Conversion, Crossing, customer definition, Endorsement, Good Faith, Judicial Decisions, Without Negligence
Level: Level 3

Topic: Banker and Customer Relationship
Series: October 2019

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

Question

Crossing of cheques has legal implications in banking transactions, and a cheque is a type of negotiable instrument.

Required:
i. A cheque instruction to “pay Ronke the sum of N50,000.00” without crossing the face of the cheque with two parallel lines.
ii. “Pay Andrew N100,000” with two parallel lines traversing the face of the cheque.
iii. “Pay Mary N150,000” with two parallel lines with Congo Bank written in between the two parallel lines on the face of the cheque.
iv. “Pay Ngozi N200,000” and by cheque with two parallel lines and the words “account payee only” written in between the two parallel lines.
v. Define negotiable instruments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Banking Transactions, Cheques, Crossing, Negotiable Instruments, Payment Instructions
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2020

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

Question

The type of crossing by which a cheque can only be deposited and collected through the bank account of the person whose name is written on it is a ____________.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Banking, Cheques, Crossing
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

Question

Banker’s function to collect proceeds of Cheques Collecting Banker and the Customer.

in accordance with s. 32(4) BEAct of 1961.
in line with s. 27 BEAct of 1961.
That no such endorsement by a legal person shall suffice or be valid.
That any deviation in the above would constitute “conversion”.

The Candidate, hearing in mind that the, “without negligence” test could date back as far as when the Account was opened for the Customer, is expected to:

demonstrate understanding of “Who the Customer is”, into such judicial decisions:
the Mathews v. William Brown & Co. (1894)
the Great Western Railway v. London and County Banking Co [1901]
Demon Malawi Ltd v. New Building Society (1991)
Ladbroke v Todd [1914];
Commissioner for Taxes v English, Scottish and Australian Bank [1920] and
Wood v Martin’s Bank Ltd [1959]

Required: State and explain what is required of the Collecting Banker to obtain protection under s. 81 BEAct 55.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cheque Collection, Collecting Banker, Conversion, Crossing, customer definition, Endorsement, Good Faith, Judicial Decisions, Without Negligence
Level: Level 3

Topic: Banker and Customer Relationship
Series: October 2019

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

Question

Crossing of cheques has legal implications in banking transactions, and a cheque is a type of negotiable instrument.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Banking Transactions, Cheques, Crossing, Negotiable Instruments, Payment Instructions
Level: Level 1

Topic: Negotiable Instruments
Series: NOV 2020

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

Question

The type of crossing by which a cheque can only be deposited and collected through the bank account of the person whose name is written on it is a ____________.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Banking, Cheques, Crossing
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

Question Tag: Crossing

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LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

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LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

You're reporting an error for "LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55"

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

You're reporting an error for "BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments"

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

You're reporting an error for "BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking"

LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55

Explain the requirements for a collecting banker to obtain statutory protection under section 81 of the Bills of Exchange Act, 1961 (Act 55) when collecting proceeds of a cheque, including acting for a customer, in good faith, without negligence, and in accordance with endorsements and crossings.

You're reporting an error for "LPB – Oct 2019 – L3 – Q2 – Collecting Banker’s Responsibilities under s.81 BEAct 55"

BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments

Explain different cheque crossing types and define negotiable instruments.

You're reporting an error for "BL – Nov 2020 – L1 – SB – Q5d – Negotiable Instruments"

BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking

Identifying the type of cheque crossing for deposit and collection.

You're reporting an error for "BL – May 2014 – L1 – SA – Q17 – Law Relating to Banking"

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