This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 112.— A correspondent writes:
In your issue of July, 1899, you have answered the question No. 1ll, which is: Can a bank refuse payment of a cheque which it has marked "good for two days only," if presented after the expiration of the two days ? " We think that after the two days have expired, the cheque must be regarded as though it had not been marked by the bank, and if there are then no funds, its refusal would seem to be in order."
Will you allow me to express the opinion that this answer does not appear clear to me, as in accepting the cheque and stamping it "good for two days only," the account of the maker of the cheque has been debited and the amount deducted from the balance. Should I understand that you mean that the debit entry be cancelled and the amount of the debit recredited if the cheque is not presented for payment within two days of its acceptance by the bank?
Besides, on general principles, I am of opinion that the acceptance of a cheque by a bank renders it liable to the same extent as its acceptance of a bill of exchange drawn upon it by a foreign customer, and its responsibility cannot be affected by limitation.
I have always been under the impression that the stamping of cheques "good for two days only" was only to prevent accepted cheques from remaining outstanding.
What protection would there be to payees of cheques residing in a different place than where the cheques are payable, if the acceptance of a bank can be declared void on account of unavoidable delay in presentation?
Answer.—This subject was more fully discussed in the number of the Journal for October, 1899, and we would refer you to what was there said. Our answer to Question 111 is based on the theory that at any time after the expiration of the two days the bank's liability on the cheque ceases, and that the drawer therefore has a right to request the bank to cancel the entry in his account.
No doubt the acceptance of a cheque in proper form by the bank makes it liable to the same extent as the acceptor is liable on any ordinary bill of exchange. The point is that an acceptance "good for two days only" is not properly speaking an acceptance at all, but only a special kind of engagement, limited by its terms. We see no hardship in this view of the case, for of course no person is bound to take the cheque. If one chooses to do so he knows that if not presented within the time limit payment is not necessarily guaranteed by the bank.
The rights of holders of cheques which are accepted in the proper way differ materially from those of holders of cheques accepted conditionally on their being presented within two days.