This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 165.— Can the holder of a bill or cheque payable to bearer endorse it " Payable to the order of A " ? In other words, a bill or cheque being originally payable to bearer can any holder or endorser make it payable specially or restrictively ?
Answer.—Under sub-section 3 of sec. 8, Bills of Exchange Act, it is declared that "a bill is payable to bearer which is expressed to be so payable." This seems to preclude the possibility of such a bill being made payable otherwise than to bearer, and when a cheque is so drawn the drawer's instructions are not affected by an endorsement, and the bank is protected in paying it to bearer, in accordance with its terms.
If the holder of such a cheque desires to protect himself from loss, he can do so by crossing the cheque generally or specially as he may desire.