This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 187.— A certified cheque on a bank in California, payable to Stephen Jones and Mrs. William Smith, and endorsed S. Jones and Sarah Smith, is paid by a Canadian bank. It goes forward endorsed by the bank in the regular way, and when presented by the Bank of B. to the drawee bank (the Bank of C), is refused because endorsation is claimed to be irregular.
The cheque is protested by the Bank of B. The Canadian manager cannot have foreseen that it would be protested, as, according to our custom, if refused it would have been returned for guarantee of endorsement.
The drawer of the cheque (the customer of the Bank of C.) made all the trouble by putting "Mrs. Wm." instead of " Mrs. Sarah." Who should pay the costs in this case ?
Do you not think it would be advisable to request Canadian bankers to use the Christian name of married women when selling drafts, etc. ?
Answer.—The practice of Canadian banks, or the natural expectation of the Canadian banker in the particular case referred to, do not seem to us to have any bearing on the question involved, nor does the mistake of the drawer of the cheque, in putting " Mrs. Wm. Smith " instead of " Mrs. Sarah Smith" seem to us to affect the question.
The parties receiving the cheque could have prevented any trouble by returning it and requesting that a cheque in the proper names be issued, or by procuring Mrs. Smith's signature in the form required by the cheque, and we believe customary in such cases, i.e.,
"Mrs. William Smith,
The question then simply is, was the cheque properly protested by the collecting agent, and if so, who should bear the costs' incurred?
We are of the opinion that the bank was justified in protesting the cheque, and that the costs are chargeable against the parties for whom the Canadian bank cashed it. On the return of the cheque protested for non-payment the bank would be entitled to collect from them the amount of the cheque and all charges.
The practice of making cheques or drafts payable to married women in the form used in the above case is open to serious objection, and should, we think, be discouraged.