Question 285.— During the writer's experience as accountant for ten years at different branches, including Winnipeg and Vancouver, it has been customary under Rules Respecting Endorsements Nos. 4 and 10 to call for a guarantee.

This custom we have never had questioned until a couple of days ago, when we asked for a guarantee for an item endorsed as follows: " Pay to the order of            Bank

for credit of                ."

This endorsement was made by rubber stamp; the bank depositing the item refused to guarantee; we therefore took the item off their deposit slip; they based their stand on Rule 7 re endorsement and we held to Rules 4 and 10. According to Rule 7 a bill so endorsed "may be refused until restriction is removed."

We have discussed the point with one or two local bank managers and they take the same ground as we take.

The asking for a guarantee on these restrictive endorsements has been, we have always understood, with a view of leading the public to adopt an endorsement in accordance with the views of the Canadian Bankers' Association.

This endorsement was by rubber stamp, and if the question should arise, would this be a valid endorsement in accordance with the Bills of Exchange Act?

Answer.—An endorsement by rubber stamp if put on with the payee's authority is valid, and under sec. 35, sub-sec. 2 of the Bills of Exchange Act, the endorsee has the right to sue your bank for payment.

A guarantee by the depositing bank is not asked for in Montreal and is not we consider a legal necessity.