Question 295.— One of the "Rules respecting Endorsements " adopted by the Canadian Bankers' Association is as follows:

" If purporting to be the endorsement of a corporation, " the name of the corporation and the official position of the " person or persons signing for it must be stated."

(1)   There seems to be some doubt as to what is covered by the term " corporation."

(2)   A cheque payable to the " Smith Manufacturing Company" is endorsed simply " The Smith Manufacturing Company." Is this endorsement regular under the Rules assuming the company not to be an incorporated body?

(3)   If it were a real corporation would the paying bank be entitled to demand a guarantee of endorsement?

Answer.— (1) We think the rule covers either a real '' corporation" or persons trading under a quasi-corporate name; the endorsement in either case would " purport" to be that of a corporation.

(2) The endorsement of " The Smith Manufacturing Company " purports to be the endorsement of a corporation, whether the company is incorporated or is a private partnership. If it were a private partnership we think the rule would be complied with by the party endorsing it adding to his signature such words as the following:

" The Smith Manufacturing Company,

"By John Smith, one of the partners."

or, "By John Smith, Sole Proprietor."

(3) The rights of the paying bank under the rules are alike whether it is a corporation or not. If the endorsement does not state the name of the person signing and his position, it is irregular under the rules, and clause 8 applies. This gives the paying bank the right to demand a guarantee, or to refuse payment until the irregularity is removed.