Briefly state the various kinds of crossing on a cheque

ANSWER

A crossing consists of two parallel transverse lines on the face of the cheque. It is an instruction to the banker not to pay the proceeds of the cheque across the counter. There are two types of crossing namely; general and special.

A general crossing consists of two parallel transverse lines on the face of the cheque with or without the words “and company”, “not negotiable” “account payee” etc
A Special Crossing consists of two parallel transverse lines on the face of the cheque with the name of the banker with or without the words “not negotiable.”
- An uncrossed cheque may be crossed generally or specially.
- A cheque crossed generally may be crossed specially.

Stephane issued a cheque in favour of Thorne. However, when Thorne presented it for payment it was dishonoured and returned marked “R.D.”. It now transpires that when the bank clerk was checking on Stephane’s balance he checked on the wrong account and as a result the cheque was dishonoured under a mistaken belief of lack of funds. Explain Stephane’s rights against the bank. (8 marks)
Alex is a customer at Pesa Bank. Three days ago, he visited the bank and complained that he had noticed from his bank statement that three unauthorized withdrawals had been made and his account debited. Investigations reveal that the withdrawals were made Charles. Alex’s office messenger who stole Alex’s cheque book made out the payments and subsequently forged Alex‟s signature. Explain the legal position of Pesa Bank
BANKING
Mr. Karanja signed blank cheques and left them with his wife to draw cash while he was away attending to business affairs. Mrs Karanja instructed Hatari, a clerk in the firm of Karanja and Karanja Associates to fill in the cheques. Hatari filled in the amount leaving a gap after the words “Sh.” and wrote the amount in words from the middle of the line without using a capital letter. Hatari showed the cheques to Mrs Karanja written “Sh. 50,000” and fifty thousand only.” He was authorized to encash the cheque. However before presenting the cheque for payment Hatari added figure “3” to the amount in figures and “three hundred” in the words. He encashed the chequed for Sh. 350,000. He then gave Mrs. Karanja Sh. 50,000 only. These facts have come to light after Hatari’s resignation and Mr. Karanja intends to sue his bankers. Advise the bank.
Mr. A, a car dealer sells second hand cars. On Thursday last week, he placed an advertisement in a daily newspaper which stated the following: “Once in a lifetime, opportunity to own a one year old Nissan Caravan, low mileage, Kshs.500,000 cash. The offer is valid for only one day and the car will go to the first person who accepts it.” When Mr. B saw the advertisement, he immediately posted a letter of acceptance of Mr. A‟s offer. Mrs. C also saw the advertisement and came to inspect the car after which Mrs. C offered Mr. A a cheque of Kshs. 500,000. However, Mr. A refused to accept the cheque stating that another potential buyer had already offered to buy the car. Later in the day Ms D, another interested buyer telephoned Mr. A informing him that she was willing to buy the car but asked Mr. A if he would keep the offer open until she could go to her bank to obtain a loan. Mr. A accepted the request. However later, in the day, Mr. E, another potential buyer said that he would pay Sh. 600,000 in cash for the car. Mr. A agreed to sell the car to Mr. E. On Monday morning, Mr. A received Mr. B‟s letter of acceptance. At the same time, Mr. E returned to complete the transaction. However, in the afternoon Mr. E telephoned Mr. A to say that he had second thoughts and he no longer wished to purchase the car. Citing relevant decided cases where applicable, explain the legal principles in the case in relation to: (a) Mr. A (4 marks) (b) Mr. B (4 marks) (c) Mrs. C (4 marks) (d) Ms. D (4 marks) (e) Mr. E (4 marks)
Describe the various kinds of resolutions that may be passed at general meetings. State the difference between them and list matters that require such resolutions to be passed before they can have effect

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