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What is a Crossed Check? Print E-mail

Checks (or cheque, checque) are popular substitutes for cash in commercial transactions, and it may be safe to assume that Pinoy Entrepreneurs are familiar with the different kinds of checks, including crossed checks. Nevertheless, let's have a brief discussion for the benefit of those who may not be familiar with the concept and effects of a crossed check.

Among the more popular type of checks are the memorandum check, cashier's check, traveler's check and crossed check. A crossed check is one where two parallel lines are drawn across its face or across a corner thereof. The usual practice in crossing a check is to place two parallel lines diagonally on the left top portion of the check. 

The crossing of a check affects the mode of its presentment for payment. A crossed check has the following effects:

(1) the check may not be encashed but only deposited in the bank;
 
(2) the check may be negotiated only once to one who has an account with a bank; and
 
(3) and the act of crossing the check serves as warning to the holder that the check has been issued for a definite purpose so that he must inquire if he has received the check pursuant to that purpose, otherwise, he is not a holder in due course.
The check may be crossed generally or specially. The crossing is considered "special" when the name of a bank or a business institution is written between the two parallel lines. In this instance, the drawee -- the bank, in most instances -- should pay only with the intervention of that bank or company. On the other hand, the crossing is considered general when the words "and Co.", "and company" or none at all are written between the two parallel diagonal lines, and in this instance, the drawee should not encash the same but merely accept the same for deposit.
 
So, the next time you see a crossed check, you know how to transact or deal with it. There's a reason why people take an extra effort to print or draw those seemingly weird parallel lines. Wink
Published in : Topics, Money and Finance

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