Question 394. - "A" presents a camp order at a certain bank to be cashed. The bank does not know "A," but is familiar with the firm the order is issued on. The bank refuses payment, telling "A" to present the order at the office of the firm. "A" does this and the treasurer of the firm gives "A" a cheque on their bankers. "A" returns with the firm's cheque and has the same cashed, the paying bank presuming "A" to be the party to whom the cheque is payable. The cheque is patted through the clearing house in the usual way and is honoured by the firm's bankers. It transpires later that "A" had stolen the camp order forging the foreman's signature as well as the payee. The firm claim the paying bank paid the cheque to the wrong party. Can they collect from the bank or did the treasurer identify the payee when he accepted the endorsed camp order from him giving him the cheque?

Answer. - The firm may decline to allow the cheque to be charged to its account if it was not endorsed by the party in whose favour it was drawn.