Question 856. - Cheques, etc., of a limited liability company need to be signed by the president and secretary-treasurer. A cheque in payment of goods is endorsed by the company to another party, the president only signing for the company. Would the bank be justified in refusing this?

Answer. - It is presumed that the cheque is drawn upon the bank that carries the company's account, and it is part of its duty to see that its customer has a clear discharge from the payee. If an authority for the President to endorse alone only extended to endorsement of items to be placed to the company's credit, the discharge is evidently insufficient, but this would be determined by the by-laws of the company, and these should govern the paying bank's action.