Question 352. - (a) I shall be glad to learn whether the mere striking out the words "or order" converts a cheque into "bearer"?

(b) Also whether an "order" cheque altered by drawer to read "or bearer," without being initialled by him, would require the endorsement of payee?

Answer. - (a) Sec. 22 of the Bills of Exchange Act helps to answer the first question. If a cheque is payable to "John Smith," the words "or order" being struck out would not convert the cheque into a bearer cheque. If it is on its face payable to John Smith, but if John Smith endorses it in blank after the words "or order" are struck out, it becomes a "bearer" cheque.

(b) With reference to the second question, prima facie a cheque so altered must either be initialled by the drawer or endorsed by the payee, and a teller would be justified in insisting on one or the other before paying it.