Form 19. Forms of Checks
The certified check is usually an individual’s or firm’s check bearing the certification of the bank’s cashier that the check is good. This certification is evidenced by writing across the face of the check these or similar words:
Good
when properly indorsed
First National Bank
F. G. Moffitt, Cashier
Such a certification makes the bank responsible for its payment.
A cashier’s check is a bank’s own check drawn on itself in favor of a third party and signed by its cashier. As a medium of exchange it ranks higher than the check of a private person, due to the superior credit of the bank and to the fact that the bank is usually more generally known in a community.
Other Negotiable Instruments.—Express and postal money orders are drafts payable at sight, drawn respectively by one express agent on another and by one postmaster on another.
A warehouse receipt is a receipt from a warehouse, elevator, or other storage concern acknowledging the receipt of goods or property. Such a receipt usually contains the contract agreements entered into by the parties, covering the conditions according to which the goods are accepted for storage. The warehouse receipt is usually negotiable, or partially so, in that title to the property may pass with its transfer.
Principles Governing the Writing of Commercial Paper.—Ordinary prudence requires commercial paper to be drawn in a way that will make forgery difficult if not impossible. To this end the following two rules should be observed:
1. Leave no blank spaces, particularly where the amount is written. This is not so important when the amount is perforated, with a perforated star at each side.
2. Write the indorsement at the top margin. Unless this is done, some statement might be inserted which would change materially the effect of the signature; e.g., the payer might later write above the signature that the check is accepted in full payment for a definite bill.