PART VI.-FORMS.

CHAPTER XXXIII.

SIGNATURES, CHECKS AND RECEIPTS.

(1) SIGNATURES.

The signatures used in the financial operations of a corporation vary as to form and are usually affixed by the treasurer. An informal signature often employed by the treasurer is as follows:

Form 1.-Treasurer's Signature. Informal.

JOHN H. WILSON,
Treasurer.

This signature should be affixed only when the corporate name appears prominently upon the instrument signed as otherwise it lacks precision. As a rule it is not employed in matters of importance though it frequently appears on checks and receipts, and is almost invariably used when the treasurer affixes his signature to stock certificates. When used within the scope of the treasurer's authority it is in most states binding upon the corporation.

Form 2.-Treasurer's Signature. Formal.

JOHN H. WILSON,

Treasurer Farrand Hydro-Carbon Co.

This signature is no more effective than the informal sig

nature in binding the corporation but is more explicit and leaves no doubt as to the identity of the person signing and the capacity in which he signs. It should be used in all important matters when for any reason the corporate signature is not employed, and in matters of less importance whenever the corporate name does not appear prominently upon the instrument signed.

Form 3.-Corporate Signature.

(a) Farrand Hydro-Carbon Co., By JOHN H. WILSON,

Treasurer.

(b) Farrand Hydro-Carbon Co., By HENRY H. FARRAND, President. JOHN H. WILSON, Treasurer.

It is not customary, save in corporate endorsements and similar matters, for the treasurer alone to affix the corporate signature. Almost invariably he joins with some other corporate official, usually the president.

The effect of either of the preceding corporate signatures when properly affixed is to bind the corporation and the corporation only. The treasurer's signature will, as stated, when properly employed, usually bind the corporation without involving the treasurer in any personal liability, but not with the same certainty and conclusiveness as does the corporate signature. Thus in some states the treasurer's official signature to a note intended to be a corporate note, has been held to constitute the treasurer a principal and liable for its payment. It is therefore a safe rule for the treasurer to employ the corporate signature in all the corporate affairs unless there is some special reason to the contrary.

Checks, notes and drafts given in payment of amounts due the corporation are usually made out in the corporate name, and when endorsing these for deposit or collection the treasurer uses the corporate signature in the general form shown in Form 3 (a), the prefix "By" being usually omitted.

In cases where the corporate signature is continuously employed in the same form, as on checks, it is-save as to the

name of the affixing officer-usually printed, appearing then as in Form 3 (a), except that the name of the signing official is omitted. The instrument is not then effective until the name of the signing official is written in, completing the signature. A rubber stamp is also frequently employed to affix the corporate signature except the names of the affixing officers which are written in just as in the case of the partially printed signatures.

The endorsement of corporate checks is frequently made in its entirety by means of a rubber stamp in the following general form, no writing of any kind being employed:

Form 4.-Corporate Endorsement.

Pay to the Order of the
MERCHANTS' EXCHANGE BANK

Farrand Hydro-Carbon Co.

JOHN H. WILSON, Treasurer.

This endorsement is accepted by the banks and on account of the ease and rapidity with which it may be affixed, is much used. It lacks the self-proving features of the written endorsement, but, as the instrument so stamped comes direct to the bank from the corporation and under conditions which render the improper use of the stamp practically impossible, its employment is not objectionable.

(2) CHECKS.

Corporate checks are usually signed with the corporate signature affixed by the treasurer and are countersigned by some other corporate official. The treasurer's official signature is frequently employed instead of the corporate signature and is not objectionable as any signature for checks agreed upon between the bank and the corporation is effective and sufficient. (See § 221.)

The legal effect of a check is not affected in any way by its general arrangement nor by the introduction of extraneous

matter, provided only that the essential features of the check are not disturbed. (See § 217.) In consequence, checks are found in many different forms, varying according to the taste of the parties by whom they are designed, or according to the conditions under which they are employed. All the check forms presented in the present chapter are taken from checks now in use by corporations of national reputation.

Form 5.-(a) Check. Ordinary Form.

The form last given has the advantage from the bankers' standpoint of bringing number, date and amount at the right hand side of the check, so that in running through a bundle of checks all may be seen at a glance.

From an advertising standpoint the ordinary form of

Countersigned

check is sometimes objectionable to the drawer because of the prominence given the name of the drawee bank and the subordination of the drawer's name. To obviate this, the draft form of check is frequently employed. It is entirely effective, can be arranged in very neat and attractive form and undoubtedly does allow the name of the drawer to be displayed to advantage.

Checks in this general form are frequently arranged with the name of the drawer in the center of the upper part of check. The date then usually comes to the right and the number of the check to the left, either above or below the level of the name according to individual taste.

The use of checks so phrased or arranged as to serve the purpose of both check and receipt is extending. The advantages of the practice are apparent. It obviates the necessity of writing, mailing and preserving a more formal receipt, thereby lessening labor and avoiding expense. Such checks are a convenience to all parties concerned and afford the best possible receipts for payments made by their means.

Receipt checks are seen in many different forms. The following is simple and effective.