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76. In my view, the "person" in s. 165(3) must mean a person who is entitled to the cheque. This means that only the payee or the legitimate endorsee of the payee would qualify as a "person" for the purposes of s. 165(3). The purpose of s. 165(3), in my view, is to deal with, among others, situations like the one that arose in Royal Bank of Canada v. Wild (1974), 51 D.L.R. (3d) 188 (Ont. C.A.), that is, where a payee deposits a cheque to his or her own account without endorsement, and to deal with restrictive endorsements. In that case, a cheque drawn by Wild and payable to Interlocking Building Systems Limited was delivered to the bank by the payee, to be deposited to the credit of his account. The words "for deposit only to the credit of Interlocking Building Systems Limited, dealer's account" were typed on the back of the cheque. There was no actual signature by way of endorsement on the cheque. The cheque was credited to the payee's account. When the cheque was presented by the collecting bank to the drawee, it was dishonoured, and charged back to the account of the payee. However, the funds in the payee's account were insufficient, there being an overdraft of $1,550. Several months later, the collecting bank demanded payment from the drawer of the cheque, Wild. The defendant conceded that the collecting bank had acquired the rights of a holder in due course by virtue of s. 165(3) of the Act.
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