Resistance and Refusal by Banks

[mikecz]

If not for anything else, just having "pay to" also more correctly stated pay to bearer, doesn't require the current holder of the check to produce identification. The check could be written to anyone, and anyone could cash it. If the check is lost, whoever may pick it up can cash/deposit it. If the check was a Pay to the order of, then the payee were to endorse it, it becomes "bearer paper" and acts similar to "pay to", as any person who picks up the check is now able to complete a transaction with it.

I have a few hired hands that don't have identification, lets say they are Canadians. They hate checks because of this reason, id needs to be shown. I will frequently write checks to a brother, or sister or closest of kin who has a valid id. The kin will cash and forward the money to the hired hand.

As I understand it, and my next check I will complete this process, I will cross out "pay to the order of" and change it with initials to "pay to bearer". The hired hand should have no problem. As I see it, the check with this statement becomes the same as cash. A good way to add anonymity to checks. (I could also write a check to myself, endorse it, and give it to him, the check has now become bearer paper, really as good as cash)

What I don't quite understand is where the lawful money angle comes into play? I understand the negotiation part of your description, but, pay to really means pay to bearer. It doesn't have to do with the execution as it only defines who may complete a transaction with the instrument. I believe that step comes with the endorsement or non-endorsement of said check. Thinking of it another way, having a Pay to bearer on the check, then a signature on the back is completed with an endorsement then allows the check to become used by the bank a a FRN correct? Did I mention this forum is awesome.