Which of the following statements relative to checks is false?

• A. A manager's check operates as an assignment of funds to the credit of the payee or holder which is no longer subject to countermand.
• B. A check which is crossed specially can only be deposited in the bank whose name is written between the parallel lines.
• C. A check which is crossed generally can be deposited in any bank where the holder maintains a deposit.
• D. A crossed check is not a negotiable instrument.

Answer: (D)

The key idea is that crossing a check imposes payment restrictions but does not remove its status as a negotiable instrument. A check remains negotiable because it represents an unconditional promise or order to pay a fixed amount that can be transferred by negotiation to another holder, even when the instrument carries crossing instructions.

A manager’s check is a bank-issued instrument drawn on the bank’s own funds and payable to a named payee. Once issued, the funds are effectively earmarked for the payee, and the payment is not subject to countermand by the bank; this reflects how bank-issued checks operate.

Special crossing places the payee’s funds into a specific bank; the check can only be deposited into that bank. General crossing uses parallel lines with no bank name, and allows the check to be deposited into any bank where the holder maintains an account.

Crucially, crossing a check does not eliminate negotiability. It simply restricts the manner in which payment can be effected. Therefore, the statement that a crossed check is not a negotiable instrument is false.