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Article 21
1. If an endorsement contains the words -for collection-, -for deposit-,
·value in collection-, -by procuration-, ·pay any bank-, or words of similar import
authorizing the endorsee to collect the instrument, the endorsee ie a holder who:(1) May exercise all rights arising out of the instrument,
(2) May endorse the instrument only for purposes of collection;
(3) Is subject only to the claims and defenses which may be set up against
the endorser.2. The endorser for collection is not liable on the instrument to any
subsequent holder.My question from the other post. Does point 3 mean that when the endorsee BECOMES an endorser, he is subject only to the claims and defenses which may be set up against
the endorser?Section 35 of the Bills Of Exchange Act 1882 states:
’35Restrictive indorsement.
(1)An indorsement is restrictive which prohibits the further negotiation of the bill or which expresses that it is a mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof, as, for example, if a bill be indorsed “Pay D. only,” or “Pay D. for the account of X.,” or “Pay D. or order for collection.”
(2)A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorise him to do so.
(3)Where a restrictive indorsement authorises further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement.’So your interpretation is correct
OK?
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