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Hi!
I am confused about the meaning of the following sentence:
Makes the endorsee subject only to the claims and defenses which may be set up against the endorser.
How is a defense sent up against an endorser?
And how does that relate to the next sentence which states the endorsee is not liable on the instrument to any subsequent holder?
Thank you in advance!
Sorry I am going to add the following question:
The drawer undertakes to pay the bill if it is dishonored
The endorser undertakes to pay the instrument to the holder if it is dishonoredWhat is the difference. If the bill has already been endorsed, then the drawer is no longer liable?
Please don’t tack on one question with another – I nearly missed your second question!
Your first question confuses me, not least because I’m struggling with the context but secondly because I’m not convinced that you have ‘ee’ and ‘er’ correctly applied
Is the context of the question related to endorsement ‘sans recours’?
You write:
‘The drawer undertakes to pay the bill if it is dishonored
The endorser undertakes to pay the instrument to the holder if it is dishonoredWhat is the difference. If the bill has already been endorsed, then the drawer is no longer liable?’
No, the drawer is always liable to the payee and subsequent holders. Anyone who signs a bill becomes, by that signature, liable to all subsequent holders
If you hold a bill that has been signed by 30+ endorsers, and now, on presentation to the drawer for the bill to be honoured you discover that the drawer is dead / bankrupt/ disappeared without trace, who do you turn to? Your immediate endorser. They in turn, will turn to their immediate endorser and so on back up the chain of endorsement until, presumably, you arrive back at the payee (the original endorser) or the drawee bank (if the bank has ‘accepted’ the bill)
OK?
If you hold a bill that has been signed by 30+ endorsers………
Yes thank you! This helped me visual the chain of events 🙂 It makes sense now!
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