- This topic has 13 replies, 2 voices, and was last updated 1 year ago by
.
- Posts
Sir if a bill is drawn for payment to payee and he further endorses it to another person
And the bill is dishonored
To whom the drawer will be liable ???
The payee or the person to whom the bill is endorsedThe endorsee is a holder (either a holder in due course or, simply, a holder for value).
When the holder submits the bill for payment and is notified that payment will not be forthcoming, the holder will (presumably) go back to the person that endorsed it to him / her. And if we follow that principle back through the chain of successive holders / endorsees, we arrive at the endorsee that took the bill from the payee.
And the payee will need to compensate that endorsee and will, in turn, go back to the drawer (or the guarantor-in-case-of-need)
Your question is: “To whom the drawer will be liable ???”
The answer is: “Anyone and everyone that has signed the bill, no matter in what capacity they made that signature”.
OK?
NO!!! Anyone, ANYONE that has signed th bill in WHATEVER CAPACITY
So, if the endorsee has further endorsed and the bill has been successively endorsed through 2 more, 200 more or 2,000 more endorsements, ANYONE that has signed the bill is liable to subsequent claimants … BUT, importantly, the drawer is liable to ALL SIGNATORIES
If the drawer, having once dishonoured the bill upon presentation for payment, subsequently relents and pays the holder, then there is no further liability for the drawer.
The holder of a dishonoured bill can sue ANY prior signatories (and, in the case of a holder for value, can sue the person immediately before them even if they haven’t signed the bill)
OK?.
But sir the article 21 states that endorsee for collection on the instrument is not liable to any subsequent holders
And (in typical fashion) you have given me an incorrect source title!
The correct title is “UNITED NATIONS CONVENTION
ON INTERNATIONAL BILLS OF EXCHANGE
AND INTERNATIONAL PROMISSORY Notes”Sir the article states
Article 21(2)
makes the endorsee(for collection) not liable on the instrument to any subsequent holdersI am extremely sorry sir
It’s not endorsee
It’s ENDORSER FOR COLLECTION IS NOT LIABLE TO ANY SUBSEQUENT HOLDERSOK, so my original answer is correct!
And PLEASE be more careful in your subsequent posts – this is not the first time that you have (importantly) misquoted a source!
Yes sir duly noted
And sir if the ENDORSEE WILL BE LIABLE TO CLAIMS AND DEFENSE ONLY AGAINST THE ENDORSER
RIGHT??
- You must be logged in to reply to this topic.