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- This topic has 13 replies, 2 voices, and was last updated 3 weeks ago by MikeLittle.
- February 27, 2023 at 5:44 am #679680
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 endorsedFebruary 27, 2023 at 8:51 am #679694
The 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?February 27, 2023 at 10:22 am #679698
Anyone except endorsee for collection right??February 27, 2023 at 1:19 pm #679709
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?.February 27, 2023 at 2:01 pm #679712
But sir the article 21 states that endorsee for collection on the instrument is not liable to any subsequent holdersFebruary 27, 2023 at 3:11 pm #679720
Un convention of international on international bills of exchangeFebruary 27, 2023 at 3:15 pm #679722
No it doesn’t! Read it againFebruary 27, 2023 at 3:17 pm #679723
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”February 27, 2023 at 3:42 pm #679726
Sir the article states
makes the endorsee(for collection) not liable on the instrument to any subsequent holdersFebruary 27, 2023 at 3:45 pm #679727
NO IT DOES NOT!!!! READ IT AGAINFebruary 27, 2023 at 3:54 pm #679730
I am extremely sorry sir
It’s not endorsee
It’s ENDORSER FOR COLLECTION IS NOT LIABLE TO ANY SUBSEQUENT HOLDERSFebruary 27, 2023 at 3:57 pm #679731
OK, 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!February 27, 2023 at 4:34 pm #679733
Yes sir duly noted
And sir if the ENDORSEE WILL BE LIABLE TO CLAIMS AND DEFENSE ONLY AGAINST THE ENDORSER
RIGHT??February 27, 2023 at 4:52 pm #679735
Why would the endorsee be liable to the endorser? Or anyone?
The endorsee could claim against ANY prior signatory (as I have said in previous posts on this thread)
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