Home >> Dictionary Of Banking >> Guardians Of The Poor to Or Mandate >> Indorsement_P1

Indorsement

bill, indorsee, blank, payable, special, signature and written

Page: 1 2 3 4 5

INDORSEMENT. (Latin I n dorsum, on the back. I Spelled also endorse ment. In Scotland the word used is often ' ind orsat ion. " The indorsement of a bill (or cheque, is the writing, signed by the holder, upon the back by which a bill (or cheque) payable to order is transferred from one person to another. The simple signature of an indorser is a valid indorsement, and it is not invalid by reason of its being written in pencil.

" Indorsement " means an indorsement completed by delivery.

It is possible for a signature to be placed upon the back of a cheque and yet not operate as an indorsement. Ali. Justice Byles said in Keene v. Beard (1860, 8C .B.N.S. 372) : " It is true that a man's name and very often is, written on the back of a cheque without any idea of rendering him self liable as an indorser. Indeed, one of the best receipts is the placing on the back of the instrument the name of the person who has received payment of it. Such an entry of the name on the instrument is not an indorsement." The requisites of a valid indorsement are given in Section 32 of the Bills of Exchange Act, 1882 :— " An indorsement in order to operate as a negotiation must comply with the following conditions, namely : " (1) It must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient. An indorsement written on an allonge, or on a ' copy ' of a bill issued or nego tiated in a country where ' copies ' are recognised, is deemed to be written on the bill itself.

" .2' It must be an indorsement of the entire bill. A partial indorsement, that is to say, an indorsement which purports to transfer to the indorsee a part only of the amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill.

" (3 Where a bill is payable to the order of two or more payees or indorsees who are not partners all must indorse, unless the one indorsing has authority to indorse for the others.

" -I \Vbere, in a bill payable to order. the payee or indorsee is wrongly designated, or his name is mis spelt, he may indorse the bill as therein described, adding, if he think fit, his proper signature.

" 15 Where there are two or more indorse ments on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved.

" An indorsement may be made in blank or special. It may also contain terms making it restrictive." There are four kinds of indorsements, a conditional indorsement, an indorsement in blank, a special indorsement , and a restrictive indorsement.

_X cond Atonal indorsk mem is referred to in Section 33 : " Where a bill purports to be indorsed con ditionally the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulfilled or not." An indorsement in blank and a special indorsement are explained in Section 34 : " (1) An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer.

" 21 A special indorsement specifies the person to whom, or to whose order, the bill is to be payable.

" The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement.

a When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by \triting above the indorser's signature a direction to pay the bill to or to the order of himself or some other person." A restrictive indorsement is defined in Section 35 : " (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 pay ment 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.

Page: 1 2 3 4 5