Beruflich Dokumente
Kultur Dokumente
(a) If the instrument is payable to the order of a third person, he is APPLICATION OF SECTION 66
liable to the payee and to all subsequent parties. • Deals with the liability or warranties of one negotiating by general
indorsement, as distinguished from qualified indorsers or persons
(b) If the instrument is payable to the order of the maker or negotiating by mere delivery
drawer, or is payable to bearer, he is liable to all parties • It has been held that this section includes an indorser for collection
subsequent to the maker or drawer.
LIABILITY OF GENERAL INDORSER
(c) If he signs for the accommodation of the payee, he is liable to all 1. That the instrument is genuine and in all respects what it purports to be
parties subsequent to the payee. 2. That he has a good title to it
3. That all prior parties had capacity to contract
IRREGULAR INDORSEMENT 4. And that the instrument is, at the time of his indorsement, valid and
• An irregular indorser is one who not otherwise a party to an subsisting
instrument, places his signature thereon his signature in blank before
delivery FOURTH WARRANTY OF GENERAL INDORSER
IRREGULAR INDORSEMENT AND QUALIFIED INDORSER, DISTINGUISHED
• While the qualified indorser or person negotiating by delivery warrants
• Its an indorsement in an unusual, peculiar, or singular manner that he is ignorant of any fact that will render the instrument valueless or
• His name appears where he would naturally expect another name impair its validity, the general indorser warrants that the instrument
he is indorsing is valid and subsisting regardless of whether he is
BEFORE DELIVERY ignorant of that fact or not
• It means the initial delivery
• Provision doesn’t apply if the signature was placed after delivery THE WARRANTIES OF A GENERAL INDORSER
EXTEND TO THE FOLLOWING
1. Holders in due course
2. Persons who derive their title from holders in due course
Liability of general indorser - Negotiable 3. Immediate transferees even if they are not holders in due course
Instruments
Sec. 66. Liability of general indorser. - Every indorser who indorses WARRANTIES DON’T EXTEND TO DRAWEE
without qualification, warrants to all subsequent holders in due • The indorser of a check doesn’t warrant the genuineness of the
course: (holders in good faith) drawer’s signature to the drawee who pays it since the drawee is not a holder
in due course
(a) The matters and things mentioned in subdivisions (a), (b), and • The warranties provided do not run in favor of the drawee in respect to
(c) of the next preceding section; and the genuineness of the drawer’s signature but only in favor of
subsequent holders in due course
(b) That the instrument is, at the time of his indorsement, valid and OTHER LIABILITY OF GENERAL INDORSER
subsisting; • He engages that, on due presentment, it shall be accepted or paid, or
both, as the case may be, according to its tenor, and that if it be
And, in addition, he engages that, on due presentment, it shall be dishonored and the necessary proceedings of dishonor be duly taken,
accepted or paid, or both, as the case may be, according to its he will pay the amount to the holder, or to any subsequent indorser
who may be compelled to pay it