Estoppel against denying capacity of payee to indorse
Full Text
Estoppel against denying capacity of payee to indorse.—No maker of a promissory note and no acceptor of a bill of exchange payable to order shall, in a suit thereon by a holder in due course, be permitted to deny the payee's capacity, at the date of the note or bill, to indorse the same.
Plain English Summary
Prevents makers and acceptors from disputing the payee's legal competence to endorse the instrument as of the date it was issued in a suit by a holder in due course.
Key Legal Elements
- Applies to makers of promissory notes and acceptors of order bills
- Operates in favour of a holder in due course
- Estoppel against denying payee's capacity to indorse as of instrument's date
Practical Note
Crucial when an instrument was issued to a minor, an unincorporated association, or an authorized corporate representative. By drawing or accepting the instrument payable to that entity, the maker or acceptor representations to the commercial world that the payee has capacity to indorse it.
हिंदी पाठ
पृष्ठांकन करने के लिए आदाता की सक्षमता से इनकार करने के विरुद्ध विबंध।—आदेशानुसार देय वचन-पत्र के किसी रचयिता और विनिमय-पत्र के किसी प्रतिग्रहीता को, सम्यक्-अनुक्रम-धारक द्वारा लाए गए वाद में, नोट या बिल की तारीख पर पृष्ठांकन करने की आदाता की क्षमता से इनकार करने की अनुमति नहीं दी जाएगी।