Estoppel against denying signature or capacity of prior party
Full Text
Estoppel against denying signature or capacity of prior party.—No indorser of a negotiable instrument shall, in a suit thereon by a subsequent holder, be permitted to deny the signature or capacity to contract of any prior party to the instrument.
Plain English Summary
Estops an endorser from challenging the authenticity of signatures or legal contractual capacity of any party prior to them on the instrument.
Key Legal Elements
- Applies to any endorser of a negotiable instrument
- Operates in suits brought by any subsequent holder
- Estoppel covers both genuineness of prior signatures and contractual capacity of prior parties
Practical Note
By endorsing and passing an instrument down the trade line, each endorser warrants to subsequent holders that all prior signatures and endorsements are genuine and legally valid. Even if a prior signature turns out to be forged, the endorser who transferred the instrument remains strictly liable to subsequent holders.
हिंदी पाठ
पूर्ववर्ती पक्षकार के हस्ताक्षर या संविदा करने की सक्षमता से इनकार करने के विरुद्ध विबंध।—परक्राम्य लिखत के किसी भी पृष्ठांकक को, किसी पश्चात्वर्ती धारक द्वारा लाए गए वाद में, लिखत के किसी भी पूर्ववर्ती पक्षकार के हस्ताक्षर या संविदा करने की सक्षमता से इनकार करने की अनुमति नहीं दी जाएगी।