Prior party a principal in respect of each subsequent party
Full Text
Prior party a principal in respect of each subsequent party.—As between the parties so liable as sureties, each prior party is, in the absence of a contract to the contrary, also liable thereon as a principal debtor in respect of each subsequent party.
Illustration
A draws a bill payable to his own order on B, who accepts. A afterwards indorses the bill to C, C to D, and D to E. As between E and B, B is the principal debtor, and A, C and D are his sureties. As between E and A, A is the principal debtor, and C and D are his sureties. As between E and C, C is the principal debtor and D is his surety.
Plain English Summary
Provides that among parties liable as sureties, each prior party acts as a principal debtor to all subsequent parties, illustrated by an endorsement chain.
Key Legal Elements
- Applies between parties liable as sureties
- Each prior party is liable as a principal debtor in respect of each subsequent party
- Allows a subsequent party who paid the debt to recover it from any prior party
Practical Note
Creates a hierarchical ladder of liability. If an endorser down the chain pays the holder, they can sue any of the endorsers above them, as those prior endorsers are considered principal debtors in relation to them.
हिंदी पाठ
प्रत्येक उत्तरवर्ती पक्ष के संबंध में पूर्ववर्ती पक्ष प्रधान ऋणी के रूप में।—प्रतिभू (sureties) के रूप में उत्तरदायी पक्षों के बीच, विपरीत अनुबंध के अभाव में, प्रत्येक पूर्ववर्ती पक्ष (prior party) प्रत्येक उत्तरवर्ती पक्ष (subsequent party) के संबंध में प्रधान ऋणी (principal debtor) के रूप में भी उत्तरदायी होता है।
दृष्टांत
क, ख पर अपने स्वयं के आदेश पर देय एक बिल लिखता है, जिसे ख स्वीकार करता है। क बाद में बिल को ग को, ग घ को, और घ ङ को पृष्ठांकित करता है। ङ और ख के बीच, ख प्रधान ऋणी है, और क, ग और घ उसके प्रतिभू (जमानतदार) हैं। ङ और क के बीच, क प्रधान ऋणी है, और ग तथा घ उसके प्रतिभू हैं। ङ और ग के बीच, ग प्रधान ऋणी है और घ उसका प्रतिभू है।