Acceptor bound, although indorsement forged
Full Text
Acceptor bound, although indorsement forged.—An acceptor of a bill of exchange already indorsed is not relieved from liability by reason that such indorsement is forged, if he knew or had reason to believe the indorsement to be forged when he accepted the bill.
Plain English Summary
Holds the acceptor of a bill of exchange liable even if an endorsement is forged, provided the acceptor knew or suspected the forgery at the time of acceptance.
Key Legal Elements
- Applies to an acceptor of a bill of exchange already endorsed
- Forged endorsement does not relieve the acceptor from liability
- Applies only if the acceptor knew or had reason to believe the endorsement was forged at the time of acceptance
Practical Note
Limits the defense of forgery for acceptors. Typically, a forged endorsement passes no title (nullity). However, under Section 41, if the acceptor accepts the bill knowing of the forgery, they are estopped from using it as a defense to escape liability.
हिंदी पाठ
पृष्ठांकन जाली होने पर भी स्वीकर्ता बाध्य है।—पहले से पृष्ठांकित विनिमय-पत्र का स्वीकर्ता (acceptor) केवल इस कारण से दायित्व से मुक्त नहीं होता है कि ऐसा पृष्ठांकन जाली है, यदि वह बिल स्वीकार करते समय यह जानता था या उसके पास यह विश्वास करने का कारण था कि वह पृष्ठांकन जाली था।