50: Effect of indorsement

Effect of indorsement.―(1) Subject to the provisions of this Act relating to restrictive, conditional and qualified indorsement, the indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with the right of further negotiation. (2) An indorsement is restrictive which either― (a) restricts or excludes the right to further negotiate the instrument; or (b) constitutes the indorsee an agent of the indorser to indorse the instrument or to receive its contents for the indorser or for some other specified person: Provided that the mere absence of words implying right to negotiate does not make the indorsement restrictive.] Illustrations B signs the following indorsements on different negotiable instruments payable to bearer :— (a) “Pay the contents to C only.” (b) “Pay C for my use.” (c) “Pay C or order for the account of B.” (d) “The within must be credited to C.” These indorsements exclude the right of further negotiation by C. (e) “Pay C.” (f) “Pay C value in account with the Oriental Bank.” (g) “Pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others.” These indorsements do not exclude the right of further negotiation by C.

Effective date: 1881-12-09

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