The Negotiable Instruments Act, 1881
40. Discharge of endorser’s liability.-
Where the holder of a negotiable instrument, without the consent of the endorser, destroys or impairs the endorser’s remedy against a prior party, the endorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity.
Illustration
A is the holder of a bill of exchange made payable to the order of B, which contains the following endorsements in blank-
First endorsement, “B”.
Second endorsement, “Peter Williams”.
Third endorsement, “Wright & Co.”.
Fourth endorsement “John Rozario”.
This bill A puts in suit against John Rozario and strikes out, without John Rosario’s consent, the endorsements by Peter Williams and Wright & Co. A is not entitled to recover any thing from John Rozario.
The Negotiable Instruments Act, 1881
