Striking out indorsement - Negotiable Instruments

: Category: Law on Negotiable Instruments; 14 December 2008; Hits: 10151

Sec. 48. Striking out indorsement. - The holder may at any time strike out any indorsement which is not necessary to his title. The indorser whose indorsement is struck out, and all indorsers subsequent to him, are thereby relieved from liability on the instrument.

WHEN HOLDER MAY OR MAY NOT STRIKE OUT INDORSEMENT

• But where the instrument is transferred by special indorsement, the holder has no right to strike out the name of the person mentioned in such indorsement and insert his own name in place thereof; nor can he strike out such name and convert such special indorsement into a blank indorsement
• The holder who acquires title subsequent to the succeeding special indorsement must trace his title not only through the blank indorsement but through the special indorsement as well

EFFECT OF STRIKING OUT

1. The indorser whose indorsement is struck out is relieved from his liability on the instrument
2. All subsequent indorsers are also relieved from their liability on the instrument