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negotiable-instruments:instrument-indorsed-by-deceased

Legal representative cannot by delivery only negotiate instrument indorsed by deceased

Section 57 of the Negotiable Instruments Act,1881.

The legal representative of a deceased person cannot negotiate by delivery only a promissory note, bill of exchange or cheque payable to order and indorsed by the deceased but not delivered.

In the case of an instrument payable to order, endorsement and delivery are both necessary for negotiation. It may so happen that a person endorses a note but dies before delivery. Can his legal representatives complete the contract by doing what remained to be done by their predecessor ie by delivering the note to the endorsee? No, the section enjoins that such negotiation will be invalid. The legal representatives of the deceased who succeed to the property in the note have to negotiate it by fresh endorsement and delivery. In other words in such cases endorsement by the legal representatives before delivery is necessary for negotiation. The legal representatives, which means the sole heir, or if more than one, the whole body of heirs, executors or administrators of the deceased, can by the indorsement exclude their personal liability, otherwise they will be personally liable. A legatee is not a legal representative. The legal representative is not an agent of the deceased. A legatee, therefore, cannot acquire any interest in a promissory note executed in favour of an executor who, after his discharge, hands it over to the legatee without an endorsement, as transfer without endorsement does not convey any interest, the property remains in the legal representative and the legatee not being a holder cannot endorse. Where, however, an instrument is delivered by a person before death without making any endorsement the legal representatives can be compelled by suit to make the endorsement. A trustee can endorse, or can sue on a promissory note in favour of his predecessor in title without assignment or endorsement, as a trustee is a legal representative.

Created on 2021/02/17 07:54 by LawPage • Last modified on 2021/02/17 07:54 by LawPage