COMMERCIAL LAW ā Bills of Exchange ā Liability of an Endorser is Equivalent to a New Drawer
Principle Statement
Every endorser of a bill is in the nature of a new drawer, and is liable to every proceeding holder in default of acceptance or payment by the drawer.
Ratio Decidendi (Source)
Per Onu, JSC, in Auto Import Export v. Adebayo (2005) NLC-491997(SC) at p. 30; Paras DāE.
"Every indorser of a bill is in the nature of a new drawer, and is liable to every proceeding holder in default of acceptence or payment by the drawer."
Explanation / Scope
An endorser assumes liability equivalent to that of a new drawer on the bill. The endorser is liable to any subsequent holder if the drawer defaults on acceptance or payment. The principle applies to commercial law and bills of exchange. The rule ensures the bill’s negotiability and security for holders. Each endorsement adds a new layer of liability. The endorser cannot escape liability by claiming derivative status.
