Definition of Indorsement


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historic definition...

Indorsement -- to the bank for collection the day it is received by the payee (the one to whom the amount of it is to be paid) it must be presented the following day. In case the payee does not reside in the place where is situated the bank upon which the check is drawn the payee must transmit it for collection not later than the hour for the closing of the last mail on the day following the day on which he received it. A bank receiving it for collection must forward it on the day of its receipt. To send it through various banks or through parties in various places constitutes negligence if the time of presentation is thereby delayed. When a maker of a promissory note is in default the indorser is absolved from responsibility for payment in case he wrote before his name at the time of the indorsement "Without recourse to." An indorser of a promissory note is exempt from liability if notice of its dishonor is not mailed to or served upon him within 24 hours of its non-payment. When a promissory note is discounted by a bank with which the maker has an account the amount of the note must be charged against the account, otherwise the indorsers, if there be any, are released from responsibility.

historic accounting definition (British)...

Indorsement -- This word is used in two senses. In the first it signifies the act of writing on the back of any document, and in the second it means the matter which is there written. By writing his name upon the back of any document, the person who does so identifies himself with it in some manner or other. But the most common way in which indorsements become of importance is when the documents dealt with are negotiable instruments or instruments indicating the title of some person or persons to certain things named therein. By indorsing, for instance, a bill of exchange or promissory note, the indorser makes himself a party to the same, and incurs certain liabilities, unless the bill or note is an accommodation one, by the mere fact of indorsement coupled with delivery, whether he receives any consideration for the same or not. Again, the holder of a bill of lading, which is not a negotiable instrument but a document of title, by indorsing the same and delivering it to another person indicates primd facie that he has passed the property and all right in the goods named in the bill to the transferee which he, the indorser, possessed.

It has been held that the writing upon the face of a document may have the same effect as an indorsement, in the same way that an acceptance of a bill of exchange may be good although written upon the back of the bill. It is, however, not advisable to cultivate eccentricity in commercial transactions.

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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".

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