NIA 38 — Prior party a principal in respect of each subsequent party

Negotiable Instruments Act, 1881

Statutory text

As between the parties so liable
as  sureties,  each  prior  party  is,  in  the  absence  of  a  contract  to  the  contrary,  also  liable  thereon  as  a principal debtor in respect of each subsequent party.
Illustration A  draws  a  bill  payable  to  his  own  order  on  B,  who  accepts.  A  afterwards  indorses  the  bill  to  C,  C  to  D,  and  D  to  E.  As between E and B, B is the principal debtor, and A, C and D are his sureties. As between E and A, A is the principal debtor, and C
and D are his sureties. As between E and C, C is the principal debtor and D is his surety.

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