The endorsement of a promissory note transfers the property and the right to recover the amount due to the endorsee. The death of the endorser does not affect this right, and the endorsee can continue the suit.

CHANDRA REDDY, C. J.

( 1 ) THE problem that poses itself before me in this civil revision petition is an interesting one and impinges on the effect of the death of the endorser of a promissory note on a suit instituted by the endorsee for collection on the basis of the promissory note.

( 2 ) THE defendant in S. C. No. 373 of 1958 on the file of the Additional Munsif-Magistrate Tenali, is the petitioner before me. He executed, a promissory note on 26-7-1956 in favour of one Konda Chellamma for Rs. 250. 00 payable with interest at nine per cent per annum. Chellamma endorsed this promissory note in favour of the respondent for collection. After the institution of the suit by the respondent, the endorser, Chellamma, passed away. Thereupon, the petitioner pleaded that the suit has abated by reason of the death of the endorser which has resulted in the termination of the authority of the plaintiff to continue the suit. We are here unconcerned with other defences as nothing turns upon them and as the arguments addressed by the learned counsel for the petitioner bear only on the effect of the death of the endorser of the promissory note.

( 3 ) THIS objection of the defendant did not find favour with the trial Court with the result the suit was decreed as prayed for.

( 4 ) IN this revision petition, it is this view of the Munsif-Magistrate that is challenged by the learned counsel for the petitioner. The contention advanced by Sri A. V. Krishnarao is that since the relationship between the endorser and the endorsee for collection could be equated to that of principal and agent, this jural relations ceased with the death of the endorser with the consequence that the endorsee could not continue the suit and it is only the legal representatives of the endorser that could continue it. I find it difficult to accede to this proposition.

( 5 ) A perusal of the relevant sections of the Negotiable Instruments Act (XXVI of 1881) would enable me to reject this contention. Section 8 of the Act in so far as it is relevant for this enquiry recites: "the holder of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. XX XX

( 6 ) IT is plain that the endorsee of a promissory note who is the holder of the document, could maintain the action in his own name for the purpose of recovering the amount due thereon.

( 7 ) I shall now turn to Section 50 which is pertinent in this enquiry. It recites: "the indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein with the right of further negotiation; but the indorsement may, by express words, restrict or exclude such right, or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser or for some other specified person. " This section postulates that the title in the document passes to the endorsee. But when the endorsement is retricted to the receipt of the contents, the endorser will continue to be the beneficial owner thereof and the endorsee is liable to account for the former. The fact that it was a restrictive endorsement would not make any difference so far as the legal title of the endorsee in the note is concerned. The endorsement clothes the endorsee with the right to lay the action on the foot of the promissory note, (sic) collect the amount though he has to make over the proceeds after the collection. Since the effect of the endorsement is to vest the transferee with the right of the transferor, the death of the endorser would not put an end to the right of the transferee to continue the suit.

( 8 ) I shall next extract Section 78, which throws light on this enquiry, "subject to the provisions of Section 82, clause (c) payment of the amount due on a promissory note, bill of exchange or cheque must, in order to discharge the maker or acceptor, be made to the holder

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