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Section 38: Prior party a principal in respect of each subsequent party.

The Negotiable Instruments Act, 1881Central Act · Act 26 of 1881

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.

Where this provision sits

ActThe Negotiable Instruments Act, 1881
Section38
Marginal notePrior party a principal in respect of each subsequent party.
JurisdictionCentral
StatusIn force as published by the source
Judgments citing it2

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