Negotiable Instruments Act Section 121 — Estoppel against denying capacity of payee to indorse

CHAPTER XIII S P E C I A L R U L E S O F E V I D E N C E

General

Summary

A person who makes a promissory note or accepts a bill of exchange that is payable to order cannot, in a lawsuit brought by a holder in due course, claim that the payee did not have the legal ability to endorse the note or bill on the date it was made. This rule applies only in such a suit and only against that maker or acceptor.

Official Text

No maker of a promissory note and no acceptor of a bill of exchange 2[payable to order] shall, in a suit thereon by a holder in due course, be permitted to deny the payee's capacity, at the date of the note or bill, to indorse the same.