40. Discharge of endorser’s
liability.- Where the holder of a negotiable instrument,
without the consent of the endorser, destroys or impairs the
endorser’s remedy against a prior party, the endorser
is discharged from liability to the holder to the same extent
as if the instrument had been paid at maturity.
Illustration
A is the holder of a bill of exchange made payable to the
order of B, which contains the following endorsements in blank
First endorsement, “B”.
Second endorsement, “Peter Williams”.
Third endorsement, “Wright & Co.”.
Fourth endorsement “John Rozario”.
This bill A puts in suit against John Rozarlo and strikes
out, without John Rozario’s consent, the endorsements
by Peter Williams and Wright & Co. A is not entitled to
recover anything from John Rozario.
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