Distinction between Liability of Drawer, Acceptor and Maker

Though both the maker of a promissory note and the drawer of a bill are both creditors, the nature of their liability differs. 

The liability of the maker of a promissory note, like that of the acceptor of a bill, is unconditional. 




The liability of the drawer of a bill, like that of an endorser, is conditional and it arises in the event of the bill being dishonoured. 

The acceptor of a bill and the maker of a promissory note has similar engagements. The acceptor of a bill, by accepting the bill, undertakes that he will make payment according to his acceptance. Similarly, the maker of a promote, by making it, undertakes that he will pay it according to its tenor. 

As already stated, both the maker and the acceptor are the parties primarily liable under the note or the bill. The liability is absolute and unconditional, and is not dependent on any notice of dishonour. The liability of the acceptor is not affected by reason of the death or insolvency of the drawer. His liability is also not affected by the fact that he is unable to receive goods owing to the intervention of war in respect of which we gave his acceptance in the instrument.


Parties to Suits

The question may arise as to who are the proper parties to a suit brought for indemnification on a negotiable instrument. Section 32 declares that, in the absence of a contract to the contrary, the maker of a promissory note and the acceptor before maturity of a bill of exchange are bound to pay the amount thereof at its maturity according to the apparent tenor of the note or bill. In default of such payment, such maker or acceptor is bound to compensate the party to the note or bill for any loss or damage sustained by him and caused by such default. Section 37 of the Act states that the maker of a promissory note or cheques, the drawer of a bill until acceptance, and the acceptor of a bill are liable thereon as principal debtors, and the other parties thereto are liable thereon as sureties. Section 38 provides that, as between the parties so liable as sureties, each prior party is also liable thereon as a principal debtor in respect of each subsequent party. As between the maker and endorser, the endorser is liable as a surety, the maker being liable as principal debtor. Therefore, if a holder realises money from the endorser, the endorser can proceed against the maker as principal debtor liable to indemnify him.


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