Section 38
Prior party a principal in respect of each subsequent party.
The Negotiable Instruments Act, 1881
About this Act
An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques.
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.
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.