Endorse
Passing a bill on. The simplest of the transfers: one block, no waiting state, no payment.
Who may perform it
The holder, who becomes the endorser of this endorsement.
Conditions
- The default rule: the bill can't be blocked, recoursed to the end, only recoursable, or paid.
That is all. Endorsement does not require the bill to be accepted, does not set a deadline, and does not wait for anything, which is what makes it the mechanism by which a bill circulates as money rather than as a contract to be renegotiated at each step.
Result
An Endorse block. The endorsee becomes the holder and inherits every holder action. The endorsements count increases by one.
The endorser becomes a contingent participant: no longer able to act on the bill, but still liable on it.
Why endorsing is not free
Each endorser adds their own liability. A bill that has passed through five hands carries five independent obligations to pay, and if the drawee dishonours it, the holder can claim against earlier holders rather than being left with a bad debt.
That is the reason a circulated bill is better security than a fresh one, and the reason recourse has an order to it: the claim travels back along the chain of people who each, by endorsing, accepted that risk.
So an endorsement is a payment and a guarantee at once. The endorser has settled their own debt with the instrument, and has underwritten it in doing so.
Endorsing back to an earlier participant
Nothing prevents a bill being endorsed back to someone who held it before, including the drawee. Two consequences:
- If the endorsee is the drawee, that identity now holds both holder and payer roles and gets both sets of actions: they can request acceptance and then accept.
- For recourse, a participant can only claim against holders who held the bill before their own first time holding it. Coming back round the chain does not enlarge the set of people you can recourse against.