Question 142. - Bank A sent a demand draft made payable to their own order and not endorsed by them to bank B for collection. Bank B presented to drawees who accepted draft payable at bank C, to whom it was duly presented and accepted, but was refused by them when sent in on deposit and marked "not endorsed." Bank B claims that drawees when they accepted the draft took the responsibility of its not being endorsed and that bank C could not refuse payment, having already accepted it. Bank C claims it was only an order to pay when endorsed and in order, the same as a cheque, and that their acceptance stamp only signified that they held funds. Which bank is correct?

Answer. - Bank C is right; they would not be justified in paying without endorsement, and their certification could not be taken to mean more than that they would pay the item when it was completed by endorsement.