Section 34: Restrictive indorsement

34. Restrictive indorsement (1) An indorsement is restrictive where it prohibits the further negotiation of the bill or expresses that it is a mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof, as for example, if a bill is indorsed “Pay D only”, or “Pay D for the account of X”, or “Pay D or order for collection”. (2) A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorises him to do so. (3) Where a restrictive indorsement authorises further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement.