Effect of endorsement in full after a blank one and for part of sum due

Effect of endorsement in full after a blank one (Section 54 and 55): An instrument endorsed in blank is payable to the bearer, although originally it was payable to order. If an instrument after having been endorsed in blank is endorsed in full, the endorsee in full does not incur the liability of an endorser, so the amount of it cannot be claimed from him. In other words if an endorsement in blank is followed by an endorsement in full, the instrument still remains payable to bearer and negotiable by delivery as against all parties prior to the endorse in full, though the endorser in full is only liable to a holder who made title directly through his endorsement and the persons deriving title through such holder. For example, X is the payee holder of a bill of exchange X endorsee it in blasnk and delivers it to Y who endorses it in full to Z or order Z, without endorsement, transfers the bill to F. In view of Section 55, F as the bearer of the instrument can receive payment or sue the drawer, acceptor or X but not Y or Z who is a subsequent but not a prior party. But there is an exception to this rule. The person to whom it has been endorsed in full, or any one who derives title through him, can claim the amount from the endorser in full.

Effect of endorsement for part of sum due (Section 56): An endorsement purposing to transfer only a part of the amount of instrument is invalid, and the endorsee, therefore cannot negotiate it. But when the amount due has been paid in part, a note to that effect may be endorsed on instrument and the instrument may then be negotiated from the balance.