Endorsement vs. Assignment of Credit: Key Differences Explained

Posted on Mar 29, 2025 in Commercial and Financial Management

Endorsement vs. Assignment of Credit: Key Differences

Autonomy and Abstraction

Assignment of Credit

  • As a rule, is “pro solute” but not “pro solver.”
  • The originating lender is accountable to the new lender for the existence of credit.
  • Enforceability exceptions are personal.

Endorsements

  • Is “pro solute” and also “pro solver.”
  • The originating lender responds to the endorsee for solvency.
  • Unavailability of personal exceptions.

Beware of exceptions personal effects in good faith.

Acts of “Endorsement” That Are Actually Transferred (Civil) Credit

These will have the legal effect of its circulation when:

  1. “Endorsement” in order not to the nominative, circulation, and transfer of credit.
  2. “Endorsement” after protest for non-payment (posthumous endorsement). Posthumus. Not a Cambiário act, but an act of free credit transfer.

Endorsement Place to Express in the Title

  1. On the back, simply by the signature of the endorser.
  2. In front (obverse), with more signing statement “by endorsement” (or their equivalent). If you are in front, the expression should be expressly endorsement.

Endorsements: White X in Black

  1. Blank – does not indicate the endorsee.
  2. Black – indicates the endorsee.

Improper Endorsement

Transfers possession of the instrument, but without transferring the right to claim it represented. The endorsee may not recover the amount.

Endorsement-Term

Authorizes 3 to recover the amount.

Endorsement Bond

Transfers ownership of the document provided a guarantee obligation.

Endorsement: Concept and Legal Business

  • Concept: Cambiário act by which a person provides some of the obligations represented in CT.
  • Legal business: “Cousin” of the bail, in civil law.

Characters: Rate x Endorsed

Rate (who knows) x Endorsed (who gets the guarantee – the debtor)

Advance Approval

  • Figure specific to the drawee. It was shown before accepted.
  • Given to the drawee BEFORE accepted; It is therefore anticipated.
  • Even if the drawee does not accept a guarantor answer, the order, the guarantor remains bound in CT (principle of autonomy).
  • In this case, the charge on appeal in accordance with civil law (not exchange) (Due to the principle of literalness). Against the drawee not accepted.

Approval and Blank in Black

  • Blank: without giving endorsed – is assumed to be the drawee.
  • Black: indicates endorsed.

Place to Express Approval

  1. On the front (obverse): simple signature; This is the rule.
  2. On the back: signature represents the expression “by endorsement” (or equivalent). It should be equivalent to opposing the endorsement.

Note: If the signature is on the front of the drawee, it is accepted. If another person is endorsed.

Basic Difference Between Aval (Right Cambiário) and Bond (Civil Law)

  • Guarantor is not supportive (by law, is not sympathetic, could do so by the contract, which is common in day-to-day). Loan is supportive (by law).
  • Consequently, the benefit is guarantor of order has no co-signer.