Exam 27: Transfer and Holder in Due Course

Which of the following are not types of restrictive indorsements?

Is the negotiation of an instrument ever valid even though the transaction in which it occurs is voidable or even void? Explain.

Subsequent indorsers are always bound by an indorsement in trust.

A payee may be a holder in due course under the Code.

A holder in due course would have the right to collect from the original maker of an instrument even if the maker had a valid personal defense.

A check is made payable "to the order of Sam Johnson." If this check is indorsed by Sam Johnson and given to Alex,Alex becomes the holder of the instrument.

The "impostor rule" is an exception to the general rule that negotiation of an order instrument requires a valid indorsement by the person to whose order the instrument is payable.

An indorsement must be written within 1 1/2 inches of the trailing edge of the back of the check or negotiability is destroyed.

Delivery alone is insufficient to negotiate an instrument when it is payable to:

A holder in due course could recover from the maker where the:

Steve issues a negotiable promissory note to Bob in exchange for Bob's promise to build an addition to Steve's home.The promissory note indicates this reason when Bob negotiates it to Willard for value.Can Willard be a holder in due course?

A mere holder or an assignee takes a negotiable instrument subject to all claims and defenses to it.

Which of the following is not a restrictive indorsement?

The customary manner of disclaiming the indorser's contractual liability is to add which of the following sets of words before or after his signature?

The status of holder in due course was created to encourage the free transferability of negotiable instruments.

If there is no indorsee designated on an indorsement bearing only the indorser's signature,it is a(n):

Miller does the payroll for Phoenix Company.In between Adams and Bates,he inserts the name Appleton and makes out a weekly paycheck in that name.He keeps the check for himself,signing "Appleton" and cashing it at a local bank.Auditors discovered the fake payee many months later.May Phoenix require the bank to recredit?

Which of the following is a special indorsement?

A Federal Trade Commission rule limits the rights of a holder in due course of an instrument that evidences a debt arising out of a(n):

Laura is in possession of a check which contains the following indorsement,"Juliet Grant,without recourse,for collection only." The indorsement would be classified as: