Exam 26: Liability for Negotiable Instruments

Which of the following is NOT one of the five ways to discharge a negotiable instrument?

Verne has possession of a draft that has been validly negotiated to him.His payment process necessarily includes

Conversion means that someone has stolen an instrument or a bank has paid a check that has a forged indorsement.

When a negotiable instrument is transferred,the transferor warrants all of the following EXCEPT

Explain when presentment warranties apply.Identify the presentment warranties on a check and a promissory note.

Paula is a sales agent for The Rock Insurance Company.Paula accepts a check from a customer made payable to her in payment for the premium on an insurance policy.Prior to depositing the check in The Rock's bank account,Paula indorses the check as follows: "The Rock Insurance Company,by Paula Beck,agent." Assuming that Paula has authority to indorse company checks,if the check is dishonored,then between Paula,The Rock,and the bank:

Which of the following parties has primary liability on a draft?

When signing a company check,an agent must clearly indicate that he or she is signing on behalf of the company in order to be free of liability.

Drawers and indorsers are secondarily liable on negotiable instruments.

Which of the following will discharge an instrument?

Dwight Stringer signed three promissory notes as an agent for his company.The first,he signed "Dwight Stringer,agent for Park Systems,Inc." The second,he signed "Dwight Stringer,Agent." The third note was signed merely "Park Systems,Inc." Discuss the liability of Dwight and Park Systems,Inc.on each of the notes.

Lana wrote a check knowing that she did not have sufficient funds in her account.What is this practice called?

Mack writes a check to his maid,Marianne,in payment for services rendered.Marianne indorses the check in blank and gives the check to her masseuse,Janet,in exchange for a neck massage.Without indorsing the check,Janet gives the check to Martin,her newspaper carrier in payment for the next four month's delivery charges.Martin indorses with a special indorsement and negotiates the check to his church,St.Mark.The church indorses the check and deposits it in its bank account.If Mack's bank later dishonors the check,to whom may St.Mark's look for recovery?

Warranty liability is the liability of someone who gives payment on a negotiable instrument.

Generally,indorsers are not liable under signature liability if

Anyone who presents a check for payment makes certain warranties.Which of the following is NOT one of those warranties?

Tom indorsed a check made payable to the order of Tom Jones as follows: Raymond negotiated the check to his landlord for his rent.Raymond indorsed the check as follows: With regard to Tom's indorsement,which statement is correct? Pay Raymond Berry /s/ Tom Jones Without Recourse /s/ Raymond Berry

An accommodation party on a negotiable instrument

The Gulf States Section,PGA,Inc.v.Whitney National Bank of New Orleans case addressed liability on a negotiable instrument

Maurina Barker is an agent of Southland,and she is authorized to sign checks on Southland's bank account.If Maurina signs a check as "Maurina Barker,as agent for Southland" she is not liable on the instrument.