Exam 28: Transfers of Negotiable Instruments and Warranties of Parties

A __________ indorsement consists of the signature of the indorser and words specifying the person to whom the indorser makes the instrument payable.

A qualified indorsement is given by using the phrase __________.

When the indorser merely signs a negotiable instrument,the indorsement is called a __________ indorsement.

An instrument may be transferred only by negotiation.

Coppersmith executed and delivered negotiable notes to the payee,Charlene.The payee indorsed the notes to Whitehurst but did not deliver them.Instead,she kept the notes in her possession because she wanted to collect the interest during her life and wanted the indorsee to have the notes on her death.After Charlene's death,her executor,Cartwright,found the notes.Both Cartwright and Whitehurst sought to enforce the notes against Coppersmith.Who was entitled to do so?

The situation in which an individual impersonates the holder of a savings account and,by presenting a forged withdrawal slip to the savings bank,receives from the bank a check payable to the bank's customer,is covered by the:

A person who acquires the instrument on which the last indorsement is blank becomes a holder in due course.

An ordinary holder of an instrument has immunity from certain defenses that might have been asserted against the transferor.

The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed:

If a lost instrument is order paper,the finder __________.

When the negotiable instrument is negotiated by delivery without indorsement,the warranty liability of the transferor runs only to the immediate transferee.

An instrument can be delivered by constructive delivery,in which the transferee has exclusive access to the instrument.

Sue is an employee at an ABC store.One of Sue's duties is to prepare the bank deposit at the end of the business day.Sue had a very busy day and made a few mistakes.All of the checks,except two,were indorsed with the stamp "ABC,Inc." that ABC had provided.The bank received the deposit and noticed the lack of indorsement on the two checks.In addition,three of the checks that Sue was to include with the deposit were lost in the parking lot after closing.Phil found the checks and deposited them into his personal account.What is the effect of ABC's indorsement on the lost checks and the lack of indorsement on the two deposited checks?

The warranties made by an unqualified indorser guarantee that payment of the instrument will be made.

If an instrument is payable to alternative payees,it may be indorsed and delivered by either of them.

A restrictive indorsement specifies the purpose of the indorsement or the use to be made of the paper.

A blank indorsement indicates the person to whom the instrument is to be paid-that is,the transferee.

The order or bearer character of a paper is determined as of the time the negotiation takes place.

Thomas,the holder of a check,presents it to the drawee bank for payment.If Thomas indorses the check,Thomas warrants that the account of the drawer in the drawee bank contains funds sufficient to cover the check.

The order or bearer character of the paper determines how it may be: