Exam 26: Liability of Parties

JimBob, a guest in Jimbo's house, opens Jimbo's desk and writes a check to himself on Jimbo's checking account, forging Jimbo's signature.He indorses the check " JimBob Saunders" and presents it to Jimbo's bank for payment.If the bank pays, can it collect from Jimbo's account?

Presentment is a demand made by or on behalf of a person entitled to enforce the instrument for:

An acceptor should always indicate on the instrument the amount accepted.

Any kind of notice of dishonor that informs the recipient of potential liability is sufficient.

When a severe weather warning has been declared, a delay in notice of dishonor is excused to the reasonably diligent holder who was prevented from posting the notice.

An unauthorized signature cannot be ratified by the person whose name appears on the instrument.

Kelly wrote a check to Trish, which Trish immediately changed from $20 to $120.She negotiated the check to Carl for value, who in turn took it to Kelly's bank for certification.Kelly's bank checked her account and certified the check since there were sufficient funds to cover the check.Thereafter, Carl gave the check to General Motors as part of the down payment for his car.G.M.presents the check to Kelly's bank for payment and they discover the alteration.The bank:

Misty wrote a check to Acme for $220.She is discharged from liability on the check if Acme does not present the check for payment within 30 days after the date the check was signed.

Mark gives a bearer note for $50 to Joe in exchange for an excellent dinner at Joe's restaurant.Joe delivers the note to Sue for $50 and Sue takes it to Mark to be paid.If Mark says the note was originally written for only $5, what can Sue do?

An unauthorized signature may bind a principal who allowed the signature to be made through his own negligence.

By indorsing a check, "Without recourse," Pat effectively disclaims both contractual and warranty liability.

The drawer is obligated to pay the draft only if the drawee fails to pay the instrument.

Zelda signs a promissory note for $2,500 to First Bank.At the request of both Zelda and the bank, Ann also signs the note as an accommodation maker.In this situation:

Zoron Company purchased a truck from Ace Motors.The sales personnel at Ace know that Anton Green is an executive at Zoron.To pay for the truck, Anton delivered a $26,000 note to Ace and signed it "Anton Green, Agent." In this case:

Notice of dishonor of an instrument must be given:

A drawee bank's refusal to certify a check constitutes dishonor of the instrument.

Parties with secondary liability unconditionally promise to pay the instrument.

Sarah has a checking account at First Bank.Orrin steals one of her blank checks, writes a check for $250, and then forges Sarah's signature.He then presents the check to First Bank for payment.First Bank pays the forged instrument.Which of the following statements is correct?

An accommodation maker is not liable on a note since he only agreed to sign as a favor to the maker.

Jan Arthur writes a $200 check to Bruce Nole who indorses it "Bruce Nole." Bruce gives the check to Anne Tate who indorses it "Without Recourse.Anne Tate." Anne sends the check to Joe Black, MD to pay her medical bill.If the bank refuses to honor the check, Black: