Exam 26: Liability For Negotiable Instruments

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

Generally,indorsers are not liable under signature liability if:

When a person indorses a check,the indorser assumes contractual liability based on the indorsement.This liability expires unless presentment is made:

Jessie is the maker of a $1000 promissory note in favor of Tyler.Tyler subsequently indorses the note to Ryan by signing just his name.Ryan in turn indorses it to Breanna by indorsing the back of the note,"Without recourse,Ryan." Breanna then indorses it to Liz,the present holder,with a special indorsement. If the note is dishonored by Jessie after it is properly presented to her for payment by Liz,then Liz,after giving timely notice to Tyler,Ryan,and Breanna,may collect payment under signature liability from:

Olga draws a check payable to Sven.Sven indorses the back of the check "without recourse" and negotiates the check to Hansel who in turn negotiates the check by a blank indorsement and delivers the check to Gretta.Gretta deposits the check in her checking account.If the bank dishonors the check because Olga has filed for bankruptcy,and returns the check to Gretta,who has liability on the check?

Mona co-signs a promissory note with her daughter Beth so Beth can purchase her first car.Mona will be discharged from her obligation on the note:

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

A drawee has primarily liability on a draft.

Jessie is the maker of a $1000 promissory note in favor of Tyler.Tyler subsequently indorses the note to Ryan by signing just his name.Ryan in turn indorses it to Breanna by indorsing the back of the note,"Without recourse,Ryan." Breanna then indorses it to Liz,the present holder,with a special indorsement. If Liz collects payment from Tyler,then Tyler can demand payment from:

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

A check was indorsed as follows: Jessica Hall without recourse Paul Samuels Collection guaranteed Melissa Liston Which of the following will discharge all of the indorsers?

Micah signed a check in the lower right-hand corner and Andrew signed on the back.The presumption is that:

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?

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

In the case of In re Couchot,the court held that Kathy Couchot:

Lance indorses a promissory note to Connie in exchange for consideration.Unknown to Lance,the note is not good because the maker's signature was forged.Connie later attempts to present the instrument for payment to the original alleged maker,Lilly,who is able to deny liability for payment due to the forged signature.Connie may later sue Lance for breach of a transfer warranty.

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

An accommodation party on a negotiable instrument:

Cecilia made a check out to Gideon for $15.Gideon fraudulently changed the check to read $150,and cashed it at Corner Bank.Is Cecilia discharged from liability on the check?

Drawers and indorsers are secondarily liable on negotiable instruments.