Exam 29: Transfers of Negotiable Instruments and Warranties of Parties

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

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?

If a lost negotiable instrument is in bearer form at the time of the loss,the finder is entitled to enforce payment.

Bearer paper may only be negotiated by the actual transfer of possession of the instrument.

A holder is also known as an assignee of the paper

An instrument that originally was bearer paper always remains bearer paper.

It is worse for the holder to lose order paper than to lose bearer paper.

If an instrument is drawn in favor of an officer of a named corporation,the instrument is payable to the corporation,the officer,or any successor to such officer.

Clark is the senior payroll clerk for Gonzalez Corporation.When preparing the weekly payroll,Clark added the name of Simmons,a fictitious employee,to the payroll list.Lewis,the treasurer of the corporation,signed the payroll checks and delivered them to Clark.Clark distributed checks to the correct employees and kept the one made payable to the order of Simmons.Clark indorsed the name of Simmons to the check,cashed it at Diamond Check Cashing.In this situation:

An unqualified indorser who receives consideration for the indorsement impliedly warrants that:

Negotiation of order paper requires:

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:

Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.

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

If an instrument bears a restrictive indorsement,any further transfer or negotiation is effectively barred.

If a negotiable order instrument is transferred to another party without an indorsement,the instrument has been:

A forged or unauthorized indorsement is by definition:

When a negotiable instrument is transferred by negotiation,the transferee is recognized as the holder of the paper.

When a special indorsement is made,the instrument continues to be order paper and may be negotiated only by an indorsement and delivery.

An indorsement "Pay to Donald Hames,Cathy Dukes" is not a valid indorsement because it does not contain the words "order" or "bearer."