Exam 27: Negotiation, Holder in Due Course, and Defenses

Helen worked for ABC Company as the company treasurer. She took 20 of ABC Company's checks, labeled as belonging to ABC Company. Over the course of one year, she signed and mailed the checks to American Express, her own credit card company, to pay her own credit card debt. Assuming the court follows the case in the text, Watson Coatings Inc., v. American Express Travel Services Inc., which of the following is the most likely result in a lawsuit by ABC Company against American Express to recover the amounts of the checks?

Which of the following is a version of a qualified endorsement?

Which of the following is the result if a payee who receives an instrument with missing information completes the missing information in a way that is inconsistent with the intent of issuer, and the instrument has been clearly materially altered?

Which of the following does the UCC define as, "honesty in fact and the observance of reasonable commercial standards for fair dealing?"

According to the UCC, which of the following is true regarding when a person has notice of a fact?

Which of the following is true regarding how a holder may take an instrument for value, but not become a holder in due course?

Which of the following is true regarding the concept of negotiable instruments in Japan?

Which of the following is a party who is in possession of an instrument that is payable to the party or to the bearer of the instrument?

A bank has given value for a negotiable instrument to the extent that the bank has a security interest in the instrument.

Which of the following was the result in Michael J. Kane, Jr. v. Grace Kroll, the case in the text in which the defendant issued a check to the plaintiff to cover the plaintiff's sale of cows to the defendant's son, but later stopped payment on the check because her son said he could not repay her?

Set forth the five conditions under which a holder may take an instrument for value.

Receiving an instrument as a gift satisfies the requirement of taking an instrument for value.

The statement, "Pay to Constance only," with the endorser's signature is an example of which of the following types of endorsements?

"House Painting." Susie Smith signed a check agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. A problem with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary were having a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the check on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the check on the back, "Bill Brown, without recourse," and gave it to his nephew, Sam, who took it to the bank for payment. Meanwhile, Susie has stopped payment on the check because following a rain storm, all the paint on the house looked spotted. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because she, Mary, did not sign it. -Which of the following is true regarding Sam's rights in relation to the check?

"House Painting." Susie Smith signed a check agreeing to pay, "Annie Greene, Mary Hodge," $1,000. The payment was for painting her house. A problem with the note was that it spelled Annie's last name, "Greene," whereas Annie spells it simply, "Green." Annie and Mary were having a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the check on the back, "Annie Green," and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the check on the back, "Bill Brown, without recourse," and gave it to his nephew, Sam, who took it to the bank for payment. Meanwhile, Susie has stopped payment on the check because following a rain storm, all the paint on the house looked spotted. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and also because she, Mary, did not sign it. -Which of the following is true regarding Mary's claim that the endorsement by Annie was illegal because the note misspelled Annie's name?

Which of the following may endorse an instrument made payable to a legal entity such as a partnership?

A(n) ______ endorsement is the endorser's signature along with a named endorsee.

A restrictive endorsement may limit the transferability of the instrument.

An instrument that reads, "Pay to the order of Jones or Green," is payable to _________ payees.

An instrument is dishonored when a party refuses to pay the instrument such as when a bank refuses to pay because insufficient funds exist.