Exam 25: B: Transferability and Holder in Due Course

Gina writes and signs a check payable to "Happy Market." Ira,Happy's manager,indorses the check "For deposit only." This is

The shelter principle allows persons who formerly held instruments to improve their positions by later reacquiring the instruments from HDCs.

A negotiable instrument can only be transferred by negotiation.

A holder does not take an instrument for value if he or she gives a negotiable instrument as pay?ment.

Velma transfers a note by signing it and delivering it to Woz.Woz is

A person who receives an instrument as a gift normally becomes an ordinary holder.

Bob receives a check from Chris.Without Bob's knowledge,Dan indorses it in his own name and deposits it in his account at Elm City Bank.In Bob's subsequent suit against the bank for the money,the court will most likely rule in favor of

Knowledge of one defense precludes a holder from asserting HDC status in regard to all other defenses.

Mike receives a payroll check from National Computer Systems,Inc. ,and indorses it by signing his name on the back of the check.This is

To pay for investment advice from financial consultants Smith and Jones,Tony signs a check payable to "Smith or Jones." A proper in?dorsement of the check is

Ollie negotiates an order instrument to Phil by

Fact Pattern 25-A1 Rollo obtains a check payable to his order from Simone.Rollo signs the back and gives the check to Trey.Trey writes "Pay to Trey" above Rollo's signature. -Refer to Fact Pattern 25-A1.After Trey writes "Pay to Trey" above Rollo's signature,further negotiation of the check

Clem gets a $100 check as a gift from Daria.Clem crudely increases the amount of the check to $1,00-the alteration is obvious-and transfers it to eReady Sets,Inc. ,in exchange for a 3D HD TV.eReady deposits the check in its bank account at First Town Bank.HDCs of this check include

Petra signs a check payable to Quincy,who in?dorses the back,gives it to Regional Credit Union,and receives cash.The transfer of the check from Quincy to the credit union is

Fact Pattern 25-A1 Rollo obtains a check payable to his order from Simone.Rollo signs the back and gives the check to Trey.Trey writes "Pay to Trey" above Rollo's signature. -Refer to Fact Pattern 25-A1.When Trey writes "Pay to Trey" above Rollo's signature,the check becomes

Indorsement can convert an order instrument into a bearer instrument

A person who accepts an instrument that has been completed without knowing that it was incomplete when issued can take it as an HDC.

An order instrument is negotiated by delivery with any necessary indorsements.

Ivy signs a check payable to Jon and gives it to him.Jon in?dorses the back,and transfers the check to Ked.To negotiate the check to Luis,Ked must

An instrument is not defective simply because it is overdue.