Reference - Run Around

Multiple Choice

Reference - Run Around. Millie issues a note to Bob. Bob endorses the note and transfers it to Anne. Anne endorses the note and transfers it to Henry. In a timely fashion, Henry endorses the note and presents it to Millie for payment. When Henry presents the note to Millie, she asks him for reasonable identification. He did not have any identification with him and told her that she had no right to dishonor the instrument. Millie, however, refused to provide him the funds until he returned with proper identification. Nevertheless, when he returned with proper identification, Millie refused to pay the note, claiming that she lacked the funds with which to do so. Henry proceeded immediately to request that Anne pay the note, but she told him that he would have to get his money from Bob, who cannot be found. Which of the following is true regarding when, and if, the note was dishonored?

A) The note was never dishonored by Millie because she eventually acknowledged his entitlement to payment and only refused to pay because she lacked funds with which to do so.
B) Millie dishonored the instrument when she asked for proper identification.
C) Millie dishonored the instrument when she refused to pay it on the basis that she lacked funds with which to do so, but Anne did not dishonor the instrument.
D) Anne dishonored the instrument when she told Henry that he would have to seek recovery from Bob, but Millie did not dishonor the instrument.
E) Millie dishonored the instrument when she told Henry that she could not pay him because she lacked the funds, and also Anne dishonored the instrument when she told Henry that he would have to seek payment from Bob.