Stanley, Who Owes Milton Money, Indorses a Draft to Him

Multiple Choice

Stanley, who owes Milton money, indorses a draft to him with the term "without recourse." The instrument later is dishonored. What liability does Stanley have on the instrument?

A) He has no liabilities on the instrument.
B) He has to pay Milton if the instrument defaults.
C) He has primary liabilities.
D) He has secondary liabilities.