ch 28
An indorsement "for deposit only" is: a. restrictive. b. qualified. c. special. d. blank.
a
If a negotiable order instrument is transferred to another party without an indorsement, the instrument has been: a. assigned. b. negotiated. c. obtained by fraud, and is therefore invalid. d. obtained by fraud, but may be ratified.
a
Negotiation of bearer paper requires: a. delivery only. b. indorsement only. c. both indorsement and delivery. d. neither indorsement nor delivery.
a
The transferee has only those rights that were possessed by the transferor of the note when a transfer of an instrument is made by: a. an assignment. b. a negotiation. c. a sale. d. a will.
a
In the case of a check, when the impostor rule applies: a. the drawer of the check can successfully raise the defense of the forged indorsement. b. the forged indorsement is effective to negotiate the instrument. c. the forged indorsement is ineffective to negotiate the instrument. d. the instrument becomes nonnegotiable.
b
A __________ indorsement consists of the signature of the indorser and words specifying the person to whom the indorser makes the instrument payable. a. qualified b. restrictive c. special d. blank
c
Negotiation of order paper requires: a. delivery only. b. indorsement only. c. both indorsement and delivery. d. neither indorsement nor delivery.
c
The order or bearer character of the paper determines how it may be: a. assigned. b. sold. c. negotiated. d. accepted.
c
When the indorser merely signs a negotiable instrument, the indorsement is called a __________ indorsement. a. special b. qualified c. blank d. restrictive
c
When the name of the payee is spelled incorrectly, the payee: a. must indorse the instrument with the incorrect spelling of the payee's name. b. must indorse the instrument with the correct spelling of the payee's name. c. may indorse the instrument with either the correct or incorrect spelling of the payee's name. d. may not indorse the instrument.
c
A blank indorsement turns a(n) __________instrument into a(n) __________ instrument. a. negotiable; non-negotiable b. non-negotiable; negotiable c. bearer; order d. order; bearer
d
The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed: a. an assignment. b. a conversion. c. a sale. d. a negotiation.
d
A blank indorsement indicates the person to whom the instrument is to be paid-that is, the transferee.
f
A holder is also known as an assignee of the paper
f
A person who acquires the instrument on which the last indorsement is blank becomes a holder in due course.
f
An indorsement "Pay to Donald Hames, Cathy Dukes" is not a valid indorsement because it does not contain the words "order" or "bearer."
f
An instrument may be transferred only by negotiation.
f
Bearer paper may only be negotiated by the actual transfer of possession of the instrument.
f
A payee whose name is misspelled may indorse with the wrong name, the correct name, or both.
t
A qualified indorsement qualifies the effect of a blank or special indorsement by disclaiming certain liabilities of the indorser to a maker or drawee.
t
A restrictive indorsement specifies the purpose of the indorsement or the use to be made of the paper.
t
A special indorsement consists of the signature of the indorser and words identifying the indorsee.
t
If a lost negotiable instrument is in bearer form at the time of the loss, the finder is entitled to enforce payment.
t
If an instrument is payable to alternative payees, it may be indorsed and delivered by either of them.
t
If an instrument is payable to bearer, it can be negotiated by transfer of possession alone.
t
Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.
t
Order paper is converted into bearer paper by the holder's blank indorsement.
t
The impostor rule is an exception to the rules on liability for forgery that covers certain situations, such as the embezzling payroll clerk.
t
The order or bearer character of a paper is determined as of the time the negotiation takes place.
t