On January 10,2011,Jonathan Writes a Check,payable to Josh in the Amount

question 78

Multiple Choice

On January 10,2011,Jonathan writes a check,payable to Josh in the amount of $500.00,drawn on Jonathan's account with MBNA bank.Josh,on the back of the check,writes,"Pay to the order of Brandi" and leaves the check on his night stand.Brandi comes to visit while Josh isn't home (she has a key) sees the check and takes it believing that it was indorsed to her a repayment of a debt.Brandi,then signs her name to the back of the check and hands it to Lori as a birthday present.If Lori sells the check to Faye,who knows nothing about what has previously occurred,:

• A) Brandi would have a personal/limited defense against Faye.
• B) Faye would be a holder in due course.
• C) Brandi could buy it from Faye and become a holder in due course based on the re-acquirer rule.
• D) Josh would have a fraud in the factum defense against Faye.
• E) Faye would have no rights to the instrument because it was stolen.

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Definitions:

Securities Violations

Illegal practices in the trading or issuing of stocks and bonds which include insider trading, fraud, and misrepresentation.

Willful

An action done intentionally or with reckless disregard for the consequences, often used in legal contexts to denote deliberate misconduct.

Strategic Growth Plan

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