Question

Answer the following problem, briefly explaining your answer.

Drawer issued a check for $100 payable to the order of Leslie Fay. Leslie indorsed the check "Leslie Fay," and she delievered it to Bella who paid $100 to Leslie. Bella transferred the check to Henry Baker without indorsing the check, and Henry paid Bella $100 for the check. Henry indorsed the check, "For Deposit Only, Henry Baker," and deposited the check in his account.

1. Was Leslie's indorsement a qualified or unqualified indorsement?
2. Did Leslie negotiate the check to Bella?
3. Did Bella negotiate the check to Henry?
4. Did Henry negotiate the check to his bank?

Answer 1

1) it was an qualified endorsement of instrument as signature was put on the instrument and limiting her liabilities to the given amount..

2) yes Leslie negotiates the check to Bella as she received the $100 as due consideration from Bella for the same.

3) Yes Bella also negotiate the check to Henry and received the negotiated amount as a due consideration

4) he endorsed the check to bank and did not negotiated as he received nothing from bank .bank will collect the amount from its actual drawer