acquiring holder status

Question 1

basic idea

Answer 1

-person who takes the instrument via negotiation will want to acquire status as a HDC because this status gives him legal rights that are superior to those of a mere holder

Question 2

taking the instrument as a holder

Answer 2

person can be come a holder in 2 ways: 1) issuance or 2) negotiation

Question 3

issuance

Answer 3

• the first delivery of an instrument

- maker/drawer——> payee

Question 4

negotiation

Answer 4

• transfer of possession, whether voluntary or involuntary, be a person other than the issuer to person who comes a holder
• to negotiate a bearer instrument, requires a transfer possession only
• to negotiate an order instrument, requires transfer of possession PLUS a proper endorsement of the instrument before transfer

Question 5

blank indorsement

Answer 5

-indorsement not made to a specific person

/s/ Paul

Question 6

qualified inrodsement

Answer 6

• used to limit one’s liability on an instrumetn

indorses: “without recourse /s/ Paul

Question 7

restrictive indorsement

Answer 7

-used to limit what the holder can do with the instrument

(VALID: for deposit only /s/ Paul)

(INVALID: signs the back Harry if he mows my lawn /s/ Paul)

Question 8

anomalous indorsement

Answer 8

-used by accommodation parties

Question 9

jointly payable

Answer 9

• requires all payees to indorse for a valid negotiation
• must sign before you move to the next person

(pay ro the order of paul AND perry)

Question 10

payable severally

Answer 10

-either party can sign the instrument to negotiate it

pay to the order to Paul or Perry