[pia ach]

I am getting really confused with this topic, can someone please help me out.

Nix obtained the check stating “Pay to the order of Mary Nix or bearer”. The check is endorsed @ the back :

Mary Nix

Pay to John Jacobs

Mark Harris

John Jacobs

(without recourse)

Jacobs gives the check to his son as a gift,

…..

The question asks which statement is true..and the answer is –

When John Jacobs (the father) endorsed the check, he used a blank qualified endorsement in that he signed it without recourse and did not specify any endorsee. Therefore, when his son received the check, he received bearer paper.

So as per my understanding- Mark Harris is the Son..and since Jacobs just wrote his name and not write “Pay to Mark Harris” it is bearer paper.. But i thought for an instrument to become bearer, it should not mention any specific payee..Why is it a bearer paper?

Please someone explain , my exam is on Monday and am freaking out! 🙁

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[Anonymous]

Mark Harris is not the son. He was a holder of bearer paper after Mary Nix signed a blank endorsement. Mark Harris (holder of bearer paper) then gave a restrictive endorsement to John Jacobs. After John Jacobs gave a blank endorsement, his son became bearer holder with no contract liabilities against John Jacobs

[Anonymous]

Mark Harris is not the son. He was a holder of bearer paper after Mary Nix signed a blank endorsement. Mark Harris (holder of bearer paper) then gave a restrictive endorsement to John Jacobs. After John Jacobs gave a blank endorsement, his son became bearer holder with no contract liabilities against John Jacobs

[pia ach]

Thanks @CPA slave ..So after reading what you said, i understood the first line is blank endorsement, but then you mentioned Mark Harris giving restrictive endorsement..i am having doubts about that point…

Mary Nix — Blank Endorsement

Pay to John Jacobs

Mark Harris — Special Endorsement ( since Mark Harris mentions a payee name )

John Jacobs – Blank Qualified Endorsement since no payee mentioned and its qualified.

(without recourse)

Thereafter since Jacobs handed over the check to his son, it is bearer paper and he has no contract liabilities towards his son.( you mentioned it the other way round)…

Am i wrong ?

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[Anonymous]

Sorry, it's a special endorsement. I'm going on my my 10 hour of studying so everything is starting to mesh lol Sorry for the confusion but yes, it's a special endorsement, not restrictive endorsement

[pia ach]

Thanks a lot for confirming, it is a morale booster that i understood something! .i see both of us r giving Reg on 25th…Good Luck

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[Author]

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