Darrell owes Judy $50.He naively signs a blank check and tells Judy to fill it out for $50.Judy takes the opportunity to steal money from Darrell and fills in the check for $500.Judy then takes the check to the payor bank,cashes it,and is never heard from again.Which of the following is correct?
A) If the bank pays the check, it is liable for $450. This is an altered check, so Darrell is liable for the original tender of $50.
B) If the bank pays the check, it is not liable at all since Darrell bears the risk of loss for giving the signed, incomplete check to Judy. The bank may be liable if it was on notice that the completion was improper.
C) If the bank pays the check, it is liable for $500.
D) Darrell and the bank will share the loss equally.
Correct Answer:
Verified
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