Fanny signs a note "payable to the order of Guaranty Bank." Guaranty indorses the note in blank and negotiates it to Haji, who sells it to Iona. Liability that may arise from the transfer of the note from Haji to Iona is

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When Haji sells the note to Iona, he provides certain warranties regarding the note, such as its authenticity and that he has good title to it. This creates a warranty liability.

Fanny Signs a Note "Payable to the Order of Guaranty