Molly makes a note payable to the order of Patrick; Patrick indorses it to Amy; Amy indorses it to Blake; and Blake indorses it to Homer. Homer presents the note to Molly within a reasonable time, but she refuses to pay. If Homer notifies only Patrick of the dishonor, Amy and Blake are discharged from liability.

Question

Quizplus · Accepted Answer

In negotiable instruments, if a note is dishonored, the holder must notify all indorsers to hold them liable. Failing to notify Amy and Blake discharges them from liability.

Molly Makes a Note Payable to the Order of Patrick;