Harley signs a check payable to Pro Accountants, P.C., and gives it to Pro, leaving the amount blank but authorizing the firm to fill in the check for $10,000. Pro fills in $15,000 and negotiates the check to Valley Bank, to whom Pro owes $15,000. Valley Bank, an HDC, can enforce the check for

Question

Harley signs a check payable to Pro Accountants, P.C., and gives it to Pro, leaving the amount blank but authorizing the firm to fill in the check for $10,000. Pro fills in $15,000 and negotiates the check to Valley Bank, to whom Pro owes $15,000. Valley Bank, an HDC, can enforce the check for​

Quizplus · Accepted Answer

Once Harley authorized Pro Accountants to fill in the amount, Pro became an agent of Harley and had the power to complete the check by filling in the amount. However, Pro cannot act with fraudulent intent by filling in a higher amount than authorized. In this case, Valley Bank is a holder in due course because it took the check for value, in good faith, and without notice of any wrongdoing by Pro. As an HDC, Valley Bank can enforce the check for its full amount of $15,000. Therefore, the correct option is D.

Harley Signs a Check Payable to Pro Accountants, P