Jennifer signs a promissory note to pay $2, 500 to Clara.Clara negotiates the instrument and indorses it to Anthony.Anthony alters the note to make the payment amount $25, 000 and negotiates the note to Nicholas.Nicholas indorses the note and negotiates it to Mack.Nicholas and Mack are both unaware of the alteration done by Anthony.
-If Mack presents the note to Jennifer for payment, how much, if anything is Jennifer obligated to pay?

Question

Quizplus · Accepted Answer

Although Anthony altered the note, the alteration is considered fraud and therefore void. This means that the original terms of the note are still valid, and Jennifer is only obligated to pay the original amount of $2,500. As neither Nicholas nor Mack were aware of the alteration, they do not have any responsibility for it and the note is still valid in their hands. Therefore, when presented for payment, Jennifer is only obligated to pay the original amount of $2,500 to Mack.

Jennifer Signs a Promissory Note to Pay $2, 500 to Clara.Clara