Mack writes a check to his maid,Marianne,in payment for services rendered.Marianne indorses the check in blank and gives the check to her masseuse,Janet,in exchange for a neck massage.Without indorsing the check,Janet gives the check to Martin,her newspaper carrier in payment for the next four month's delivery charges.Martin indorses with a special indorsement and negotiates the check to his church,St.Mark.The church indorses the check and deposits it in its bank account.If Mack's bank later dishonors the check,to whom may St.Mark's look for recovery?
A)Martin only
B)Only Mack
C)Mack, Marianne, Janet, and Martin
D)Mack, Marianne, and Martin

Question

Quizplus · Accepted Answer

St. Mark's can look for recovery from Mack, Marianne, and Martin. Mack is the drawer of the check, thus liable for payment. Marianne indorsed the check in blank, meaning she transferred her ownership interest in the check to Janet, but also impliedly represented that she has a right to do so and that the instrument is genuine and unaltered. Janet may be held liable to Marianne for improper negotiation of the check, but not to St. Mark's who received the check through proper negotiation from Martin. Martin indorsed the check with a special indorsement, which transfers the payment of the check to St. Mark’s but also asserts that the payment is due to a specific person. Therefore, Martin is also liable to St. Mark's for payment.

Mack Writes a Check to His Maid,Marianne,in Payment for Services