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[Paying Debts] Felicia Writes a $500 Promissory Note to Arut

Question 90

Multiple Choice

[Paying Debts] Felicia writes a $500 promissory note to Arut. Arut, who owes money to Gibson, endorses the note and gives it to Gibson. Gibson then pays off a debt to Branson with the $500 note. Branson, who has some business dealings with Felicia, writes "Pay to the order of Felicia" on the same $500 note, places as "X" where his signature should be, and transfers the note to Felicia, who endorses the note to Tonya.
-If, instead of demanding payment on the note, Tonya returns the note to Felicia without marking it in any way, is Felicia still liable on the note?


A) Yes, because she has not been discharged.
B) Yes, she is primarily liable on the note, but the other endorsers were discharged.
C) Yes, because Felicia must mutilate the note to show that Felicia is discharged from liability.
D) No, because the note became void once it was reacquired by Felicia.
E) No, since Tonya surrendered the note to Felicia, Felicia is no longer liable on the note.

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