Zeke indorsed his paycheck in blank and cashed it at his local grocery store.A burglar stole the check from the store, which immediately notified Zeke's employer.The employer gave the drawee bank a stop payment order.The burglar indorsed the check with a false name and transferred it to a convenience store, which took it for value and in good faith.When the check is presented to the drawee bank:
A)in the absence of a real defense, the convenience store is entitled to payment from the drawer.
B)the forged indorsement prevents the convenience store from collecting payment on the check.
C)the convenience store cannot receive payment because it is not a holder.
D)the convenience store cannot receive payment because it is not a holder in due course.

Question

Quizplus · Accepted Answer

The convenience store is a holder in due course because it took the check for value and in good faith. The forged indorsement does not prevent the convenience store from collecting payment on the check because the drawer is not asserting a real defense.

Zeke Indorsed His Paycheck in Blank and Cashed It at His