Able carefully drew a check for $10 on her checking account at ABC bank,payable to the order of Baker.Baker altered the check to read $100,and then negotiated it to Cain.Cain presented the check for payment to ABC bank,which paid Cain $100.The bank then deducted $100 from Able's account.When Able saw her bank statement she demanded that ABC credit her account for the altered check.ABC credited Able's account and then sued Cain.Is Cain liable?
A)Yes,because Cain violated a presentment warranty.
B)Yes,because Cain was a holder of the check.
C)No,Cain is not liable if Cain acted in good faith and was unaware of Baker's alteration.
D)No,because Cain is not holder in due course.

Question

Quizplus · Accepted Answer

If an unaccepted draft (such as a check)is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft,then the person obtaining payment or acceptance warrants to the drawee making payment or accepting the draft in good faith that the draft has not been altered.

Able Carefully Drew a Check for $10 on Her Checking