Susan Smith steals a valuable necklace from Pamela Jones.The necklace bears Jones's full name.Smith takes the necklace to a pawnshop,sells it to the shop,and gets a check for $10,000 in the name of Pamela Jones.Smith then indorses the check in Jones's name and transfers it to Harry Anderson.Which of the following is true about this situation?

Question

Quizplus · Accepted Answer

The rationale for the impostor rule is to put the responsibility for determining the true identity of the payee on the drawer or maker of a negotiable instrument.The drawer is in a better position to do this than some later holder of the check who may be entirely innocent.The impostor rule allows that later holder to have good title to the check by making the payee's signature valid although it is not the signature of the person with whom the drawer or maker thought he was dealing.

Susan Smith Steals a Valuable Necklace from Pamela Jones