Eve possesses an instrument that is "payable to bearer." She loses it. Flik finds it. On this instrument, Flik may
A) collect payment.
B) not collect payment, because he did not give value for it.
C) not collect payment, because he found it.
D) not collect payment, because he is not the "bearer."

Question

Quizplus · Accepted Answer

If an instrument is "payable to bearer," it means that whoever has possession of the instrument will be able to collect payment. Therefore, since Flik found the instrument, he can collect payment on it. The fact that he did not give value for it (B) or that he found it (C) does not matter as long as the instrument is payable to bearer. Similarly, whether or not Flik is the "bearer" (D) also does not matter as long as he is in possession of the instrument.

Eve Possesses an Instrument That Is "Payable to Bearer