Jones did work for Smith, who agreed to pay him in advance by cheque. Smith prepared a cheque for Jones. In which of the following situations would Smith have to honour the cheque to Green after it had been transferred to her by Jones?
A) Where Green knew that Jones had taken the completed cheque from Smith's desk while Smith was out to lunch.
B) Where Green was Jones's girlfriend who had been given the note as a gift. Jones had not yet started the job.
C) Where Green and Jones had worked together in a scheme to cheat Smith.
D) Where Green operated a finance company and, while not knowing Jones but recognizing Smith's signature and knowing his good reputation, had given Jones $400 for the $500 cheque.
E) Where Jones had changed the $500 to read $5000 by adding a zero and rubbing out the word hundred and writing thousand over it. The alteration was clearly visible on the cheque.
Correct Answer:
Verified
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