Debbie Dean issued a check to Betty Brown payable to the order of Cathy Cain and Betty Brown. Betty indorsed the check, “Payable to Elizabeth East, (signed) Betty Brown.” What rights, if any, does Elizabeth acquire in the check?

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Debbie Dean issued a check to Betty Brown payable to the order of Cathy Cain and Betty Brown. Betty indorsed the check, “Payable to Elizabeth East, (signed) Betty Brown.” What rights, if any, does Elizabeth acquire in the check?

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Debbie Dean issued a check to Betty Brown payable to the order of Cathy Cain and Betty Brown. Betty indorsed the check, “Payable to Elizabeth East, (signed) Betty Brown.” What rights, if any, does Elizabeth acquire in the check?

Explanation & AnswerSolution by a verified expert

Explanation

Individual DD wrote the check to Individual BB and Individual CC together. Because of this reason,in order to transfer the instrument to another person, the signatures of both Individual BB and Individual CC are required. In this case, only individual BB had signed the check, making the transfer invalid. If the check was signed by Individual CC and Individual BB, then Individual E would have acquired rights to the instrument.

Sample Response

Individual E does not acquire any right in the check as the check was signed only by Individual BB and not by Individual CC. If it was signed by Individual CC, Individual E would have held rights over the check, which is not the case here.

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