A payee has no rights in an instrument until: A) the drawer or ...

[anjilletteb]

A payee has no rights in an instrument until:
 A) the drawer or the maker has delivered the instrument to the payee.
 B)an acceptor has been established.
 C)an accommodation party has signed the instrument.
 D)a guarantor has signed the instrument.

Question 2

A construction lender had an obligation to loan 250,000 to a builder/mortgagor. The mortgage was recorded upon execution of the note. The funds were to be dispersed to the mortgagor as follows: 20 percent when the foundation was set, 20 percent when the building was roofed in, 20 percent when the interior plaster was set, 20 percent when the certificate of occupancy was issued, and 20 percent 30 days later. Will the lender have priority at the time of recording or at the time and amount of each advance?

[chereeb]

Answer to Question 1

A

Answer to Question 2

The Court held that so long as reasonable construction standards and rules applied, the lender was obligated and the priority goes back to the time of recording. Larson Cement Stone Co. v. Redlem Realty Co., 137 N.W.2d 241 (1965).

[anjilletteb]

Correct answers!

[chereeb]

Great! Please up vote