Conversion of an instrument:
A) is an authorized assumption and exercise of ownership over it.
B) may occur if a person pays an instrument on a forged indorsement.
C) differs from conversion of personal property with respect to the applicable laws.
D) occurs if it does not lack indorsement necessary for negotiation.

Question

Quizplus · Accepted Answer

Conversion of an instrument is an unauthorized assumption and exercise of ownership over it. A negotiable instrument can be converted in a number of ways. For example, it might be presented for payment or acceptance, and the person to whom it is presented might refuse to pay or accept and refuse to return it. An instrument also is converted if a person pays an instrument to a person not entitled to payment, for example, if it contains a forged indorsement.

Conversion of an Instrument