X entrust Y with negotiable instruments endorsed in blank. Y sells them to Z is violation of private orders from X. The sale is-
Verified Answer
A. Void
B. Valid
C. Voidable at the option of Y
D. Voidable at the option of Z
Explanation:
Under the Negotiable Instruments Act, 1881, an instrument endorsed in blank becomes payable to bearer. A holder in due course (Z, if he took it for value and in good faith) obtains a good title, irrespective of any defect in the title of the transferor (Y) or breach of private instructions between X and Y.