Question

Which of the following examples is NOT a trust indorsement?

a. Rao indorses his payroll check in blank.
b. Rao has to leave town, but wants to purchase a used car from a friend. He has his lawyer do the transaction and indorses his payroll check to his lawyer "as agent for Rao."
c. Rao asks his accountant to pay some bills for him while he is out of the country, so he indorses his payroll check to the accountant "as agent for Rao."

Answer 1

a. Rao indorses his payroll check in blank.

Step-by-step explanation:

There are many types of indorsements, and out of them one is "Trust Indorsement"

Trust Indorsement is an indorsement to a person who can use the funds for the benefit of the indorser.

Example:

Brian indorses a check to his employee Denny "Payable to Denny, as agent for Brian", This is an example of trust indorsment.

Option b and c are clearly examples of trust indorsements in which you can notice that Rao has indorsed his lawyer and accountant "as agent for Rao".

Whereas, option a is NOT a trust indorsment but rather a "Blank Indorsement"

Blank Indorsment is an indorsement that doesn't have any particular indorsee and only has a signature on it.