Dunbar is the holder and payee of a check. He takes it to the Federal Bank upon which it was drawn and has it certified. Which of the following is correct?
A. After certification of the check, Federal is primarily liable and the drawer is discharged on the check.
B. If Federal refuses to certify the check, the check will be dishonored.
C. Prior to certification of the check, Federal is only secondarily liable on the check.
D. Federal is obligated to certify the check as long as there are adequate funds in the account.
Answer:A
A is corrent because certification of a check constitutes acceptance; therefore, Federal becomes primarily liable as an acceptor and engages that it will pay the instrument according to its tenor at the time of its acceptance.
B is incorrect because Federal has no obligation to certify, therefore its refusal to do so will not constitute a dishonor.
C is incorrect since the drawee (Federal) is not liable until acceptance. No person is liable on an instrument unless his signature appears thereon.
D is incorrect because a bank is under no obligation to certify a check.