Академический Документы
Профессиональный Документы
Культура Документы
means
Usage of Trade: custom within the industry which binds all those who should’ve known
about it (including customers). Can’t violate the law.
Course of Dealing: Refers to what the parties did in the past contracts with one another –
if parties have had prior dealings, this creates an expectation of what will happen in this
K and the UCC will recognize it
Course of Performance: means what the parties do in performing this one particular K,
especially important where the K foes on over a period of time and creates its own history
+ expectations.
Every K imposes obligation of good faith “honesty in fact and the observance of reasonable
commercial standards of fair dealing.
Problem 1: 3-103(a)(15)
The UCC gives Portia the title of remitter. Remitter: means a person who purchases an
instrument from its issuer if the instrument is payable to an identified person other than the
purchaser.
Negotiable Instrument – means unconditional promise or order to pay a fixed amount of money,
with or without interest or other chargers described in the promise, or order: if it… [3-104a]
Problem 2:
Yes, his checks are negotiable. 1-201(b)(37) holds that signed includes any writing using any
symbol executed or adopted with the present intention to adopt or accept a writing. The history
of his checks being signed with an X indicates that he had the present intent to adopt the X as his
signature.
Problem 3:
Yes, the bank can treat it as if Walter signed his own name. 3-401(b) holds that a signature may
be made by the use of any name, including a trade or assumed name, or by a work, mark, or
symbol excuted or adopted by a person with present intention to authenticate a writing. This
means that if Walter signed using his company’s name but had the present intention to
authenticate his writing (i.e. his check), then it’s allowable under the UCC.
…
A promissory note must contain an unconditional promise to pay.
Draft: must contain an unconditional order to pay. Unconditional is the necessity for it t be
negotiable and circulate without question.
Implied Conditions: That it’s possible to think up things that might happen to destroy the
maker’s liability on the instrument does not destroy negotiability unless the instrument expressly
mentions those matters.
Triffin v. Dillbough (SC of Pennsylvania, 1998)
Facts:
Money Orders stolen from Amer Express agent, Chase Savings Bank.
Also, one hundred Amer Express orders stolen while being shipped to other agent, IW
Levin and Co.
When stolen, all M.Os, contained the pre-printed signature of Louis Gerstner, then
Chairman of Amer Express but blank as to amount, sender, payee, and date
Dec 11, 1990 – Dillabough presented 2 Amer Express M.Os for payment at Chuckie
Enterprises, Inc
Feb 25, 1991 – Lynn presented 1 M.O. for payment
Giunta, owner of Chuckies, paid the M.Os
Giunta unaware of Amer Express M.Os. that he cashed were stolen
M.Os were presented for payment in Colorado – returned as reported lost or stolen do not
redeposit
Amer Express Refused to pay the face amts on the M.Os,
Chuckies then sold all the M.Os to Triffin, assigning all right, title, and interest in MOs to
Triffin
Triffin filed separate complaints in trial court which were consolidated
Obtained default judgments v. Dillabough and Lynn and proceeded to bench trial with
Amer Express
Trial ct: found that MOs were not negotiable instruments and found for Amer Express
Superior Ct reversed, finding that MOs were negotiable instruments and Triffin had
status as holder in due course entitling him to recover face value of the MOs
Issue:
Are the money orders negotiable instruments pursuant to the Penn version of the UCC
and
if so, whether appellee Triffin has right of a holder in due courtse who can recover the
face value of those money orders from Amer Express?
Rule:
Negotiable Instrument: an instrument capable of transfer by endorsement or delivery.
Negotiability provides a means of passing on to the transferee the rights of the holder,
including the right to sue in his or her own name, and the right to take free of equities as
against the assignor/payee.
Conclusion:
Money orders in question are negotiable instruments and Triffin has the rights of a holder
in due course, entitling him to recover the value of the money orders from Amer Express.
Rationale:
Amer Express says it has an endorsement saying that if MO was stolen, it would not be
cashed by Amer Express – but this does not convert the MO into a conditional promise to
pay but operated as a warning
Alleged conditions are nothing more than a restatement of Amer Express’ statutory
defenses against payment because of alteration
“This MO will not be paid if…” does not elevate it to a condition b/c it’s a restatement of
defenses in the UCC available to Amer Express – just a warning that Amer Express has
reserved its defenses
The MOs are negotiable instruments according to the 4-part test: the upper deals with the
2nd part: to be negotiable requires a conditional promise to pay
Rights as a holder in due course found
Problem 4:
a) No. It requires mention of a specific date.
b) Yes. Mentions a separate agreement.
c) Yes. It is not made conditional by reference to another agreement.
Problem 5:
There doesn’t appear to be a specific statute on point. If a check is marked VOID after 90
days, it may still be technically negotiable within a 90 day period.
Problem 6:
Negotiability is not destroyed.
Problem 7:
No. Negotiability is not destroyed as a result of having to reference other sources for the
prime rate.
…
Heritage Bank v. Bruha (SC of Nebraska, 2012)
Facts:
4 times separately – Bruha signed promissory notes w/ Sherman County Bank.
$ invested in trading company accounts while allegedly shared management w/ County
bank
In brief, Bruha claimed that County Bank misled him into borrowing $ and invested in
risky + speculative return business as result
Bruha claimed that bank reps advised against taking $ out of trading accts
4th Note signed on Dec 16, 2008 – promise to pay principle amt of $75k or so much as
may be outstanding w/ interest on unpaid outstanding principal balance of each advance
and evidenced a revolving line of credit
Note contained variable interest rate; subject to change every month + calculated on
index maintained by Sherman
Initial rate – 7.25; adjusted to 6.75 – on default would increase by 5.
Received amts of $51k in total as advancements
FDIC appointed as receiver after Sherman failed
Sold some assets to Heritage, inc. notes signed by Bruha
Heritage sued to enforce notes
District ct found that Heritage was holder in due courtse
Issue:
Does Nebraska’s UCC or federal banking law bars Bruha’s defenses?
Conclusion:
Affirmed b/c defenses are barred by federal law; reversed in part and remanded b/c of
interest not calculated correctly
Rule:
Neb UCC holds that negotiable instrument means an unconditional promise to pay a
fixed amt of $ w/ or w/o interest or other charges diescribed in tehe promise or order
Principle amt must be generally determinable by reference to instrument itseld w/o any
reference to any outside source – if reference needed, not fixed amt
Rationale:
Bruha argues that Heritage is not a holder in due course and neither was FDIC when it
held the note
Holder in due course is immune to defenses with some exceptions
Heritgage is not a holder in due course b/c note was not negotiable and Article 3 of the
UCC doesn’t appy here.
Here, not a negotiable instrument b/c principal amt was not fixed – text says that it
promises to pay $75k or so much as may be outstanding
Bruha could also gain up to $75k b/c it’s a revolving line of credit
One cannot tell how much Bruha was advanced at any given time
Ct still ruled in favor of bank but FDIC or Heritage could never be a holder in due course
under Nebraska law
…
Pgs 36-47 (Problems 8-13)
Courier w/o luggage requirement: instrument must not be burdened w/ anything other than the
simple and clean unconditional promise or order (cannot be made to spiral around legal
obligations) – if maker of note adds any additional promises, becomes non-negotiable b/c then
holder of note is given notice that the note may be conditioned on performance of other promise
Problem 8:
a) Destroys negotiability. Accepting K by accepting payment is an additional promise
(doesn’t fall under the 3-104 (a)(3) exceptions – violates the “does not state any
additional undertaking.”)
b) Doesn’t destroy negotiability. Falls under the second exception where It contains an
undertaking to or power to secure collateral.
c) Doesn’t destroy negotiability – seems to be a hybrid of the last 2 where it authorizes to
the holder to confess judgment and a waiver of benefit of law (hiring an attorney)
d) Doesn’t destroy? A little lost. It refers to payment but it’s not in addition to payment, it’s
just an additional payment method by which to pay quicker.
e) Doesn’t destroy – falls under Sec 1 of the exception – where it’s an undertaking or power
to give/maintain/protect collateral
…
Woodworth v. The Richmond Indiana Venture (Ohio Ct of Common Pleas, 1990)
Facts:
Dec 18, 1987 – P. executed promissory note in which he promised to pay to order of
Richmond Indiana Venture, a Limited Partnershop OR holder to sum of $655,625.00
Promissory note was given to pay part of defferwd portion of P’s investment in
partnetship
Promissory note was subsequently assigned or negotiated to D., Signet Bank
P is in default on promissory note – failed to make payments due on July 1, 1989 and
July 1, 1990 – P. filed action on Nov 2., 1989.
Promissory note must be as simple as possible and unconditional
Issue – term in promissory note – a promise by the maker resulting in forfeiture of
partnership interest and payments in event of default
Issue:
Is the promissory note negotiable when there is a forfeiture clause in the note.
Conclusion:
No. Summary Judgment allowed for Plaintiff.
Rationale:
Nothing about forfeiture in the exceptions
Promissory note’s negotiability is in doubt – when in doubt, it should be ruled against
B/c it’s not negotiable, D. bank cannot claim to be a holder in due course and is subject to
ordinary K defenses that plaintiff may assert.
Motion for Reconsideration: ct affirmed then. Provision doesn’t req. that note holder
declare a default before partnership can exercise option but rather, the partnership can
declare forfeiture if payments are not made
Problem 9:
a) No. Fits w/ 3-108(b) – payable 30 days after sight. Wait. Nvm.
b) If blanks were not filled in, then payable on demand. Probably.
c) Doesn’t destroy negotiability.
d) Predicated on a condition. Destroys negotiability
e) Destroys negotiability b/c predicated on a condition.
f) Destroys negotiability – needs to be extended at a definite time, not at a vague “without
undue financial hardship”
g) Doesn’t destroy.
h) Doesn’t destroy.
i) Destroys. Have to go to look up.
Problem 10:
If there’s a date on when the maker of the note is supposed to pay – maker can claim prepayment
as 3-108b states.
Problem 11:
a) Bearer paper not created
b) Yes, bearer paper created
c) Yes.
d) No.
e) No.
Problem 12)
a) Creates order – payable on demand 3-115 Note 2
b) Yes, estate is sufficient under 3-110 c 2 ii - Order
c) Order
d) Still negotiable.
Problem 13:
Yes and yes. I don’t know what would happen if she was a profession musician. I mean, she’s
still a consumer of goods.
…
Negotiation – Chp 3 (pgs 49-57) (Problems 14-21)
Movement of negotiable instruments from one person to another can be as involuntary as a theft
or as deliberate as a sale
Is an instrument negotiable? w/ reference to if instrument is in proper form meet techniqal reqs
of negotiability found in 3-104a
Has the instrument been negotiated? Asks about the legal validity of the attempted transfer of the
instrument
Negotiability – form
Negotiation – transfer
…
Shelter Rule – 3-203b
Indorsement – signature placed on an instrument by the payee or any later transferees. (req. to
transfer to another for negotiation of order paper) [bearer paper doesn’t need indorsement]
Blank indorsement – payee can sign back of instrument. Has legal effect of converting
instrument into bearer paper. To preserve order character – payee can specify new payee by
writing “Pay [new payee’s name]” above the indorsement – this is called a special indorsement –
has legal effect of making the instrument the sole property of the payee who becomes a holder
when the instrument is delivered.
Delivery of instrument to someone new is when new person owns the instrument, otherwise
belongs to previous owner until delivery.
…
Problem 14
a) Drawer = David Hansen. Drawee = Mechanical Bank. Payee = Egger -> Cynthia ->
Cornucopia Grocery. Depository bank – Octopus National Bank.
b) Holders: Egger, Cynthia, Cornucopia
c) Bank would not have been a holder
d) Converted into bearer paper – a blank indorsement
e) Egger, Cornucopia, Octopus Bank
…
Problem 15 – 3-110d
a) All of them must sign to indorse
b) Any or all is allowed
c) Payable alternatively
d) Both
…
Problem 16: 3-204d
Tell them to go back to law firm to change name
If not, then while indorsement is fine in either name, but signature in both names is required for
payment of the value.
…
Problem 17:
Dependent on intent. Appears to be ok as an indorsement.
..
Problem 18: 3-306
Yeah, she is.
…
Problem 19: 4-115a
Has to pay
…
Prob 20:
Mother is the holder b/c Laura did not sign back of check
…
Prob 21: 3-205c
Yes.
…
Chp 4 – Holder in Due Course (pgs 61-77)
…
Heritage Bank v. Bruha (con’t)
Facts:
Bruha alleged that Sherman County Bank who was the payee on the note he signed,
committed fraud by exposing him to investment risks about which the bank lied in
recommending
Note taken over by FDIC (Fed Deposit Insurance Company) when Sherman failed and
FDIC sold note to Heritage
Part 1 of opinion: Nebraska SC held note wasn’t negotiable due to lack of a fixed amount
to be paid and thus, under the UCC, defense of holding in due course was unavailable to
anyone possessing a non-negotiable note
Bruha appears to have alleged fraud in the inducement (the means used to induce a party
to enter into a K; in these cases, party knows character of the instrument and intends to
execute it but the K may be voidable if the party’s consent was obtained by false
representations)
Issue:
Conclusion:
Affirmed in part (barring defense) but reversed to fix interest rate
Rationale:
Bruha may have been led into taking additional loans by misrepresenting the trading
account status but nowhere does he suggest that he was unaware that he was incurring
more debt – he knew the character of his transaction although he may have been lead
there by false pretenses (fraud in inducement)
1823e bars Bruha’s fraud in the inducement defense
1823e formed as a result of barring secret agreements that modify notes in D’Oench case
as a defense
1823 sec e specifically, allows fed + state bank examiners to rely on a bank’s records in
evaluating the worth of the bank’s assets – having to check for secret agreements would
slow the process
History- Langley case: Ds there claimed misrepresentation as defense to FDIC claim –
but misrepresentation was fraud in inducement and was barred from bringing defense
unless it met 1823e requirements
…
To be holder in due course (who gets relief from all defenses the maker may claim) – must first
qualify as holder
Means that instrument must be technically negotiable and have been technically negotiated into
hands of current possessor
Holder in due course inapplicable to non-negotiable instruments
Holder must have possession of the instrument
Drawee bank doesn’t qualify as holder (b/c instrument must be negotiated to holder and drawee
bank that acquires the instrument is not a negotiation, just a surrent for payment (presentment)
…
Whether someone qualifies as holder in due course or not is measured at moment he gave value
for the instrument (assuming valid negotiation).
Things that happen afterwards such as receiving notice of problems of instrument after value has
been given doesn’t destroy holder in due course status
Value –
Gift of instrument never creates holder in due course status in donee (though donee may gain
rights under shelter rule)
Giving value is NOT the same as giving consideration.
Unexecuted promise in exchange for instrument? Value has not been given.
…
Problem 22: 3-303 and 3-306
3-303: Says that an instrument is transferred (or issues) when it’s for a promise of performance
to the extent the promise has been performed – here, the promise hasn’t been performed
(presumably, no notice of appearance has been filed or no retainer has been signed since it’s only
a promise) so it may be able to be taken away.
3-306: It looks like the wife/sheriff is subject to the attorney’s claim to the $$. Wife/sheriff is not
a holder in due course.
…
Problem 23: 3-303
1) The finance company is a holder in due course for $23k.
2) Donees generally do not receive status as a holder in due course. (Textbook)
But 3-303(2) says that transferring an instrument as payment is ok – likely, the mom will have a
claim for $23k.
..
Problem 24: 3-414
3-314c says that drawer has no obligation to pay if accepted by bank.
…
Falls Church Bank v. Wesley Heights Realty Inc. (District of Columbia Court of Appeals, 1969)
Facts:
Appellees drew a check for $1,400, payable to order of a customer of appellant bank
Customer deposited the check; could only withdraw $140.00
Appellees stopped payment on check
Customer had skipped, leaving no credit in which to charge the $140.00
Bank demanded appellees to pay
Trial – appellees granted summary judgment on grounds that bank was an agent for
collection and id not have a security interest and was not a holder in due course for value
Issue:
Whether and under what circumstances may a depositary bank achieve the status of
holder in due course of negotiable paper deposited with it by a customer?
Conclusion:
Reversed. Bank entitled to payment.
Rationale:
UCC expressly privudes that a bank acquires a security interest in items deposited with it
to the extent that provisional credit given the customer on the item is withdrawn (4-208,
4-210 in revised)
A bank may be a holder in due course while acting as a collectioagency for its customer
(case cite)
Appellant claims cannot be defeated except in UCC 3-305(2) exceptions
…
Problem 25: 4-210b
Bank is a holder in due course.
…
In re: Dixon-Ford (USBK, District of NJ, 2011)
Facts:
2006 – Debtor engaged Weichert as real estate rep to locate family home
Sought to finance home w/ mortgage loan from US Bank from WFS
Debtor employed by Social Sec Administration, makes $45k/yr
Contracted w/ WFS for state income mortgage loan
Feb 24, 2007 – Debtor executed loan application indicating she was VP of SSA earining
$148k/yr
April 9, 2007 – Debtor accepts mortgage loan commitment
April 9 + 10 = WFS submitted VOE form to SSA
Apr 10 – Someone at SSA provided VOE form to Debtor + handwritten note
Apr 18 – Debtor closed on property and executed second loan application
Post closing review reveal 2 VOEs – one correct, one incorrect
Incorrect one supplied to WFS underwriter
US Bank as trustee for series of mortgage loans purchased by Citigroup Mortgage Loan
Trust Inc.
Bank didn’t conduct review b/c seller guaranteed mortgages as enforceable and
underwirrten
US Bank received Debtor’s mortgage note + original recorded mortgage
No indication of fraud, alteration, or invalidity on face of debtor’s mortgage or note
Neither Weichert nor Debtor altered US Bank to any alleged misrepresentations or other
flaw in origination of mortgate
Debtor claims fraud v. US Bank, arguing US Bank knew or should’ve known of the
alleged misrepresentations made in connection w. origination of Debtor’s mortgage
US Bank claims holder in due course
Issue:
Plaintiff doesn’t have defenses v. US Bank; has some claims v. WFS b/c material
questions of fact remain in connection w/ Debtors’ mortgage application
Conclusion:
US Bank gets summary judgment v. Debtor
Rationale:
US Bank took mortgage instrument for value – debtor claims that Bank knew or
should’ve known abt misrepresentations – which is a good faith issue
When note appears to be negotiable in form and regular on face, holder has no duty to
inquire about possible defenses orginarily; unless circumstances that he had knowledge
of rise to level that failure to inquire reveals deliberate desire to evade knowledge b/c of
belief/fear that investigation will disclose defense to transaction (Carnegie Bank)
US Bank has the altered VOE (Verify of Employment) but has no duty to inquire b/c note
is facially free from irregularities which would give Bank notice abt potential fraud
Failure to investigate is not bad faith to prevent US Bank from being holder in due course
US Bank didn’t participate in origination of mortgage nor collusion/communication b/w
Weichert and US Bank regarding mortgage
Fraud in inducmenet claim doesn’t work v. holder in due course
…
Pgs 77-100 (Problems 26-31) 9/5/19
…
Problem 26
Holder in due course requires first to be a holder. To be a holder, one must have possession of
the note. Therefore, Dubious Mortgage is not a holder and resultingly, not a holder in due course.
…
Problem 27: 3-302a and 3-307
3-307: Instrument was made payable to fiduciary personally and so, fiduciary did not have notice
of the breach of fiduciary duty
3-302a: Holder took the instrument for value, in good faith, and without notice that instrument is
overdue or has been dishonored, and without notice that any party has a defense in claim.
…
Any Kind Checks Cashed, Inc. v. Talcott (District Ct of Appeal of FL, 2002)
Facts:
Talcott, maker/drawer; Riveria, a financial advisor to Talcott, and Guarino, a cohort of
Talcott
Rivera gets sold Talcott an investment for roughly $75k, no returns
Jan 2000 – Rivieria asks Talcott for a $10k to be used for travel expenses and a return for
the $75k investment
Talcott knew Guarino was a partner of Rivera
Rivera indicated that he only needed $5700; Talcott called bank and stopped $10k checj
Guarino appeared at Any Kinds Check Cashed – presented the $10k check to Nancy
Michael, a supervisor w/ authority to approve checks over $2k
She tried to contact the maker, couldn’t get a hold of him, used her prior experience to
say it was good
Michael cashed check, gave Guarino $9,500 (- 5% fee) and deposited at bank
Jan 15, 2000 – Rivera called Talcott, asked about the $5,700 – Talcott sent the same day,
assumed Rivera knew he had stopped payment on the $10k check
Guarino went to Stuart Any Kind store and presented the $5,700 check to teller; teller
noticed Michael had previously engsged w/ customer – supervisor said don’t cash until
she got a hold of the maker
Jan 19 – Talcott stopped the $5,700 check
Issue:
Whether a check cashing store qualifies as a holder in due course so it can collect on a
$10k check written by an elderly man who was fraudulently induced to issue the check
by the person who cashed it?
Did trial court err in finding that Any Kind was not a holder in due course for the $10k
check?
Conclusion:
Not a holder in due course b/c procedures the check cashing store used didn’t comport w/
reasonable commercial standards of fair dealing
No.
Rationale:
Question turns on whether check cashing store acted in good faith. (honesty in fact in the
conduct of the transaction concerned) – interpreted by FL courts as a subjective test
Here, FL law would normally allow the check cashing store as holdr in due course
1992 – legislatue adopted new definition of good faith that applied to 3-302’s definition
of holder in due course – good faith means honesty in fact and observance of reasonable
commercial standards of fair dealing
Subjectiveness must now be accompanied by reasoning that assures conduct comporting
w/ reasonable commercial standards of fair dealing
Subjectiveness alone not enough for holder in due course
Standard adopted from Maine: 1) factfinder must determine whether conduct of holder
comported w/ industry standards applicable to the transaction and 2) whether those
standards were reasonable standards intended to result in fair dealing
Procedures followed not reasonably related to achieve fair dealing w/ respect to $10k
check
FL legislature didn’t intend to accommodate check cashing places in holder in due course
status of UCC
$10k check not a typical check cashed at a check cashing place
Unusual for broker to conduct business at check cashing store and not at a bank
Fair dealing req. that $10k check be approached w/ caution
When cashed at bank, law frequently places loss on wrongdoer in underlying transaction;
at check cashing place, holder in due course law puts loss on wronged maker - these
policy reasons of transfer of checks benefit the economy doesn’t outweigh reasons for
caution
Verification w/ maker not necessary to preserve holder in due course status w/ most
transactions
…
Winter & Hirsch, Inc. v. Passarelli (Illinois Appellate Ct, 1970)
Facts:
Ds. first contacted Equitable Mortgage and Investment Corp, attempted to secure loan.
(it’s a brokerage firm)
Equitable to lend Ds $10k
Provisions: 1) Ds. agreed to pay for value $16,260 over 60 months for $271/mo. 2)
Confession of judgment clause
Note was payable to bearer
Max legal interest rate was exceeded by Equitable and it’s uncontested that Equitable
charged an ursurious interest rate
Trial ct: Judgment against Defendants; rejected usury defense
Ds appeal: asking for twice the interest rate plus attorney fees + costs
Ds defaulted on note and Ps obtained a judgment by confession
Loan application dated Jan 7, 1963 had P’s name on it
Plaintiff issued a check to Equitable for $11k on Feb 18, 1963 w/ notation that it was for
Passarelli deal but defendants didn’t receive the $10k loan from Equitable until Feb 28,
1963
Issue:
Is the Plaintiff a holder in due course and free from the usury defense when the plaintiff
advanced the money to the broker to buy the loan before the loan was ever formalized?
Conclusion:
Reversed. P is not a holder in due course.
Rationale:
P. argued that they must’ve seen the loan contract but misdated it – ct says the evidence
shows otherwise
P was a co-originator since it advanced funds before loan was formalized
Co-originators are charged w/ knowledge of the loan terms and knowledge includes info
regarding anticipated return on investment
P. should’ve been aware of the usurious rate and went along with transaction anyways
Face of note – principal amount cannot be determined – P. should’ve raised the question
of why Equitable sold a $16260 note for $11k
Can’t allow subsequent purchasers to claim ignorance by saying they weren’t aware of
any issues by not having the principal amount included
Should be suspicious when amount paid is far less than the loan amount which should
lead to inquiry
…
Problem 28: 3-302
Yup.
…
Problem 29: 3-304b and c and comment 2
No.
…
Problem 30:
It’s payable on demand which means the depositary bank is a holder in due course.
…
Dawda, Mann, Mulcahy, & Sadler, PLC v. Bank of America, NA
Facts:
P. law firm alleges it suffered significant monetary loss b/c of D. bank’s negligence in
accepting over $500k in diverted trust account checks
Former partner of P. engaged in fraudulent scheme which caused P. to make a number of
checks payable to D. from P’s IOLTA account
Partner, an account holder + customer, presented checks to D. and D. deposited funds in
partner’s personal acct maintained by D. – 9 checks from Nov 2010 to March 2014
totaling $529,676.50 and were payable to BoA
D. alleged to have made no inquiry (despite not having any relation)
P. alleges D. violated common law duty of inquiry
D. says did not owe P. such a duty and held checks as a holder in due course
D. put a motion to dismiss
Motion is denied
Issue:
Can the bank claim a defense to duty of inquiry by claiming it is a holder in due course?
Conclusion:
No. Motion denied.
Rationale:
Banks have a duty of inquiry that is activated only when checks, not in a insignificant
amount, are drawn payable to the order of a bank and presented to payee bank by a third
party seeking to negotiate checks for his own benefit (Sun n Sand California case)
Bank cannot ignore suspicions – there must be objective indications that bank could
reasonably conclude that party presenting check is authorized to transact in manner
proper – absence of this leaves bank open to liability
Holder in due course is not a defense to duty of inquiry
Duty of inquiry arises in circumstances where check is physically presented to bank for
negotiation by dishonest employee and bank, through agent, has opportunity to inspect
check for irregularities and should alert bank that fraud is amiss
Irregularlity doesn’t have to be on the face of the check – statute does not support
argument that irregularity has to be on face of the check
…
Problem 31: 4-106b
Item is equivalent to a draft drawn at the bank b/c it says “payable at” bank.
Forgotten notice may have the bank become a holder in due course if sufficient time has passed.
…
Problem 32: 3-203c
Transferee has a specifically unqualified right to the unqualified indorsement of the transferor
…
Holder in Due Course, Shelter Rule Probs 32- 25, Pgs 100-117
Jones v. Approved Bancredit Corp. (Delaware SC, 1969)
Facts:
Whether the Plaintiff finance company is a holder in due course of the defendant’s
note?
Conclusion:
Finance Co. not a holder in due course under the party-to-the-transaction rule.
Rationale:
Finance company wrote the contract, chose to approve people for contracts, were so
closely connected that they were essentially the original contracting party
Other cases (FL, ect.) support this
Rule of Balance:
Bancredit was so involved w/ transaction that they should not be treated as a
subsequent purchaser for value (not in good faith)
Bancredit denied protected status of holder in due course
…
Sulivan v. United Sealers Corp. (Kentucky Ct of Appeals, 1972)
Facts:
Whether appellee, United Dealers Corp., a finance company, was a holder in due course
of a promissory note executed and delivered by appellants, the Sullivans, in payment for
building materials and labor furnished by Memory Swift Homes, Inc, the payee of the
note?
Conclusion:
To be a holder in due course, notice means at time of the taking or at time the
instrustment is negotiated and not notice arising subsequently
The time when value is given for instrument is decisive
Close business association b/w payee and who purchases an instrument from him
implies knowledge of such facts as to show bad faith or renders him a participant in
original transaction
Here, no allegation of fraud involving the payee of the note and finance company
No claim that finance company could have discovered at time of transfer of instrument
that would indicate defect
Maker of note stated everything was un compliance by contractor
Evidence failed to demonstrate bad faith
…
Shelter Rule:
Basic rule of common law: unqualified transfer of a chose in action places transferee in
transferor’s shoes and gives transferee all the rights of transferor – 3-203b
Even holder in due course rights can pass to person not otherwise entitled to them
Transferee takes “shelter” in transferor
…
Problem 33:
Yes. 2-203b. Transferee didn’t acquoire by fraud or illegality affecting the instrument. But, this
is a gift and there is a rule governing gifts that you can’t be a holder if you’ve been given the
instrument as a gift. So real answer is NO.
…
Problem 34: 3-305a2 and 3-303
Instruments must be transferred for value – and a gift is not for value – 3-305a2
…
Problem 35: 3-305b
May not be able to recover because under 3-305a1 – bankruptcy prevents recovery (insolvency
proceeding)
…
Triffin v. Sommerset Valley Bank (NJ Superior Ct, Appellate Division, 2001)
Facts:
Are checks unenforceable by a holder in due course b/c signature on the checks were
forged or unauthorized?
Conclusion:
All 18 checks meet definition of negotiable instrument – payable to bearer for fixed amt,
appears to have been signed by Hauser thru facsimile as allowed by UCC – identical to
authorized stamp
Lack of authorization is separate issue from whether checks are negotiable instruments
Record indicates that P. has complied w/ reqs of 3-302 and 3-203 – each check cashing
co was a holder in due course – P. submitted the affidavits of the companies alleging
good faith, ect.
Checks then transferred to P. in accordance w/ section 3-203, vesting P. w/ holder in
due course status – Hauser disputes none of this
Hauser contends that checks are invalid b/c they were fraudulent and unauthorized
But has to be apparent on face that it’s fraudulent to violate 3-203; Hauser Co. didn’t
provide evidence of this
The facsimile and authorized signatures were identical
3-308a: D. must specifically deny signature’s validity in the pleadings to shift burden of
establishing validity of signatures to P – but did not do so in the pleadings
Even if they did, signature still has presumption of authenticity absent evidence of
forgery or lack of authorization (such findings of forgery are generally more accessible to
D.)
Hauser uses conclusory statements – which doesn’t constitute a sufficient showing
…
Pgs 117-134: Defenses Against A Holder in Due Course
…
Holder in due course – takes a negotiable instrument free from defenses: 3-305
Obligor = party to the instrument who is being sued by the holder of the instrument (obligor
could be drawer of draft, maker of note, or someone who has indorsed the instrument).
Defense – legal excuse an obligor may have to avoid paying the obligation
Holder in due course takes instrument subject to 3-305(a)(1) defenses which, if true, defeat the
rights of a holder in due course to enforce the instrument
3-305(a)(1): Called real defenses
3-305(a)(2): Personal Defenses (does not defeat rights of a holder in due course)
Recoupment = legal ability to subtract any payment due the amount the person trying to collect
the debt (or that person’s predecessor) happens to owe the debtor. Holder in due course takes
free from this defense.
…
Problem 36:
Father is a holder but not a holder in due course because he did not receive it for value.
However, the shelter rule states that the transferee has the rights of the transferor. So, whole
the father is not a holder in due course, he has the rights of a holder in due course if Jack
Aubrey, son, is a holder in due course.
Aubrey is a holder because he took possession of the instrument. Aubrey took the promissory
note for value, in good faith, and without notice that the instrument is overdue or dishonored.
Thus, Aubrey is a holder in due course. Therefore, the father can claim the rights of a holder in
due course when trying to get paid the value of the instrument.
A person with the rights of a holder in due course takes free from the defense of recoupment.
Thus, Maturin cannot assert his damages against note. There may, however, be a breach of
contract countersuit.
The dog belongs to Aubrey, not the father. The father possesses the note, not Aubrey. Maturin
can press claims against Aubrey, but not the father. The transfer of the note for sailboat has
already passed.
…
Federal Deposit Insurance Corp. v. Culver (USDC, District of Kansas, 1986)
Facts:
D. cannot demonstrate fraud in the factum; P’s motion for summary judgment granted
Rationale:
Real fraud = fraud in the factum -> recognized as a defense against a holder in due
course
Ort case theory: as matter of law, guilty of negligence so as to render him liable if he
was capable of reading, and signed a note, relying upon stranger’s assurance or reading
that it’s another instrument
Here, D. can read, therefore, D. was negligent and therefore liable.
D. alleged excusable ignorance (had no reasonable opportunity to obtain knowledge as
to note’s essential terms but D. has failed to show excusable ignorance necessary to
establish fraud in the factum
D. had reasonable opportunity to obtain knowledge of document’s characteristics
before he signed it
Note was blank (no essential terms such as maturity date ect, were filled out when he
wrote it so D claims he didn’t have reasonable opportunity to learn of terms but when
an incomplete instrument has been completed, holder n due course can enforce that
instrument as if it were completed
One who signs a blank instrument before all essential terms have been completed
creates a blank check that may be enforced by a subsequent holder in due course
according to any terms that are completed by an intervening holder
…
Problem 37:
First off, don’t be that dumb.
Real defense of fraud. Did D. have a reasonable opportunity to obtain knowledge of the
document’s characteristics before he signed it? Yes. He could read.
Excusable ignorance? Anyone who believes some random guy just so happens to own the
Brooklyn Bridge possesses ignorance which is inexcusable.
Doesn’t look like he has a defense.
…
Problem 38:
Tom Minor does. He’s a minor. Holder in due course takes subject to defense of infancy.
….
Problem 39: 3-202, 3-305a +b, 3-306
3-305: Says infancy is a defense for the obligor; holder in due course is subject to infancy
defense
Negotiation is effective even when obtained from an infant – 3-202
…
Sea Air Support Inc. v. Herrmann (Nevada SC, 1980)
Facts:
Herrmann wrote check for $10k payable to Ormsby House, a hotel-casino located in
Carson City, Nevada and exchanged it for three counter checks he had written earlier
that evening to acquire gaming chips
Ormsby house unable to collect proceeds from check due to insufficient funds in H’s
acct
Debt evidence by check assigned to Sea Air Support, Inc, dba Automated Accts
Associates, for collection
Sea Air unsuccessful in collection; filed action v. Herrmann to recover $10,567
District Ct dismissed action on ground that Sea Air’s claim is barred by Statute of Anne;
they appeal
Issue:
Conclusion:
Dismissal affirmed.
Rationale:
Statute of Anne: provides all notes drawn for purpose of reimbursing or repaying any $
knowingly lent or advanced for gaming are utterly void, frustrate, and are of none
effect.
Gambling may be legal but: ct had held that debts incurred and checks drawn for
gambling purposes are void and unenforceable
Here, $10k check clearly drawn for purpose of repaying $ knowingly advanced for
gaming
Law must change thru legislative action
Sea Air claims it’s a holder in due course – Sea Air claims to have “promised” to take
such legal action as necessary to enforce collection – but promise to perform services in
future does not constitute taking for vale under NRS 3-303
Sea Air also had constructive notice b/c check was payable to casino and knew check
had been dishonored – so not a holder in due course
…
Kedzie v. 103rd Currency Exchange, Inc. v. Hodge (Illinois SC, 1993)
Facts:
Fentress agreed to install flood control system at Hodges’ home of Chicago for $900
Partial payment: Beulah Hodge drafted personal check payable to Fred Fentress: A-OK
Plumbing for $500 from joint account
System’s components not delivered; Fentress failed to appear on date for installment
Eric Hodge told Fentress that K was cancelled and also sad he would order Citicorp
Savings not to pay check
Citicorp Savings record – stop-payment order entered the same day
Fentress presented check to Currency Exchange, endorsing it as “Sole Owner” of A-OK
Plumbing, and obtained payment
Currency Exchange later presented check to Citicorp Savings, payment refused in
accordance w/ stop-pay order
Currency Exchange alleged that it was holder in due course – sued Beulah Hodge as
drawer and Fentress for amt stated
Hodge filed counterclaim v. Fentress + also moved to dismiss Currency Exchange’s
action v. her
Hodge asserts illegality of transaction defense: 3-305 which would defeat holder in due
course status – Fentress is not a licensed plumber (affidavits by plumbing board
provided) which is req by Illinois law
Circuit motion granted Hodge’s motion and dismissed Currency Exchange’s action v.
Hodge
Appellate ct affirmed
Issue:
Whether a holder in due course of a check is precluded from payment as against the
drawer where the check was given in exchange for K services for which the provider was
req to be, but was not, a licensed plumber?
Whether noncompliance by Fentress w/ Illinos Plumbing Licensing Law gives rise to
illegality of transaction w/ respect to K for plumbing services so as to bar the claim of
Currency Exchange, a holder in due course of check initially given Fentress?
Conclusion:
P. Bank filed motion for summary judgment v. Ds., seeking recovery of face amt of
Homestead Waiving Promissory Note
Edgar – didn’t show up – default judgement
Gustava Holt – generally denied liability and specifically denied that instrument was
signed by her
She didn’t testify
One of the bank’s witnesses testified, saying that he was there during Holt’s deposition
denying that she signed the instrument
D’s only evidence was set of answers previously filed by bank which indicated that the
Bank didn’t know of any witness who saw D. sign the note or heard her admit such a
thing.
Trial ct struck the motion, leaving it to the jury to decide as fact-finder
Issue:
Was it error for the district ct to deny the motion for summary judgement when the D.
offered no evidence that
Conclusion:
Yes. The D. offered no evidence to rebut the presumption that the signature was
genuine.
Rationale:
Evidence that the plaintiff has not witness to prove that the signature was genuine is
not sufficient to rebut presumption that signature was genuine
D. offered, essentially, no evidence
The answers to interrogatories do not support D’s claim
Cannot be shown by demonstrating P’s apparent lack of evidence
D. failed as a matter of law t make a sufficient showing that she didn’t write signature
…
Herzog Contracting Corp v. McGowen Corp. (US Ct of Appeals, 7 th Circuit, 1992)
Facts:
P. Herzog bought the assrys of Tru-Flex Metal Hose Corp from D. McGowen
P. formed subsidiary of P. to hold the assets
P. assigned the asset purchase agreement to the subsidiary
Tru-Flex to make annual payments to D. for $500k
2 promissory notes, both demand notes, were issued by D. to Tru-Flex in 1989
P. claims it loaned D. $400k and notes were repayment for the loan – D. denied the
$400k were a loan
D. claims it was partial prepayment for next yr’s installment in attempt to postpone the
realization of taxable income to following yr by making the $400k LOOK like a loan
P. refused to make further payments
D. sued P. in an Indiana State Ct for breach of K – currently pending
Tru-Flex assigned D’s promissory note to P. who sued to enforce
District ct: notes are clear and unambiguous and are enforceable regardless of what
parties actually intended.
D. appeals
Issue:
Did district ct err in holding that the notes are clear and unambiguous and enforceable
regardless of what the parties actually intended?
Did D’s claim attempt to vary the promissory notes so as to render them unenforceable
by P. holder?
Conclusion:
Reversed.
Rationale:
According to 3-602, he still has an obligation to pay even if he knows the instrument has
been stolen and he knows the holder is in wrongful possession – so doesn’t seem like
the uncle can stop him
…
The Nature of Liability (Chp 5) (9/18/19) (151-165)
Once a negotiable instrument is created and enters commerce, parties thereto are
automatically locked into relationships that may lead to legal liability
Underlying Obligation – if corp mails a dividend check to a stockholder and check is lost
in the mail, stockholder can sue on underlying obligation (here, the agreement to pay
the dividend) and ignore wtv rights N.I law would give
Party does not always have to bring a suit on the underlying obligation
…
Problem 45:
She can defend by saying that the note somehow suspended his right to sue on the underlying
obligation.
Merger – common law doctrine stated that once an instrument was offered and accepted in
satisfaction for a underlying obligation, the obligation merged w/ the instrument, and until the
instrument was dishonored, the underlying obligation was suspended (unavailable as a cause of
action). Codified in 3-310b.
…
Problem 46: 3-104g – cashier’s check; 3-310a
Cashier’s check was taken for discharge – treated as $ equivalent for discharge. Don’t owe you
diddly squat. Besides, if you wait until tomorrow, the FDIC will fix it.
…
Gray1 CPB, LLC v. SCC Acquisitions, Inc. (Cali Ct of Appeals, 2014)
Facts:
Aug 2010 – Gray1 obtained a judgment in excess of $9.1 million, plus interest, against
defendants for failure to make good on their guaranties of a loan made to LLC owned by
Elieff
Judgmenet provided Gray1 was entitled to attorney feescosts to be est. by cost bill or
motion
Interlineation – ct amended judgment to reflect award of over $1.5 mil in attn fees and
more than $44k in costs
Ds. made no effort to pay until June 8, 2012 – D’s attorney handed Gray1 attonrey a
cashier’s check which he accepted
12 days after receiving check, he filed motion for attorney fees – then deposited the
cashier’s check in a bank
Ct: said that P. attn couldn’t collect fees b/c judgment was already paid.
Issue:
Can the attorney for Gray1 still collect attorney fees when he accepted a cashier’s check
for the full amount + interest but filed a motion for attorney’s fees afterwards?
Conclusion:
No.
Rationale:
Ct explained that ordinarily, the American Rule is following in a Cali jurisdiction unless
otherwise stipulated, each party may bear the cost of their own appeal
Unless otherwise agreed, if cashier’s check is taken for an obligation, obligation is
discharged to same extent that discharge would result if an amt of $ equal to amt of
instrument were taken in payment of obligation – Cali UCC
Gray1 sympathetic – but had 2 years to file motion for attn fees since 2010 til payment
Could also reject cashier’s check – file motion – then pay
…
Problem 47: 3-604, 3-310b4, 3-309
What happens?
Conclusion:
Ward wins.
Rationale:
Suretyship problems come up whenever the maker must get others to lend their names to the
maker’s basic obligation. Can arise in connection w/ checks.
Problem 54:
Principal – Frank; Creditor – Quickie Contractor; Surety – Bank
…
Surety Remedial Rights:
1) Exoneration – equitable right by which surety can compel principal to perform instead of
surety at maturity. Surety can prevent need for later suit for reimbursement
2) Subrogation – If surety pays off creditor, Surety steps into shoes of creditor towards the
principal – if creditor had a lien, surety can get at it – permits surety to become a party to
first contract and enforce it as if the surety were the creditor
3) Contribution – right of partial reimbursement that co-sureties have against each other for
proportionate shares of the debt. 3 people sign note agreeing to be co-suretiesL payee
may enforce entire obligation against anyone of them and right of contribution permits
the one who paid entire amt to sue the other two
4) Strictissimi Juris (of the strictest law)
3-419 – UCC reserves special suretyship rights for those who deliberately lend their names to an
instrument to accommodate another. Applies to accommodation party
…
Problem 55:
a. 3-419c, 3-205d, 3-605h. I think no under 3-419c. \
b. He cannot defend – 3-419b.
c. 3-116a, 3-204a. Maker.
Problem 56:
3-419d: Yes, would have to sue first.
…
Floor v. Melvin (Illinois Appellate Ct, 1972)
Facts:
Action instituted by Marjorie Floor in Circuit Ct to recover $ alleged to be due on
promissory note
D> Melvin, executor of Charles Melvin’s estate, an order was entered dismissed for
failure to state cause of action
Floor seeks reversal on theory that decadent Melvin was guarantor of note
Apr 14, 1959 – Illinois Corp, acting through Prez Melvin, made + issued its negotiable
promissory note in principal amt of $12k., payable to order of Floor
Back of note: “For and in consideration of funds advanced herein to Melco, Inc. we
irrevocably guarantee this note” – Signature of Melvin + others.
Complaint of P. doesn’t allege prosecution of her claim to judgement as against principal
obligor on the note and it, also, doesn’t allege insolvency of obligor
Issue:
Whether, with respect to the undertaking on the back of note, P. is required to prosecute
her claim against the maker of the note as a pre-condition to making a valid claim against
Melvin’s estate?
Conclusion:
COLLECTION, NOT PAYMENT
Rationale:
P. – language is absolute undertaking
“for a valuable consideration, we do hereby guarantee this note” – is a collection
guaranty, not a payment guaranty = SCOTUS
…
Problem 57:
a. Dunno
b. Maybe.
…
Tender of Payment – 3-603 – defined as an unconditional offer by debtor or ibligor to pay
another
a) If tender of payment of an obligation to pay an instrument is made to a person entitled to
enforce the instrument, the effect of tender is governed by principles of law applicable to
tender of payment under a simple contract.
b) If tender of payment of an obligation to pay an instrument is made to a person entitled to
enforce the instrument and the tender is refused, there is discharge, to the extent of the
amount of the tender, of the obligation of an indorser or accommodation party having a
right of recourse with respect to the obligation to which the tender relates.
Problem 58:
a. 3-603c – first sentence. If tender of payment of an amt due on an instrument is made to a
person entitled to enforce the instrument, the obligation of the obligor to pay interest after
the due date on the amt tendered is discharged.
b. There is discharge – 3-603b
c. 3-415a – Stout would have to pay
Problem 59:
Unsure. 3-605 e and g. The bank still might be able to get it.
…
Chemical Bank v. Pic Motors Corp
Facts:
Pic, a car dealership, entered into an inventory financing agreement w/ P. Bank where P.
agreed to lend funds periodically to Pic under line of credit on security of Pic’s inventory
of automobiles as collateral – called floor plan financing
Floor plan financing – borrower draws upon line of credit for purpose of financing
purchase of automobiles for sale
Bank extnds loans w/I credit limit based on value of vehicles purchased by borrower
Upon sale of any vehicle, borrower pays back portion of loan that was granted based on
value of that vehicle so the bank loan always remains secure
Bank conducted periodic inspections of Pc’s inventory to determine whether financed
vehicles were owned by Pic and whether loan was reduced by an appropriate payment
upon sale of financed vehicle
Bank also followed curtailment policy where any loan was proportionately reduced and
finally paid in full for inventory remaining unsol over specified periods of time
Siegel had been director, principal stockholder of Pic for many yrs and head personally
guaranteed the notes in writing
1978 – Siegel sold his interest in company to defendant Robl and resigned as officer and
director of Pic
Undisputed that guaranty continued under all revlevant periods of time
July 1979 – bank informed Siegel he was out of trust – more than 50% of inventory
unaccounted
Siegel arranged for sale of remaining inventory and partial repayment made
Bank instituted suit for balance against Pic and individual gurantors including Siegel
Siegel appeals from summary judgement
Issue:
To defeat summary judgment, is there a trial issue as to whether the bank was obligated
conduct regular inspections + enforce curtailment program and whether
dishonesty/negligence of bank employees operated to impair the collateral and thus
discharge his obligation as gurator
Conclusion:
Summary judgement affirmed
Rationale:
D. Siegel asserts deficiency was caused by failure of Bank to conduct regular inspections
, alleges 2 bank employees who, complicit w/ Robl, submitted incorrect/false inventory
reports; asserts that inspections would continue even after selling interest
Asserts bank + employee activity impaired collateral – relieved him of liability
No provision that obliged bank to conduct inspections or maintain curtailment policy
Parol evidence rule does not allow the terms of K to be varied
Bank had right to release the collateral w/o discharging the guarantor so
dishonesty/negligence of employees is irrelevant
3-606
Siegel was guarantor of payment, not collection – no condition precedent
Terms of guaranty = no obligation to protect/preserve collateral
Express terms of guaranty = bank could release/surrender collateral w/o notifying or
discharging Siegel
…
Problem 60:
a. 3-605e + f – George not discharged in both cases I think.
…
Problem 61:
A. 3-605b, a, g: Doesn’t have to pay unless the release of the first obligor, in the release, the
bank kept a clause which said they still held right to enforce (a2)
B. 3-605c:
C. 3-605D – secondary obligor is discharged to extent of impairment
…
London Leasing Corp. v. Interfina, Inc.
Facts:
May 3, 1966 – Interfina made and delivered to P., a promissory note for $52k, signed by
Evans as Prez of Interfina + also personally indorsed by Evans
Note not paud on due date
Thereafter, Interfina, by Prez, entered into letter agreements w/ P. extending the time for
payment of the note; Evans signed note only in corp capacity
Issue:
Whether a corp officer (Prez) who makes a note on behalf of his corp and also personally
indorses the note is discharged from personal liability on the note by an agreement
between the payee and the corporate maker, by its said Prez, which extends the corp’s
time to pay the note? Motion of summary judgement
Conclusion:
Summary judgement granted. Sum of $19,500 due on note by D.
Rationale
Evans claims that extension agreements, which were not signed by him personally,
discharged him from liability on the note as a matter of law b/c he didn’t personally
consent to the extension
3-606 governs )now 3-605: 1960s case so maybe not now anymore)
Consent can be implied from surrounding circumstances or from conduct (doesn’t have to
be express)
Evans signed in corporate capacity for extension; D’s conduct implied consent.
…
10/1/19 – Pgs 190 – 218/ Problems 64 – 73
…
Problem 64:
A technical dishonor has not been made (3-501b3i + 3-501b2iii) – so Grosvenor would not be
obligated to pay.
…
Problem 65: 3-404 – old checks; 3-414f
3-414f: Drawer would have to assign rights to drawee.
…
Messing v. BoA, N.A. (Maryland Ct of Appeals, 2002)
Issue: Whether BoA’s practice of requiring non-account check holders to provide a
thumbprint signature before it will honor a check is lawful?
Messing: claims not lawful; files suit for declaratory judgment
Appellant bank filed motion for summary judgement; granted; appealed
Aug 3, 2000: appellant attempted to cash check for $976 at Light Street branch of
appellee; check was made out to appellant and drawn on a BoA customer checking acct
Appellant handed check to teller; teller confirmed availability of finfd and placed check
in a computer validation slot; funds validated; computer stamped the time, date, and acct
number and teller number; also placed a hold on the $ in the drawer’s acct
Teller gave check back to appellant to endorse; appellant endorsed; teller asked appellant
for id. Driver’s license + credit card – info transferred to back of check
Teller asked appellant if he was a BoA customer – Appellant said no – teller asked for
thumbpring signature on check in accordance w/ policy
Appellant said no thumbprint
Appellant requested info on thumbprint policy; manager said no info available
Teller released hold on $ in drawer’s bank; voided transaction in comp, and put cash back
in teller drawer.
Complaint.
…
Problem 66:
Yes, the clause works as a waiver of rights.
…
Problem 67:
3-415e; 3-504(a)(iv)
Looks like he’s discharged for presentment. the drawer or indorser whose obligation is being
enforced has waived presentment or otherwise has no reason to expect or right to require
that the instrument be paid or accepted,
…
10/31/19 - Forged indorsements, warranties, conversion, 343-355, problems 115-124: Chapter 8:
Wrongdoing and Error