Smith and Roberson’s Business Law
17th Edition
ISBN: 9781337094757
Author: Richard A. Mann, Barry S. Roberts
Publisher: Cengage Learning
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Chapter 6, Problem 13CP
Summary Introduction
Case summary:
Person K obtained a loan of $6,000 from Person W. Five days later, Person W receives a check from person K’s attorney for $6,000. Person W deposits the check in bank and few days later learned that the bank account was closed and had been running a negative balance.
To discuss: If person K issued a bad check illegally.
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Abigail is in the business of selling fine antiques. Abigail purchased an antique desk for $5,000 from Jackson, and gave a promissory note for payment. Concerned that Jackson might not accept the note, Abigail had her friend Catalina sign the promissory note as well. Jackson accepted the note as payment. Two weeks later, Jackson sought payment on the note. Abigail told Jackson that she is not responsible for the promissory note because Catalina signed the note too, and Jackson had to seek payment from Catalina first.
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Jones drew a check for $1,000 on The First Bank and mailed it to the payee, Thrift, Inc. Caldwell stole the check from Thrift, Inc.; chemically erased the name of the payee; and inserted the name of Henderson as payee. Caldwell also increased the amount of the check to $10,000 and, by using the name of Henderson, negotiated the check to Willis. Willis then took the check to The First Bank; obtained its certification on the check; and negotiated the check to Griffin, who deposited the check in The Second National Bank for collection. The Second National Bank forwarded the check to the Detroit Trust Company for collection from The First Bank, which honored the check. Griffin exhausted her account in The Second National Bank, and the account was closed. Shortly thereafter, The First Bank learned that it had paid an altered check. What are the rights of each of the parties?
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Smith and Roberson’s Business Law
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