Bus Law II Chapters 14, 15, & 16
On Monday, Ellery deposits in her account at Fiscal Bank a local check for $500. Within one business day from the date of deposit, Ellery can withdraw
$500
Ana writes a check to Becky on Ana's account at Community Bank. The bank dishonors the check even though Ana has sufficient funds in her account. The bank is liable to
Ana
Daria writes a check to Education Loan Management, Inc., that is drawn on Daria's account at First Federal Bank. If the bank does not accept the check, liability for its amount for its amount is on
Daria
Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Fields Bank. Ervin later orders the bank not to pay the check, but the bank pays it over Ervin's order. Subeaquent checks written on Ervin's account "bounce." Most likely liable for the costs to Ervin is
Garden Fields Bank
Foster forges Greta's signature on a check "payable to the order of Foster" drawn on Greta's account in Hearthside Bank. Most likely, if the bank pays the check
Hearthside will have to re-credit Greta's account
Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is
Nicol only
Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party responsible for paying the check is
State Bank
To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay to "Verity Mortgage Service" $160,000 with interest in installments with the final payment due July 10, 2045. To be negotiable must include the signature of
Uri
Norma files a petition in bankruptcy. She turns her assets over to O'Brien, who sells them and then distributes the proceeds to Norma's creditors. O'Brien is
a bankruptcy trustee
Barry draws a check payable to "cash" and presents it to Dollars & Sense store for payment. This instrument is
a bearer instrument
Avril receives a payroll check from Business Solutions, Inc., and endorses it by signing her name on the back of the check. This is
a blank indorsement
Elmore pays First National Bank $1,000 plus a service fee to draw a check on itself made payable to Go Delivery Service. This is
a cashier's check
Keanu delivers an instrument to Laura that states 'pay to the order of Laura'. Laura then presents the instrument to MegaBank for payment. This instrument is the most common type of negotiable instrument, which os
a check
Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when
a debtor's creditors force the debtor into bankruptcy proceedings
Joe files a petition in Bankruptcy. The initial proceeding on this petition will be in
a federal bankruptcy court
Lenders Bank provides Molly with a mortgage to buy a home. Six years into the term of the loan, Molly loses her job and is unable to make the payments. Possible methods for these parties to avoid foreclosure include all of the following except
a prepayment penalty
Reliance Collection Agency pays Security Consumer Credit in good faith for a number of unpaid promissory notes. Security warrants that the notes have not been altered. This is
a presentment warranty
Thalia signs an instrument unconditionally promising to pay to "Union Bank" $7500 with interest in installments with the final payment due June 1, 2017. The instrument that Thalia signed is most likely
a promissory note
Emily writes and signs a check payable to "Festival Cinema." Georg, Festival's manager, indorses the check "For deposit only." This is
a restrictive endorsement
LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas by LNG to Midstates. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstate Utility signs and dates the draft. This instrument is
a trade acceptance
Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks. The bookstore deposits the check in its account in Eagle Bank. This check is
a type of draft
Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know, or have reason to know that Wren stole the check. Vicenzo is
an HDC
Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number. She is then able to withdraw $500 in cash. Jackie is using
an automated teller machine
Patty files a petition in bankruptcy. At the moment of filing
an automatic stay goes into effect
Jessie's debt to Karla is past due. Karla brings a legal action against Jessie to collect the debt. Karla asks the court to order Liberty Bank, in which Jessie has an account, to pay a portion of the funds to Karla. This is a request for
an order of garnishment
Erin draws a check payable to "Foodland" to buy groceries. Refer to Fact Pattern 14-1. Erin's check is mostly
an order to pay
Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is
an ordinary holder
Travis signs a check "pay to the order of Umberto" drawn on Travis's account in Valley Bank. Travis has $400 in his account but the amount of the check is $500, which the bank pays. This creates
an overdraft
Roland files for Chapter 7 bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Roland's remaining debts, subject to certain exceptions
are discharged
Builders Exchange, Inc., issues an instrument in favor of Custom Construction Company. for the instrument to be negotiable, it must
be payable on demand or at a definite time
The payment of Olinda's debit to Prudent Loan Company is guaranteed by Olinda's personal property. Prudent is most likely to perfect its interest by
filing a financing statement with the appropriate authority
Vito borrows $150,000 from Workers & Farmers Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is
foreclosure
Natural Resource Investment Company and Mega Bank are secured parties with security interests in property owned by LNG Gas Corporation. Between these interests, the first to be filed or perfected has priority over other filed or perfected security interests in
general, subject to exceptions
Mort transfer an instrument to Neal. This is a negotiation if the transfer is
in such form that Neal becomes a holder
Nell's debt to Olsen is past due. Olsen obtains an order of garnishment to require Nell's employer Pro Transmission Service, Inc., to pay part of Nell's paycheck to Olsen. The law
limits the amount that can be taken from Nell's take-home pay.
Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank may 5. Unaware of Gary's death, the bank
may pay the check
To finance the purchase of an electric guitar and amplifier from Leon's Guitars, Milo signs an instrument promising to pay to "National Lenders" $1800 with interest in installments and the final payment due August 15, 2016. To be negotiable, this instrument must include on its face
not any conditional promises or orders to pay
Bernice signs a promissory note $1500 in favor of Community College. The note is undated but specifies that it is "payable one month after date." This note is
not negotiable, because the maturity date cannot be determined from the face of the instrument.
Talia, who is not an Urban Bank customer, attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank
refuses to pay it.
On the back of a check payable to Nero, Nero writes "Pay to Odell, without recourse" and signs it. This
relieves Nero of liability on the check if he has not breached any transfer warranties
Wild River Tours Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business. To accomplish this goal, Wild River should file a petition in bankruptcy for relief through
reorganization
Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is
the drawee
Drew sign a check "pay to the order of Eastern State University" drawn on Drew's account in Fidelity Bank to pay her tuition. Drew is
the drawer
LNG Corporation and Midstates Company enter a contract for a sale of liquedied natural gas by LNG to Midstate. LNG draws a draft unconditionally ordering Midstates utility ti pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft. On this instrument, LNG is
the drawer
Erin draws a check payable to "Foodland" to buy groceries. Refer to Fact Pattern 14-1. With respect to Erin's check, Foodland is
the payee
Franco buys a sound system from Georg's garage sale. Franco writes Georg a check for $250 to pay for the system. George is
the payee
Thalia signs an instrument unconditionally promising to pay to "Union Bank" $7500 with interest in installments with the final payment due June 1, 2017. With respect to this instrument, Union Bank is
the payee
Debit & Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by
the time of perfection or attachment
Milos files a petition in bankruptcy. His dischargeable debts include
unsecured credit-card debt
Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to Elegant Jewelers for payment. If the check is not backed by sufficient funds, Cleo may be prosecuted for
writing a bad check