The following is a short summary of a situation followed by two brief
questions regarding the summary.
Be Careful What You Endorse. Jim Bass is in possession of a
negotiable promissory note. Bass acquired the note from Mary Frank for
value. Mary Frank acquired the note from Sam Peters also for value.
Sam Peters acquired the note for value from the payee, John Caruthers.
The maker of the note was Jackson. The following endorsements appear
on the back of the note:
Pay to the order of Sam Peters
John Caruthers
Without Recourse,
Sam Peters
Bass presented the note to Jackson for payment on its due date.
a. Explain why neither Bass nor Mary Frank endorsed the note.
b. Assume that Jackson refuses to pay the note because he has no
money. What recourse does Bass have on the note to recover his money?
Discuss all possible alternatives available to Bass. Be sure to
address the obligations, if any, of Mary Frank, Sam Peters, and John
Caruthers. |
