b. What are Sunset Bank’s rights with regard to Roe and Smith?

Jump to Solution
Category:

b. What are Sunset Bank’s rights with regard to Roe and Smith?

0
0

Alpha orally appointed Omega as his agent to find and purchase for him a 1930 Dodge automobile in good condition, and Omega located such a car. Its owner, Roe, agreed to sell and deliver the car on January 10, 2017, for $9,000. To evidence the purchase price, Omega mailed to Roe the following instrument:

December 1, 2016 $9,000.00

We promise to pay to the order of bearer Nine Thousand Dollars with interest from date of this instrument on or before January 10, 2017. This note is given in consideration of John Roe transferring title to and possession of his 1930 Dodge automobile.

(Signed) Omega, agent

Smith stole the note from Roe’s mailbox, indorsed Roe’s name on the note, and promptly discounted it with Sunset Bank for $8,700. Not having received the note, Roe sold the car to a third party. On January 10, the bank, having discovered all the facts, demanded payment of the note from Alpha and Omega. Both refused payment.
a. What are Sunset Bank’s rights with regard to Alpha and Omega?

Alpha orally appointed Omega as his agent to find and purchase for him a 1930 Dodge automobile in good condition, and Omega located such a car. Its owner, Roe, agreed to sell and deliver the car on January 10, 2017, for $9,000. To evidence the purchase price, Omega mailed to Roe the following instrument:

December 1, 2016 $9,000.00

We promise to pay to the order of bearer Nine Thousand Dollars with interest from date of this instrument on or before January 10, 2017. This note is given in consideration of John Roe transferring title to and possession of his 1930 Dodge automobile.

(Signed) Omega, agent

Smith stole the note from Roe’s mailbox, indorsed Roe’s name on the note, and promptly discounted it with Sunset Bank for $8,700. Not having received the note, Roe sold the car to a third party. On January 10, the bank, having discovered all the facts, demanded payment of the note from Alpha and Omega. Both refused payment.
b. What are Sunset Bank’s rights with regard to Roe and Smith?

Explanation & AnswerSolution by a verified expert

Explanation

The instrument is signed by Individual O, who is the agent of Individual A. Individual O wrote the instrument on behalf of Individual A, but Individual O did not mention the name of Individual A on the instrument. This makes Individual O, and not Individual A, responsible for the payment to the bank against the instrument.

Verified Answer

Individual O has signed the instrument and has not disclosed the name of the principal, Individual A. So, the bank can hold Individual O liable for the instrument but not Individual A.

Explanation

As the note written and signed by Individual O, the agent in the contract, to Individual R was stolen by Individual S, Individual R cannot be held liable for the payment against the instrument.
Individual S has forged the signature of Individual R and has falsely represented the instrument in the bank; Individual S is going to be held liable by the bank for payment against the instrument.

Verified Answer

The bank cannot hold Individual R responsible for the payment since the signature of Individual R was forged by Individual S. Whereas, Individual S can be held liable for forgery and the bank can recover the amount from Individual S against the instrument.

Purchase this answer to view it. $5
Login/Sign up for free, load your wallet instantly using PayPal or cards and purchase this solution to view it.

Looking for the solution to this or another homework question?

If you need essay writing assistance or homework solutions, log in or sign up for a free account and ask our writers any homework question.