Marcus issues a negotiable promissory note payable to the order of Parish for the amount of $3,000. Parish raises the amount to $13,000 and negotiates it to Hilda for $12,000.
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Marcus issues a negotiable promissory note payable to the order of Parish for the amount of $3,000. Parish raises the amount to $13,000 and negotiates it to Hilda for $12,000. Marcus issues a negotiable promissory note payable to the order of Parish for the amount of $3,000. Parish raises the amount to $13,000 and negotiates it to Hilda for $12,000. |
Explanation
Individual H is a holder in due course here. Because of this reason, Individual H has the right to recover the said amount from Individual M and Organization P. If Individual H was aware of the alterations that happened to the instrument while accepting it, then Individual H would have lost the status of the holder in due course, which is not the case here. If Individual M negligently caused the instrument to be tampered with, Individual H has the responsibility to pay not just the initial $3,000 but the complete amount of $13,000. However, Individual H can recover this amount from either Individual M or Organization P.
Sample Response
Individual H can recover $3,000 from Individual M and $13,000 from Organization P. If it was the negligence of Individual M that paved way for alteration in amount, Individual H can recover a total amount of $13,000 from either Individual M or Organization P.
