On the back of the note, Fitch indorsed, “Pay to the order of Farmers Bank of Erehwon /s/ Frank Fitch” and delivered it to the bank in exchange for $6,000.

Category:

 On the back of the note, Fitch indorsed, “Pay to the order of Farmers Bank of Erehwon /s/ Frank Fitch” and delivered it to the bank in exchange for $6,000.

0
0

Tate and Fitch were longtime friends. Tate was a man of considerable means; Fitch had encountered financial difficulties. To bolster his failing business, Fitch desired to borrow $6,000 from Farmers Bank of Erehwon. To accomplish this, he persuaded Tate to aid him in the making of a promissory note by which it would appear that Tate had the responsibility of maker, but with Fitch agreeing to pay the instrument when due. Accordingly, they executed the following instrument:

December 1, 2017

Thirty days after date and for value received, I promise to pay to the order of Frank Fitch the sum of $6,600.

/s/ Timothy Tate

On the back of the note, Fitch indorsed, “Pay to the order of Farmers Bank of Erehwon /s/ Frank Fitch” and delivered it to the bank in exchange for $6,000.
a. If the note is not paid at maturity, may the bank, without first demanding payment by Fitch, recover in an action on the note against Tate? Why or why not?

Tate and Fitch were longtime friends. Tate was a man of considerable means; Fitch had encountered financial difficulties. To bolster his failing business, Fitch desired to borrow $6,000 from Farmers Bank of Erehwon. To accomplish this, he persuaded Tate to aid him in the making of a promissory note by which it would appear that Tate had the responsibility of maker, but with Fitch agreeing to pay the instrument when due. Accordingly, they executed the following instrument:

December 1, 2017

Thirty days after date and for value received, I promise to pay to the order of Frank Fitch the sum of $6,600.

/s/ Timothy Tate

On the back of the note, Fitch indorsed, “Pay to the order of Farmers Bank of Erehwon /s/ Frank Fitch” and delivered it to the bank in exchange for $6,000.
b. If Tate voluntarily pays the note to the bank, may he then recover on the note against Fitch, who appears as an indorser? Why or why not?

Explanation & AnswerSolution by a verified expert

Explanation

Individual F is just an intermediate endorser in the exchange of the note between Individual T and the bank. The maker of the note is Individual T and the bank is going to approach Individual T first to recover the amount of the note since Individual T has the primary responsibility of payment against the note.

Verified Answer

Individual T, being the maker of the note, has the primary responsibility against the note.

Explanation

In the contract between Individual T and the bank, Individual F acts as an accommodated party and Individual T is the accommodating party. If Individual T wants, then they can ask for the reimbursement of the instrument amount, which Individual T has already paid to the bank, from Individual F.

Verified Answer

Individual T, being the accommodation party in the contract, can recover the amount paid against the note from Individual F, the accommodated party.

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.


Get Help With Your Assignments

Place your order now and get a quality plagiarism-free paper via email.

Write My Paper For Me