1. McCutchon wrote a check payable to cash while he was in a supermarket. Before he got to the cashier,...


1. McCutchon wrote a check payable to “cash” while he was in a supermarket. Before he got to the cashier, he realized that he had lost the check. Is this a bearer instrument, payable to any holder?
2. Poulakis sold a computer using fraudulent means to Welson, who paid for the machine with a promissory note for $ 1,200. When Welson discovered the fraud, she refused to honor the note when it was presented for payment by a subsequent holder. Welson claimed fraud as a defense. Will Welson succeed in avoiding payment to a holder in due course?
3. Locke gave two promissory notes to Consumer Food, Inc., in payment for merchandise he purchased. The notes said, “Buyer agreed to pay to seller.” Consumer Food, Inc., assigned the notes to Aetna Acceptance Corporation. Were these notes negotiable instruments?
4. Gentilotti, father of an illegitimate son, drew a check for $ 20,000 in 1969 payable to the son’s order. The check was dated July 1, 1985, but provided on the face of the check that, should Gentilotti die before that date, “this check shall be payable immediately.” Gentilotti issued the check to the son’s mother, the legal guardian. Gentilotti died on July 4, 1980. Despite the available funds, the bank, acting on orders of Gentilotti’s executor, refused payment when the check was presented. The drawer’s executor refused payment on the grounds that the obligation was not due. Was the postdated check valid?

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Question Posted: October 01, 2015 03:17:31