1. Waldo makes out a negotiable promissory note payable to the order of Grace. Grace indorses the note by writing on it “Without recourse, Grace” and transfers the note for value to Adam. Adam, in need of cash, negotiates the note to Keith by indorsing it with the words “Pay to Keith, Adam.” On the due date, Keith presents the note to Waldo for payment, only to learn that Waldo has filed for bankruptcy and will have all debts discharged. Discuss fully whether Keith can hold Waldo, Grace, or Adam liable on the note.
Discuss whether Keith can hold Waldo, Grace, or Adam liable on the note. Your post should be at least 100 words in length.
2. Gary goes grocery shopping and carelessly leaves his checkbook in his shopping cart. His checkbook, with two blank checks remaining, is stolen by Dolores. On May 5, Dolores forges Gary’s name on a check for $100 and cashes the check at Gary’s bank, Citizens Bank of Middletown. Gary has not reported the loss of his blank checks to his bank. On June 1, Gary receives his monthly bank statement from Citizens Bank. The statement shows the forged check, but Gary does not examine it. On June 20, Dolores forges Gary’s last check for $1,000 and cashes it at Eastern City Bank, a bank with which she has previously done business. Citizens Bank honors the check. On July 1, Gary receives another bank statement, discovers both forgeries, and immediately notifies Citizens Bank. Dolores cannot be found. Gary claims that Citizens Bank must recredit his account for both checks, as his signature was forged. Discuss fully Gary’s claim.
Discuss who is most likely to suffer the loss for the checks paid with Brooks’ forged signature, and why. Your post should be at least 100 words in length.