II. Hari Holda received a check from his sister in return for a used stereo. She
ID: 2425157 • Letter: I
Question
II. Hari Holda received a check from his sister in return for a used stereo. She had received it from Steve Stevens a few days before she gave it to her brother. It was given to her in return for a promise to paint Stevens’ house. The check was drawn by Darwin, Inc. on First Bank in the amount of $1,500.00 and was originally payable to Penny Paul for salary due her. It had the following endorsements on the back.
1. s/Penny Paul
2. Without Recourse
s/Ed Esquire
3. Pay to Nanci Holda
s/Steve Stevens
4. Pay to Hari Holda
When Nanci gave the check to Hari she forgot to sign her name. Before Hari could get his sister’s signature he learned that Penny Paul had been fired from her job for submitting a fraudulent time sheet. Hari then located his sister and got her to sign the back of the check. He then endorsed the check and deposited it in his account at Second Street Bank only to have it returned to him two days later since it was dishonored by First Bank pursuant to Darwin’s stop payment order.
(15) 2. Discuss in detail what, if any, recourse Hari has against ALL the other
Parties. Provide specific legal reasons for your conclusions.
(5) 3. What should Hari do to protect his legal rights when he receives the check from Second Street Bank?
Explanation / Answer
as per law the endorsee of a legally endorsed negotiable instrument who acts in a good faith to accept the instrument can ask any of the endorsers to honour the cheque.
so in the present case as Hari has acted in good faith he has the right to go to the company for getting the cheque honoured for his loss after it has been dishonoured by the bank.
all the previous oweners all equally legaly liable to hari for payment. and he can sue any of the endorsers.