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hotpotato |
03/05/07 |
can you help me in these ones too? thanks!
7. Laurie is a fine art dealer, specializing in Inuit carv¬ings. Claude agreed to purchase a large soapstone sculpture of a polar bear. By way of payment, Claude provided
A cheque for the purchase price of $25 000. The cheque was drawn on Claude's account at the Bank of St Albert. Because the amount was so large, the cheque was certified by the drawee bank. Laurie subsequently presented the cheque to the bank for pavment. The bank, however, refused to do so on 2 grounds. First, at the time of certification, it had overlooked the fact that Claude's account held far less than $25 000. That is still true. Second, after certification, but before Laurie presented the cheque for payment, Claude had gone to the bank and issued a countermand or stop order payment. In the circumstances, does Laurie have a right to receive payment from the Bank of St Albert? Does it matter whether the cheque was certified by Claude, as drawer, or by Laurie, as payee?
8. After opening up her first bank account, Chloe sat Around with her friends one evening, playing with her new cheques. As a joke, she made a cheque for $10 000 payable to "Superman." At the end of the evening, Chloe simply threw that cheque into a trash can. During the evening, Simon, who works as a jan¬itor in Chloe's apartment building, found the cheque and put it in his pocket. A few days later, he gave it to Ivan in exchange for a car engine. Ivan presented the cheque to Chloe's bank, which honoured the instrument and debited $10 000 from Chloe's account. Chloe has sued the bank on the basis that it disposed of her money without her authority. She Insists that it must pay $10 000 to her. Is she correct? Explain your answer.
9. In late January, Kurtz Enterprises purchased office supplies from Kilgore Equipment. It paid with a Promissory note for $25 000 that was made to the order of Kilgore Equipment and was due on September 1. In June, Kilgore specially endorsed the note and sold it to Willard Financial Inc. On September 1, Willard tried to claim $25 000 from the maker, only to discover that Kurtz Enterprises had disappeared. Over the next week, the president of Willard discussed the situation with her lawyer and accountant. On September 8, she contacted Kilgore Equipment and demanded payment. She took the position that Kilgore was liable on the basis of its endorsement. Is she correct? Explain your answer.
10. Dr Gaius, a veterinarian, bought a large shipment of medicine from George Taylor, who operated a med¬ical supply company. Payment was made by way of a promissory note for $50 000, which was payable to Taylor in five equal monthly instalments beginning on August 15. Because Taylor doubted Dr Gaius's financial security, he required her to arrange for another signature to be added to the instrument. Dr Gaius persuaded her friend Cornelius McDowall to sign the back of the document alongside the words: "I will pay the debt if Dr Gaius cannot." The note also contained an acceleration clause. On the morn¬ing of August 15, Taylor telephoned Dr Gaius and reminded her that the first instalment of $10 000 was due. Using information that she had previously received from him, she deposited that amount into his bank account. In the early afternoon on the same day, Taylor sold the note to Kym Heston, who was unaware that Dr Gaius had already made the first payment. Not surprisingly, when Heston requested payment later that same day, Dr Gaius objected on the basis that she had already paid $10 000 to Taylor. Heston is sympathetic and points out that she had also been conned by Taylor, who had since disap¬peared. Nevertheless, having bought the note from Taylor, Heston wants payment. Is she entitled to any money? If so, when and from whom?
11. Earl Tetley worked as a payroll clerk for Tinwings Inc. Over the course of several months, he defrauded the company of about $250 000. His plan was simple. He drafted cheques, on behalf of the company, that were payable to people who had recently quit or been fired from Tinwings. He then forged the payees' blank endorsements and presented the cheques to the drawee, the Bank of Manitoba. The bank honoured the cheques, paid the money to Earl, and debited Tinwings's account. Tinwings eventually discovered that scheme. Although it normally would have con-tacted the police immediately, it hesitated to do so because Earl was the company president's nephew. Tinwings therefore agreed that it would keep the sit¬uation quiet as long as Earl repaid the money with interest within 18 months. After a year and a half, however, Earl had made only a token repayment of $5000. Earl has since been convicted and imprisoned for his fraud. Without any other option, Tinwings has now sued the Bank of Manitoba. The company argues that since the endorsements on the cheques were forged, the bank had no authority to debit its account. Is that correct? Explain your answer.
12. Marlon bought a delivery van for his business from Tanita for $20 000. Half of the purchase price was paid with cash, and the other half with a cheque that was payable to bearer. After meeting with Marlon, Tanita took the subway back to her office. Unfortunately, she forgot her purse, which con¬tained both the cash and the cheque that she had received from Marlon, on the subway. After several days of frantic phone calls, it became clear to Tanita that the person who picked up her purse did not intend to return it. Has Tanita necessarily suffered $20 000 loss? What should she do to minimize damage? What should Marlon do?
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