Holder in Due Course. Through negotiation, Emilio has received from dishonest payees two checks with the following histories:

(a) The drawer issued a check to the payee for $\$ 9$. The payee cleverly altered the numeral amount on the check from $\$ 9$ to $\$ 90$ and the written word from "nine" to "ninety."

(b) The drawer issued a check to the payee without filling in the amount. The drawer authorized the payee to fill in the amount for no more than $\$ 90$. The payee filled in the amount of $\$ 900$.

Discuss whether Emilio, by giving value to the payees, can qualify as a holder in due course of these checks. (See Holder in Due Course.)

A Question of Ethics-The IDDR Approach and Arbitration. John McAdams is a tenured professor of political science at Marquette University. McAdams posted a comment on his blog criticizing Cheryl Abbate, a philosophy instructor, for ber interchange with a student in her Theory of Ethics class. Lynn Turner, also a member of the faculty, expressed a negative opinion of McAdams's comment in a letter to the Marquette Tribune. Meanwhile, on Abbate's complaint, the university convened the Faculty Hearing Committee (FHC)_which consists entirely of faculty members, including Turner-to consider the case. Acting on the FHC's recommendation, Marquette suspended McAdams for a semester without pay and ordered him to apologize to Abbate. He refused, and filed a suit in a Wisconsin state court against Marquette. [McAdams v. Marquette University, $383$ Wis.$2$d $358$, $914$ N. W.$2$d $708$ $(2018$)] (See Alternative Dispute Resolution.)

• Apply the IDDR approach to consider the ethics of Marquette's convening of the FHC in McAdams's case.
• From a legal perspective, was the university's disciplinary procedure the functional equivalent of arbitration, limiting McAdams's right to litigate his claim in court? Explain.

A mere holder can improve his or her status to that of an HHDC by selling the instrument to an HDC and then reacquiring it. True or False?

Indorsements. A check drawn by Cullen for $\$ 500$ is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $\$ 500$ in rent and transfers the check to his landlord with the following indorsement: "For rent paid, [signed] Jordan." Jordan's landlord has contracted to have Deborah do some landscaping on the property. When Deborah insists on immediate payment, the landlord transfers the check to Deborah without indorsement. Later, to pay for some palm trees purchased from Better-Garden Nursery, Deborah transfers the check with the following indorsement: "Pay to Better-Garden Nursery, without recourse, [signed] Deborah." Better-Garden Nursery sends the check to its bank indorsed "For deposit only, [signed] Better-Garden Nursery." (See Indorsements.)

(a) Classify each of these indorsements.

(b) Was the transfer from Jordan's landlord to Deborah, without indorsement, an assignment or a negotiation? Explain.

.Appellate, or Reviewing, Courts. Angelica Westbrook was employed as a collector for Franklin Collection Service, Inc. During a collection call, Westbrook told a debtor that a $\$15$ processing fee was an "interest" charge. This violated company policy. Westbrook was fired. She filed a claim for unemployment benefits, which the Mississippi Department of Employment Security (MDES) approved. Franklin objected. At an MDES hearing, a Franklin supervisor testified that she had heard Westbrook make the false statement, although she admitted that there had been no similar incidents with Westbrook. Westbrook denied making the statement, but added that if she had said it, she did not remember it. The agency found that Franklin's reason for terminating Westbrook did not amount to the misconduct required to disqualify her for benefits and upheld the approval. Franklin appealed to a state intermediate appellate court. Is the court likely to uphold the agency's findings of fact? Explain. [Franklin Collection Service, Inc. v. Mississippi Department of Employment Security, $184$ So.$3$d $330$ (Miss.App. $2016$)] (See The State and Federal Court Systems.)

After World War II ended in $1945$, an international tribunal of judges convened at Nuremberg, Germany. The judges convicted several Nazi war criminals of "crimes against humanity." Assuming that the Nazis who were convicted had not disobeyed any law of their country and had merely been following their government's (Hitler's) orders, what law had they violated? Explain.

A check drawn by Cullen for $\$500$ is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $\$500$ in rent and transfers the check to his landlord with the following indorsement: “For rent paid, [signed] Jordan.” Jordan’s landlord has contracted to have Deborah do some landscaping on the property. When Deborah insists on immediate payment, the landlord transfers the check to Deborah without indorsement. Later, to pay for some palm trees purchased from Better-Garden Nursery, Deborah transfers the check with the following indorsement: “Pay to Better-Garden Nursery, without recourse, [signed] Deborah.” Better-Garden Nursery sends the check to its bank indorsed “For deposit only, [signed] Better-Garden Nursery.” (See Indorsements.)

(b) Was the transfer from Jordan’s landlord to Deborah, without indorsement, an assignment or a negotiation? Explain.

Abby Novel signed a handwritten note that read, "Glen Gallwitz $1-8-2002$ loaned me $5,000$ dollars at $6$ percent interest a total of $10,000.00$ dollars." The note did not state a time for repayment. Novel used the funds to manufacture and market a patented jewelry display design. More than seven years after Novel signed the note, Gallwitz filed a suit to recover the stated amount. Novel claimed that she did not have to pay because the note was not negotiable-it was incomplete. Is she correct? Explain.

Seal Polymer Industries sold two freight containers of latex gloves to Med-Express, Inc., a company based in North Carolina. When Med-Express failed to pay the $104,000 owed for the gloves, Seal Polymer sued in an Illinois court and obtained a judgment against MedExpress. Med-Express argued that it did not have minimum contacts with Illinois because it was incorporated under North Carolina law and had its principal place of business in North Carolina. Therefore, the Illinois judgment based on personal jurisdiction was invalid. Was this argument alone sucient to prevent the Illinois judgment from being collected against Med-Express in North Carolina? Why or why not? [Seal Polymer Industries v. Med-Express, Inc., 725 S.E.2d 5 (N.C.App. 2012)]

Bearer Instruments. Adam's checks are imprinted with the words "Pay to the order of" followed by a blank. Adam fills in an amount on one of the checks and signs it, but he does not write anything in the blank following the phrase "Pay to the order of." Adam gives this check to Beth. On another check, Adam writes in the blank "Carl or bearer." Which, if either, of these checks is a bearer instrument, and why?

A check drawn by Cullen for $\$500$ is made payable to the order of Jordan and issued to Jordan. Jordan owes his landlord $\$500$ in rent and transfers the check to his landlord with the following indorsement: “For rent paid, [signed] Jordan.” Jordan’s landlord has contracted to have Deborah do some landscaping on the property. When Deborah insists on immediate payment, the landlord transfers the check to Deborah without indorsement. Later, to pay for some palm trees purchased from Better-Garden Nursery, Deborah transfers the check with the following indorsement: “Pay to Better-Garden Nursery, without recourse, [signed] Deborah.” Better-Garden Nursery sends the check to its bank indorsed “For deposit only, [signed] Better-Garden Nursery.” (See Indorsements.)

(a) Classify each of these indorsements.

Promissory Notes. A college student, Austin Keynes, wished to purchase a new entertainment system from Friedman Electronics, Inc. Because Keynes did not have the cash to pay for the entertainment system, he offered to sign a note promising to pay $\$ 150$ per month for the next six months. Friedman Electronics, eager to sell the system to Keynes, agreed to accept the promissory note, which read, "I, Austin Keynes, promise to pay to Friedman Electronics or its order the sum of $\$ 150$ per month for the next six months." The note was signed by Austin Keynes. A week later, Friedman Electronics, which was badly in need of cash, signed the back of the note and sold it to the First National Bank of Halston. Give the specific designation of each of the three parties on this note.

Negotiability. Juan Sanchez writes the following note on the back of an envelope: "I, Juan Sanchez, promise to pay Kathy Martin or bearer $\$ 500$ on demand." Is this a negotiable instrument? Discuss fully.

Arbitration. PRM Energy Systems owned patents licensed to Primenergy to use in the United States. Their contract stated that "all disputes" would be settled by arbitration. Kobe Steel of Japan was interested in using the technology represented by PRM's patents. Primenergy agreed to let Kobe use the technology in Japan without telling PRM. When PRM learned about the secret deal, the firm filed a suit against Primenergy for fraud and theft. Does this dispute go to arbitration or to trial? Why? [PRM Energy Systems v. Primenergy, $592$ F.$3$d $830$ ($8$th Cir. $2010$)] (See Alternative Dispute Resolution.)