Transfer by Negotiation. Thao Thi Duong signed a note in the amount of $\$ 200,000$ in favor of Country Home Loans, Inc., to obtain a loan to buy a house in Marrero, Louisiana. The note was indorsed "PAY TO THE ORDER OF [blank space] WITHOUT RECOURSE COUNTRY HOME LOANS, INC." Almost five years later, Duong defaulted on the payments. The Federal National Mortgage Association (Fannie Mae) had come into possession of the note. Fannie Mae wanted to foreclose on the house and sell it to recover the balance due. Duong argued that the words "to the order of [blank space]" in the indorsement made the note an incomplete order instrument and that Fannie Mae thus could not enforce it. What is Fannie Mae's best response to this argument?

Muriel Evans writes the following note on the back of an envelope: "I, Muriel Evans, promise to pay Karen Marvin or bearer $100$ dollars on demand." Is this a negotiable instrument? Discuss fully.

Angela Brock borrowed $544,000 and signed a note payable to Amerifund Mortgage Services, LLC, to buy a house in Silver Spring, Maryland. The note was indorsed in blank and transferred several times “without recourse” before Brock fell behind on the payments. On behalf of Deutsche Bank National Trust Co., BAC Home Loans Servicing LP initiated foreclosure. Brock filed an action in a Maryland state court to block it, arguing that BAC could not foreclose because Deutsche Bank, not BAC, owned the note. Can BAC enforce the note? Explain. [Deutsche Bank National Trust Co. v. Brock, 430 Md. 714, 63 A.3d 40 (2013)]

Bertram writes a check for $200 payable to “cash.” He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the bank’s parking lot, the check slips out of his pocket and falls to the pavement. Jerrod walks by moments later, picks up the check, and later that day delivers it to Amber, to whom he owes$200. Amber indorses the check “For deposit only, [signed] Amber Dowel” and deposits it into her checking account. In light of these circumstances, answer the following questions:

(d) Does Bertram have a right to recover the $200 from Amber? Explain.

Negotiation. Bertram writes a check for $\$ 200$ payable to "cash." He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the bank's parking lot, the check slips out of his pocket and falls to the pavement. Jerrod walks by moments later, picks up the check, and later that day delivers it to Amber, to whom he owes $\$ 200$. Amber indorses the check "For deposit only, [signed] Amber Dowel" and deposits it into her checking account. In light of these circumstances, answer the following questions:

(a) Is the check a bearer instrument or an order instrument?

(b) Did Jerrod's delivery of the check to Amber constitute a valid negotiation? Why or why not?

(c) What type of indorsement did Amber make?

(d) Does Bertram have a right to recover the $\$ 200$ from Amber? Explain. (See Negotiation.)

Bertram writes a check for $200 payable to “cash.” He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the bank’s parking lot, the check slips out of his pocket and falls to the pavement. Jerrod walks by moments later, picks up the check, and later that day delivers it to Amber, to whom he owes$200. Amber indorses the check “For deposit only, [signed] Amber Dowel” and deposits it into her checking account. In light of these circumstances, answer the following questions:

(c) What type of indorsement did Amber make?

Bertram writes a check for $200 payable to “cash.” He puts the check in his pocket and drives to the bank to cash the check. As he gets out of his car in the bank’s parking lot, the check slips out of his pocket and falls to the pavement. Jerrod walks by moments later, picks up the check, and later that day delivers it to Amber, to whom he owes$200. Amber indorses the check “For deposit only, [signed] Amber Dowel” and deposits it into her checking account. In light of these circumstances, answer the following questions:

(a) Is the check a bearer instrument or an order instrument?

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.

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.

Compare and Contrast What are the differences between civil law and criminal law?

What evidence did the plaintiff offer to establish standing to enforce the note? Was this sufficient proof? Explain.

What is the goal of corporate social responsibility?

To which court system do city courts belong?

The state court system

The local court system

The federal court system

The municipal court system

The Brown family owns several companies, including the J. H. Stevedoring Company and Penn Warehousing and Distribution, Inc. Many aspects of the companies' operations and management are intertwined. Dennis Bishop worked for J. H. and Penn for more than ten years before he became the financial controller at J. H. His responsibilities included approving invoices for payment and reconciling the corporate checkbook. In December of the following year, Bishop began stealing from Penn and J. H. by writing checks on the corporate accounts and using the funds for his own benefit (committing the crime of embezzlement). Several members of the Brown family signed the checks for Bishop without hesitation because he was a longtime, trusted employee. Over the next two years, Bishop embezzled more than $\$ 1.2$ million. He used $\$700,000$ to buy horses from the Fasig-Tipton Company and Fasig-Tipton Midlantic, Inc., with Penn and J. H. checks made payable to those firms. When Bishop's fraud was revealed, J. H. and Penn filed a suit in a federal district court against the Fasig-Tipton firms (the defendants) to recover the amounts of the checks made payable to them. Using the information presented in the chapter, answer the following questions.

In whose favor should the court rule, and why?