Dante Guevara Business Law 2301 Student ID: 15xxxxx Assignment # 4 Case 22.3 I. Statement of Facts A. William H.

Bailey, M.D, executed a note payable to California Dreamstreet for the amount of $329,800. B. Four years later, Dreamstreet negotiated the note to Cooperatieve Centrale Raiffeisen-Boerenleenbank, a foreing bank. C. A default occurred, and Cooperatieve filed suit against Bailey to recover on the note. II. Decision (Is the note executed by Bailey a negotiable instrument?) A. Yes III. Rule of Law A. To be a negotiable instrument under the requirements of UCC 3-104, a writing must contain either an unconditional order to pay or an unconditional promise to pay. B. The note issued by Bailey was in writing, was signed by Bailey and stated a fix amount. The requirements are met, the note is negotiable. Case 23.3 I. Statement of Facts A. Wilson was the office manager of Palmer and Ray Dental Supply Company of Abilene, Inc. Each workday, James Frank Ray, the president of the Dental Supply, would take the checks received from customers to Wilsons desk. B. Wilson was authorized to (1) indorse the checks with a rubber stamp reading the name and full address of the company and (2) deposit the indorsed checks into the companys checking account at the First National Bank of Abilene. C. After working for many years at Dental Supply, Wilson began to embezzle money from the company by indorsing the checks made payable to Dental Supply with

the rubber stamp and drawing cash instead of making deposits. The bank cashed these checks without requiring any further indorsement. II. A. No III. Rule of Law A. Order paper that is endorsed in blank becomes bearer paper and can be presented for payment.
B. Blank endorsement constitutes an authorized endorsement. When the Bank

Decision (Is the bank liable?)

delivered cash to Mrs. Wilson instead of depositing the proceeds from the checks to appellant's account, the Bank was not guilty of conversion. Case 24.10 I. Statement of Facts A. Marvin L. Rose was a real estate developer and worked in a project in a tract of land in Illinois. To finance this project, Rose and his wife obtained two loans from Belleville National Bank for a total of $879,000. The Roses executed promissory notes to the bank for each loan. B. The Roses claimed that the loan officers made them believe that the two loans were five-year-term notes with fixed interest rates. Instead, each note stipulated that it was payable on demand or if no demand be made, due and payable five years after date. The Roses claimed were not aware of this language because they did not read the documents. C. A year and a half after the notes were executed, the bank informed the Roses that they must renew the loans, or the notes would be called. The Roses claimed that their signature were obtained by fraud in the inception because they thought they were signing term notes and not demand notes. II. Decision (Did the Roses act ethically in alleging that the demand note should not be enforced against them because they had not read the note?) A. No III. Rule of Law A. The rule in Illinois is that a party who signs a written agreement and has had the opportunity to review it, may not subsequently claim that he was fraudulently induced to enter into the agreement based on misrepresentations as to its terms.

B. Fraud in the inception exists where an instrument is misread to the party signing

it, or where there is a surreptitious substitution of one paper for another, or where, by some other trick or device, a party is made to sign an instrument that he did not intend to execute. The Roses were not deceived into signing the note payable. Case 25.2 I. Statement of Facts A. Louise Kalbe maintained a checking account at the Pulaski State Bank in Wisconsin. Kalbe made out a check for $7620, payable in cash. B. Kalbe lost the check and never reported to the bank the missing payment or put a stop on it. One month later, some unknown person presented the check to a Florida bank for payment. The Florida bank paid the check and sent it to Pulaski bank for collection. Pulaski bank paid the check and created a $6,542.12 overdraft in Kalbes account. C. Pulaski Bank requested Kalbe pay this amount. Kalbe refused to pay it and Pulaski bank sued Kalbe to collect the overdraft. II. Decision (Who wins?) A. Pulaski State Bank III. Rule of Law A. If a bank chooses to pay a check even if the account doesnt have enough funds, it can later charge the drawers account for the amount of the overdraft. B. Due to the implied promise that the drawer will reimburse the bank for paying checks the drawer orders the bank to pay; if the drawer does not fulfill this commitment, the bank can sue him or her to recover payment for the overdrafts and overdraft fees. Case 27.4 I. Statement of Facts A. Murphy Oldsmobile, Inc., was a car dealership selling new and used cars. GMAC loaned funds to Murphy to finance the purchase of new cars as inventory. The loan was secured by a duly perfected security agreement in all existing and after acquired inventory and the proceeds therefrom.

B. Over the course of a week, Murphy received checks and drafts from the sale of the secured inventory in the amount of $97,888, which it deposited in a business account at Norstar Bank. C. During that week, Murphy defaulted on some loans it had received from Norstar and the bank exercised its right of setoff and seized the funds on deposit on Murphys checking account. GMAC sued to enforce its security claim against the funds. II. Decision (Who wins?) A. GMAC III. Rule of Law A. In a secured agreement, unless stated otherwise, if a debtor (Murphy Oldsmobile, Inc.) sells, exchanges, or disposes of collateral subject to such an agreement, the secured party (GMAC) automatically has the right to receive the sales proceeds of the sale, exchange or disposition. B. If two or more secured parties claim an interest in the same collateral but only one has perfected his or her security interest, the perfected security interest has priority. Case 28.3 I. Statement of Facts A. Peter and Geraldine Tabala, husband and wife, purchased a house in Clarkstown, NY. They also purchased a Carvel ice cream business for $70,000 with a loan obtained from Peoples National Bank and additionally Carvel Corporation extended a trade credit to the couple. B. Two years after getting the bank loan, the Tabalas transferred their residence to their three daughters but kept living in the property paying maintenance, and real estate taxes. On the date of the transfer, debtors owed obligations in excess of $100,000. C. Five months later, the Tabalas filed for chapter 7 bankruptcy. The bankruptcy trustee moved to set aside the Tabalas transfer of their home to their daughters as a fraudulent transfer. II. Decision (Who wins?) A. The bankruptcy trustee

III. Rule of Law A. The transfer was made within two years of the bankruptcy petition and was made by the Tabalas with the actual intent to hinder, delay, or defraud a creditor. B. Fraudulent transfer occurred when the Tabalas were insolvent on the date they transferred their property to their daughters. Case 43.4 I. Statement of Facts A. George Carlin, a comedian, recorded a 12 minutes monologue called Filthy Words. The monologue was about the words you couldnt say on public airwaves and then proceeded to list those words, repeating them over and over again in a variety of colloquialisms. B. A New York radio station, owned by Pacifica, broadcasted Carlins Filthy Words. During the broadcasting, a father while driving listened to the radio with his young son and filed a complaint with the FCC, a federal agency that regulates broadcasting. C. The Federal Communications Act forbids the use of any obscene, indecent, or profane language by means of radio communications. Therefore the FCC issued an order granting the complaint, and it informed Pacifica that the order would be considered in future licensing decisions involving Pacifica. II. Decision (Is the FCC regulation legal?) A. Yes. III. Rule of Law
A. The FCC was created to regulate the operations of television and radio

stations specifically and is an administrative agency that was created by congress to administer specific laws. B. The FCC concluded that certain words depicted sexual and excretory activities in a patently offensive manner and that they were broadcasted at a time when children were undoubtedly in the audience and that the prerecorded language, with these offensive words. The Commission stated that the language as broadcasted was indecent and prohibited by 18 U. S. C. Case 54.1 I. Statement of Facts

A. Prior to 1918, the Petrograd Metal Works, a Russian Corporation, deposited a large sum of money with August Belmont, a private banker doing business in New York as August Belmont & Co. B. In 1918, the Soviet government nationalized the corporation and appropriated all its property and assets wherever situated, including the deposit account with Belmont. C. In 1933, the Soviet government and the United States entered into an agreement to settle claims and counterclaims between them. As part of the settlement, was agreed that the Soviets would not take steps to enforce claims against American nationals, including Belmont, and assigned all such claims to the United States. The United States brought an action against the executors of Belmonts estate to recover the money originally deposited with Belmont by Petrograd Metal Works. II. Decision (Who owns the money?) A. The United States Government. III. Rule of Law
A. A general principal of international law is that a country has absolute authority

over what transpires within its own territory. The agreements between the United States and the Soviet Union empowered the United States to seek assets on the Soviet Union's behalf. B. The bank cant refused to handle the assests to the United States government by citing protection of a New York law because federal law rules over state law due to the supremacy clause.