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BUSINESS LAW II - Merchants v. MechanicsProblem:For Super ...
Sent to Business Law Experts June 23 12:47 PM

BUSINESS LAW II - Merchants v. MechanicsProblem:BUSINESS LAW II -

Merchants v. Mechanics Problem:

For Super Bowl XXX, the Tip-Top Bar and Grill pulled out all the stops. Beer was just a dollar, sandwiches were free and there was an opportunity to win $10,000 with a $100 bet on a ten by ten prize grid. Ben pulled a card from the board - NFL 3, AFL 0. He realized he only had $95 in his pocket, so he wrote a check for $100, payable to Tip-Top, and drawn on Mechanics National Bank. The bartender took Ben's check, counted out five twenties and tossed them in the jackpot.

The beer was cold and the sandwiches were tasty, but the game was a defensive battle. With three minutes left on the clock, the NFL team, leading 20 to 10, tried a field goal from the twelve-yard line. Ben's excitement grew, because he would take home ten grand if the kick were good. But the field goal was blocked, and 20 to 10 was the final score.


Ben was furious, so angry that he called his bank the next morning and stopped payment on the check. The same day, Tip-Top deposited its weekend receipts, including Ben's check, in Merchants Bank and Trust. When Merchants presented the check to Mechanics, Mechanics refused to pay. Merchants sued Mechanics, claiming to be a holder in due course.


Will Merchants prevail? If so, why? If not, why not? If any statutes are relevant to this problem, explain how they apply. Remember to discuss and properly cite two cases to support your analysis.
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Edited by Customer (name blocked for privacy) on June 23 2008 at 12:51 PM

Customer (name blocked for privacy)
Reply
June 23 1:04 PM (14 minutes and 44 seconds later)
         

that is the full case and the question is the last line, maybe you looked at it when I was editing it. I do not need the 2 cites for case support..

but if you answer this and use the internet for any backup please note them for me so I can also see where and how. I am trying to work on this also.

Let me know if you still can not see the whole case/questions. I will post it again. see below:

Team Problem Two

 

Merchants v. Mechanics

 

For Super Bowl XXX, the Tip-Top Bar and Grill pulled out all the stops. Beer was just a dollar, sandwiches were free and there was an opportunity to win $10,000 with a $100 bet on a ten by ten prize grid. Ben pulled a card from the board - NFL 3, AFL 0. He realized he only had $95 in his pocket, so he wrote a check for $100, payable to Tip-Top, and drawn on Mechanics National Bank. The bartender took Ben's check, counted out five twenties and tossed them in the jackpot.

 

The beer was cold and the sandwiches were tasty, but the game was a defensive battle. With three minutes left on the clock, the NFL team, leading 20 to 10, tried a field goal from the twelve-yard line. Ben's excitement grew, because he would take home ten grand if the kick were good. But the field goal was blocked, and 20 to 10 was the final score.

 

Ben was furious, so angry that he called his bank the next morning and stopped payment on the check. The same day, Tip-Top deposited its weekend receipts, including Ben's check, in Merchants Bank and Trust. When Merchants presented the check to Mechanics, Mechanics refused to pay. Merchants sued Mechanics, claiming to be a holder in due course.

 

Will Merchants prevail? If so, why? If not, why not? If any statutes are relevant to this problem, explain how they apply. Remember to discuss and properly cite two cases to support your analysis.



Edited by Customer (name blocked for privacy) on June 23 2008 at 1:12 PM
Answer
June 23 1:15 PM (11 minutes and 6 seconds later)
         
ACCEPTEDCheck Mark

Dear Customer (name blocked for privacy),

No, Merchants will not prevail because it is not a holder in due course it is a collecting bank. UCC 3-302 specifies that a "holder in due course" is a party that takes an instrument:

  • for value
  • in good faith
  • without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment
  • without notice that the instrument contains an unauthorized signature or has been altered
  • without notice of any claim or defense

The bank did not give value for the instrument, so it is not a holder in due course.

See http://www.law.cornell.edu/ucc/3/article3.htm#s3-302




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