Question

Facts: Eve Anderson works as an Accounts Payable clerk for Future Tech, Inc., a software and development and marketing firm. Eve, who has worked for the firm for years, is authorized to sign company checks, on which Future Tech name and address are printed.

        In view of this factual background, answer the following questions by defining the rule of law, by applying to the facts of this problem and arrive to a conclusion or decision.

1. Future Tach pays its employees every two week. Eve gets her paycheck from her employer and endorses the back (Eve Anderson). On her lunch hour, she goes to cash her check at Future Tech’s bank, United First Bank, but loses it on a crowded street. Frank Smith finds the check.

2. To pay her current bills, Eve asks her employer Future Tech, to loan her the funds. Future Tech agrees if Eve will sign an instrument acknowledging the debt.

3. Future Tech loans Eve the amount that she wants, and she signs a negotiable to Future Tech due from the date signed. Six months later, Future Tech negotiates the note to Commercial Credit Corp. for 75 percent of the face amount in cash for the rest.

4. Is Commercial Credit a holder in due course of the note? To what extent?

Answer 1

Commercial Credit is a facility provided by the banks to the Corporations. It is an pre approved money issued by the Bank to the Company for the purpose of meeting day to day transactions of the Company. and they are paid by once the fund becomes available.

Firstly as the cheque is lost on the crowded Road the same has to be intimated to the Bank at the earliest and get the cheque cancelled.

Future Tech Inc. cannot negotiate for the Credit as the loan is given to the employee and not to the Corporation. Future Tech can recover the debt from Eve as per the instrument signed by her,

Anyhow the Corporation can claim from the Commercial Credit Corporation for Loan for providing the same to the Eve and return them back as soon as the amount is received from her.