Harrison obtained from Bristow his $11,500 check drawn on the Union National Ban

Question

Harrison obtained from Bristow his $11,500 check drawn on the Union National Bank in payment for bogus uranium stock. His immediately negotiated it by a blank indorsement to Dunlop in return for $1,000 in cash and her chek for $10,400. Dunlop qualified as a holder in due course. She deposited the check in her checking account in the Oceanside Bank. Upon discovering that the stock was boguws, Bristow notfied Union National to stop payment on his check, which it did. The check was returned to Oceanside Bank, which in turn debited Dulop's account and returned the check to her.

A. Can Dunlop recover the $11,500 from Union National Bank? Explain

B. Can Dunlop recover the $11,500 from Bristow? Explain

Explanation / Answer

Answer A

Dunlop can't recover $11500 from Union National Bank as the bank is not his debtor.There is no past business dealing between dunlop and Union National Bank in connection with this amount.He can recover the amount from Harrison who is his debtor and who endorsed the bristow check in his favour.

Answer B

Dunlop can't recover $11500 from Bristow as Bristow is not his debtor.There is no past business dealing between dunlop and Bristow in connection with this amount.He can recover the amount from Harrison who is his debtor and who endorsed the bristow check in his favour.

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