SIMS and PARTNER opened a business and their checking account included both name
ID: 2695435 • Letter: S
Question
SIMS and PARTNER opened a business and their checking account included both names. BIG COMPANY, a client of the business issued a check in the amount of $150,000 for future services and made it payable to SIMS, PARTNER, with the names stacked one on top of the other. SIMS endorsed the check and cashed it at their bank. Scoundrel that she was, SIMS absconded with the money, probably to a warm, Caribbean country. What recourse, if any does PARTNER have against the bank. Make sure you review the material for multiple payees and the corresponding code sections before you answer. Include references to code sections in your answer.Explanation / Answer
Aside from a cause of action you might have against your partner, if he was complicit, you can file suit against the bank and the receiver will be responsible for responding and administering the lawsuit on behalf of the failed bank. During the course of discovery, you can request to have the bank sanctioned by the court if they do not cooperate.
However even getting a judgment you may have trouble collecting. You may have better luck suing and collecting against the partner.
First of All, I am a bankruptcy lawyer in Elyria. The law in Ohio is that if the sheriff sale does not generate enough to cover the mortgage there can be a deficiency judgment. Ohio law permits the collection of such a deficiency for only two years. In practice I have only ever seen one case in which a bank tried to garnish for a deficiency in a foreclosure. that bank held a second mortgage which received no funds as part of the Sheriff sale, and that was in Cleveland. Be careful of short sales. You will get a 1099 in the amount of the debt forgiven. You will have to include that amount in your tax return as income. Forgiven debt has always been an income event for tax purposes. Depending on your circumstance bankruptcy may be an option for you
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