On March 1, 2021, JANE gave SALLY a check in the sum of $1,500.00 in exchange for SALLY's television. SALLY immediately indorsed the check with a blank indorsement. However, SALLY subsequently lost the check and asked JANE to give her another check. JANE refused. KATIE found SALLY's lost check, but rather than return it to SALLY, KATIE indorsed and negotiated the check to SUSIE as a gift on March 3, 2021. Next to KATIE's indorsement, KATIE added the words "Without Recourse". On March 5, 2021, SUSIE presented the check to JANE's bank for payment. On March 6, 2021, the bank notified SUSIE that they would not honor the check and refused to pay it saying that JANE had told them not to pay because SALLY had lost the check and SUSIE had no rights to it. SUSIE told KATIE and SALLY about JANE's refusal to pay on March 7, 2021.

Answer - Part 1

SUSIE now sues JANE for $1,500.00. What defenses could JANE use to avoid having to pay SUSIE on the Check? What would be SUSIE's responses to JANE's defenses? Who would prevail, SUSIE or JANE? Set forth the LAW as it applies to each issue in discussing your answer.

Answer - Part 2

SUSIE also sues KATIE and SALLY for payment of the Check. Discuss any defenses that KATIE and SALLY could use to avoid having to pay SUSIE the Check. Who should prevail in each of these suits and why? Set forth the LAW which applies to each issue that you discuss.

Answer - Part 3

SALLY also sues KATIE and JANE claiming she should get her $1,500.00 from one or both of them because she lost the check and was never reimbursed for it. What defenses could JANE or KATIE use to avoid having to pay SALLY on the Check. Who would prevail, SALLY, JANE or KATIE? Why? Set forth the LAW which applies to each issue you are going to discuss.