On March 1, 2021, PETE executed a Negotiable Promissory Note to JACK in the sum of $12,000.00 and payable on May 1, 2021. The NOTE was given to JACK in exchange for a painting of a Landscape which JACK told PETE was an "Original" painted by John Golden, a famous artist. When PETE had the painting appraised for insurance purposes, he found out that the "painting" was a "Fake" and was worthless. Meanwhile on April 15, 2021, JACK negotiated (Indorsed) the NOTE over to SMITH in exchange for a motorcycle that SMITH owned. On taking the NOTE from JACK, SMITH told JACK that he would deliver the motorcycle to JACK by May 15, 2021. JACK agreed and gave SMITH the NOTE. On April 21, 2021, SMITH indorsed the NOTE over to his friend JONES as a gift. Next to his indorsement, SMITH wrote "Without Recourse" On May 3, 2021, JONES presented the Promissory Note to PETE for payment. PETE refused to pay the NOTE saying that the painting JACK had sold him was a "Fake" and was worthless. On May 5, 2020, JONES gave notice of PETE's refusal to pay the NOTE to both SMITH and JACK Answer - Part 1 JONES now sues PETE for his money. What defenses could PETE use to avoid having to pay JONES on the NOTE? What would be JONES responses to PETE's defenses? Who would prevail, JONES or PETE? Discuss the outcome in detail. Set forth the LAW for each Defense that you are going to discuss. Answer - Part 2 JONES also sues SMITH and JACK for payment of the NOTE. Discuss any defenses that SMITH and JACK could use to avoid having to pay JONES the NOTE. Who should prevail in each of these suits and why? Explain in detail Set forth the LAW for each Defense that you are going to discuss