Sanders borrowed 5000 from Waskow giving Waskow a promissory

Sanders borrowed $5,000 from Waskow, giving Waskow a promissory note that read, “One year from date, I promise to pay to the order of James Waskow $5,000, without interest (signed) Mary Sanders.” Six months later, Waskow died. The unendorsed note was in the possession of Waskow’s landlord, who claimed that Waskow had given him the note in payment of back rent. Was the landlord a holder of the note? Why or why not? See also Smathers v. Smathers, 239 S.E.2d 637 (NC).

Please answer the question using the following guideline:

Use Business law with UCC application (14th edition)

Use the following guidelines:

Issues: what were the issues in the case!

Laws: what laws apply to the case!

Conclusion: what will be the outcome of the case!

Solution

No, the landlord is not the holder of the note in this case because as per law holder is that person who is in possession of a document of title that has been issued to him or has been indorsed to him or his order.

The law clearly states that a transferee without endorsement of an order instrument will not be regarded as a holder. The onus will be on the landlord to provide the details of the transaction through which the promissory note was acquired by him and if a legible transaction is not present then the terms of the obligation will not run to the landlord.

The law that I have referred to is the Uniform Commercial Code (UCC).