Question

Sid's LLC has purchased fish from Fred's Fisheries. Sid wrote a check for $22,000 to Fred's. A thief broke into Fred's office and stole the cash on hand as well as the unindorsed check from Sid's. The thief took the check to the Corner Check Cashing Company (CCCC) and received $22,000 less the cashing fee of $2000. Fred, notified Sid, who then notified First Commerce Bank, the drawee of the check, of the theft. CCCC presented the check for payment, and First Commerce refuses to pay. CCCC says it is a holder in due course. Using the IRAC format determine whether CCCC is entitled to the money.

Answer 1

In any case CCCC is not entittled to get the money for a check which is unindorsed by the drawee. Endorsement is required for passing of a check. It is the ignorence happened from the CCCC without passing a check bearing a signature of the drawee. CCCC is entitled to get the money only from the theef if they have power in their hands or by filing a police complaint. Police also realy unable to get back the money from the theef because it is a real ignorence happened from the passing official. He or anyone has no right to pass a check not bearing a signature ie: unindorsed check. CCCC can recover that money from their staff who has made a payment for an unindorsed check.