Question: The Johnson Company, a corporation organized under

> On January 1, 2021, Davis and Hershey owned Blackacre as tenants in common. On July 1, 2021, Davis made a written contract to sell Blackacre to Grigg for $250,000. Pursuant to this contract, Grigg paid Davis $250,000 on August 1, 2021, and Davis executed

> Robert and Stanley held legal title of record to adjacent tracts of land, each consisting of a number of five acres. Stanley fenced his five acres in 1996, placing his east fence fifteen feet onto Robert’s property. Thereafter, he was in possession of th

> In 2009, Roy Martin and his wife, Alice, their son, Hiram, and Hiram’s wife, Myrna, acquired title to a 240-acre farm. The deed ran to Roy Martin and Alice Martin, the father and mother, as joint tenants with the right of survivorship, and to Hiram Marti

> Ames leased an apartment to Boor at $200 a month, pay- able the last day of each month. The term of the written lease was from January 1, 2020, through April 30, 2021. On March 15, 2020, Boor moved out, telling Ames that he disliked all the other tenants

> Decide and explain your decision for each of the following problems: a. A chimney sweep found a jewel and took it to a goldsmith, whose apprentice removed the stone and refused to return it. The chimney sweep sues the goldsmith. b. One of several boys wa

> On June 1, Cain delivered his 2013 automobile to Barr, the operator of a repair shop, for necessary repairs. Barr put the car in his lot on Main Street. The lot, which is fenced on all sides except along Main Street, holds one hundred cars and is unguard

> On July 15, Adler purchased in Chicago a Buick sedan, intending to drive it that day to St. Louis, Missouri. He telephoned a friend, Maruchek, who was in the insurance business, and told him that he wanted liability insurance on the automobile, limited i

> Lee Calan Imports advertised a used Volvo station wagon for sale in the Chicago Sun-Times. As part of the information for the advertisement, Lee Calan Imports instructed the newspaper to print the price of the car as $1,795. However, due to a mistake mad

> John Swan rented a safe deposit box at the Tenth Citizens Bank of Emanon, State ofX. On December 17, 2018, Swan went to the bank with stock certificates to place in the safe deposit box. After he was admitted to the vault and had placed the stock certifi

> Girard & Company, Certified Public Accountants, audited the financial statements included in the annual report submitted by PMG Enterprises, Inc., to the Secu- rities and Exchange Commission (SEC). The audit failed to detect numerous false and misleading

> Venable Corporation has 750,000 shares of common stock outstanding, which are owned by 2,640 shareholders. The assets of Venable Corporation are valued at more than $10 million. In March, Underhill began purchasing shares of Venable’s common stock in the

> Gooddecade manufactures and sells automobile parts throughout the eastern United States. Among its fulltime employees are 220 fourteen-and fifteen-year-olds. These teenagers are employed throughout the company and are paid an hourly wage rate of $5 per h

> Discuss when a limited partner does or does not have the following rights or powers: (a) to assign his interest in the limited partnership, (b) to receive repayment of loans made to the partnership on a pro rata basis with general creditors, (c) to ma

> Magnum Company produces 77 percent of the coal utilized in the United States. Coal provides 25 percent of all of the energy used in the United States. In a suit brought by the United States against Magnum for violation of the antitrust laws, what result?

> Z sells cameras to A, B, C, and D for $110 per camera. Y, one of Z’s competitors, sells a comparable camera to A for $101.50. Z, in response to this competitive pressure from Y, lowers its price to A to $101.50. B, C, and D insist that Z lower its price

> Discuss the validity and effect of each of the following: a. A, B, and C, manufacturers of stereos, orally agree that due to the disastrous, cutthroat competition in the market, they will establish a reasonable price to charge their purchasers. b. D, E,

> Jones, having filed locally an affidavit required under the assumed name statute, has been operating and advertising his exclusive toy store for twenty years in Centerville, Illinois. His advertising has consisted of large signs on his premises reading “

> B, a chemist, was employed by A, a manufacturer, to work on a secret process for A’s product under an exclusive three-year contract. A employed C, a salesperson, on a week-to-week basis. B and C resigned their employment with A and accepted employment in

> On May 5, Stewart Richardson (Seller) and Jasdip Properties SC, LLC (Buyer) entered into an agreement for the purchase of certain property in Georgetown, South Carolina, for $537,000. Buyer paid an initial earnest money deposit of $10,000, half of which

> A conceived a secret process for the continuous freeze- drying of foodstuffs and related products and constructed a small pilot plant that practiced the process. A, however, lacked the financing necessary to develop the commercial potential of the proces

> Karen has filed a voluntary petition for a Chapter 7 proceeding. The total value of her estate is $35,000. Ben, who is owed $18,000, has a security interest in property valued at $12,000. Lauren has an unsecured claim of $9,000, which is entitled to a pr

> John Bunker has assets of $130,000 and liabilities of $185,000 owed to nine creditors. Nonetheless, his cash flow is positive, and he is making payment on all of his obligations as they become due. I. M. Flintheart, who is owed $22,000 by Bunker, files a

> Alex is a wage earner with a regular income. He has unsecured debts of $42,000 and secured debts owing to Betty, Connie, David, and Eunice totaling $120,000. Eunice’s debt is secured only by a mortgage on Alex’s house. Alex files a petition under Chapter

> Ross Corporation is a debtor in a reorganization proceeding under Chapter 11 of the Bankruptcy Code. By fair and proper valuation, its assets are worth $100,000. The indebtedness of the corporation is $105,000, and it has outstanding $100 par value prefe

> Rosinoff and his wife, who were business partners, entered bankruptcy. A creditor, Baldwin, objected to their discharge in bankruptcy on the grounds that a. the partners had obtained credit from Baldwin on the basis of a false financial statement; b. the

> A debtor went through bankruptcy under Chapter 7 and received his discharge. Explain which of the following debts were completely discharged and which will remain as future debts against him. a. A claim of $9,000 for wages earned within five months immed

> Jessica sold goods to Stacy for $2,500 and retained a security interest in them. Two months later, Stacy filed a voluntary petition in bankruptcy under Chapter 7. At this time, Stacy still owed Jessica $2,000 for the purchase price of the goods, the valu

> Bradley goes into bankruptcy under Chapter 7 owing $25,000 as wages to his four employees. There is enough in his estate to pay all costs of administration and enough to pay his employees, but nothing will be left for general creditors. Do the employees

> a. Benson goes into bankruptcy. His estate is not sufficient to pay all taxes owed. Explain whether Benson’s taxes are discharged by the proceedings. b. Benson obtained property from Anderson on credit by representing that he was solvent when in fact he

> Hannaford is a national grocery chain whose electronic payment processing system was breached by hackers as early as December 7, 2007. The hackers stole up to 4.2 million credit and debit card numbers, expiration dates, and security codes, but did not st

> Jones bought a used car from the A-Herts Car Rental Sys- tem, which regularly sold its used equipment at the end of its fiscal year. First National Bank of Roxboro had previ- ously obtained a perfected security interest in the car based upon its financin

> Aaron bought a television set for personal use from Penny. Aaron properly signed a security agreement and paid Penny $125 down, as their agreement required. Penny did not file, and subsequently Aaron sold the tele- vision for $800 to Clark, his neighbor,

> Anita bought a television set from Bertrum for her personal use. Bertrum, who was out of security agreement forms, showed Anita a form he had executed with Nathan, another consumer. Anita and Bertrum orally agreed to the terms of the form. Anita subseque

> On May 1, Lincoln lends Donaldson $200,000 and receives from Donaldson his agreement to pay this amount in two years and takes a security interest in the machinery and equipment in Donaldson’s factory. A proper financing statement is filed with respect t

> On September 5, Wanda, a widow who occasionally teaches piano and organ in her home, purchased an electric organ from Murphy’s music store for $4,800, trading in her old organ for $1,200 and promising in writing to pay the balance at $120 per month and g

> Finley Motor Company sells an automobile to Sara and retains a security interest in it. The automobile is insured, and Finley is named beneficiary. Three days after the automobile is totally destroyed in an accident, Sara files a petition in bankruptcy.

> Joanna takes a security interest in the equipment in Jason Store and files a financing statement claiming “equipment and all after acquired equipment.” Berkeley later sells Jason Store a cash register, taking a security interest in the register, and (a)

> On January 2, Burt asked Logan to loan him money “against my diamond ring.” Logan agreed to do so. To guard against intervening liens, Logan received permission to file a financing statement, and Burt and Logan signed a security agreement giving Logan an

> Diggitt Construction Company was the low bidder on a well-digging job for the Village of Drytown. On April 15, Diggitt signed a contract with Drytown for the job at a price of $40,000. At the same time, pursuant to the notice of bidding, Diggitt prevaile

> On June 1, Smith contracted with Martin doing business as Martin Publishing Company to distribute Martin’s newspapers and to account for the proceeds. As part of the contract, Smith agreed to furnish Martin a bond in the amount of $10,000 guaranteeing th

> Kasch and his brother owned M.W. Kasch Co. Kasch hired Skebba as a sales representative and over the years promoted him first to account manager; then to customer service manager, field sales manager, vice president of sales, senior vice president of sal

> Patrick Dillon applied for a $10,000 loan from Carlton Savings & Loan. Carlton required him to obtain a surety. Patrick approached Sinclair Surety Co., which insisted that Patrick provide it with a financial statement. Patrick did so, but the statement w

> Pamela Darden owed Clark $5,000 on an unsecured loan. On May 1, Pamela approached Clark for an additional loan of $3,000. Clark agreed to make the loan only if Pamela could obtain a surety. On May 5, Simpson agreed to be a surety on the $3,000 loan, whic

> Campbell loaned Perry Dixon $7,000, which was secured by a possessory security interest in stock owned by Perry. The stock had a market value of $4,000. In addition, Campbell insisted that Perry obtain a surety. For a premium, Sutton Surety Co. agreed to

> Stafford Surety Co. agreed to act as the conditional guarantor of collection on a debt owed by Preston Decker to Cole. Stafford was paid a premium by Preston to serve as surety. Preston defaults on the obligation. Explain what Cole’s rights are against S

> Paula Daniels purchased an automobile from Carey on credit. At the time of the sale, Scott agreed to be a surety for Paula, who is sixteen years old. The automobile’s odometer stated fifty-two thousand miles, but Carey had turned it back from seventy-two

> Peter Diamond owed Carter $500,000 secured by a first mortgage on Diamond’s plant and land. Stephens was a surety on this obligation in the amount of $250,000. After Diamond defaulted on the debt, Carter demanded and received payment of $250,000 from Ste

> Allen, Barker, and Cooper are cosureties on a $750,000 loan by Durham National Bank to Kingston Manufacturing Co., Inc. The maximum liability of the sureties is as follows: Allen, $750,000; Barker, $300,000; and Cooper, $150,000. If Kingston defaults on

> Victor sells to Bonnie a refrigerator for $600 payable in monthly installments of $30 for twenty months. Bonnie signs a security agreement granting Victor a security interest in the refrigerator. The refrigerator is installed in the kitchen of Bonnie’s a

> Mitchell, Nelson, Olsen, and Parker, experts in manufacturing baubles, each owned fifteen out of one hundred authorized shares of Baubles, Inc., a corporation in a State with an incorporation statute that does not permit cumulative voting. On July 7, 201

> Old Island Fumigation, Inc., fumigated buildings A and B of a condominium complex using Vikane gas. Buildings A and B, together with building C, form a U shape; buildings B and C have between them an atrium and were thought to be separated by an impenetr

> Almega Corporation, organized under the laws of State S, has outstanding twenty thousand shares of $100 par value nonvoting preferred stock calling for noncumulative dividends of $5 per year; ten thousand shares of voting preferred stock with $50 par val

> Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview Corporation, which had no earnings or profits in 2019. In 2020, the corporation had large profits and a surplus from which it might properly have declared dividends. The

> Adam, Stanley, and Rosalind formed a partnership in State X to distribute beer and wine. Their agreement provided that the partnership would continue until December 31, 2024. Which of the following events would cause the ABC partnership to dissolve? If s

> Jason, who has extremely poor vision, went to an auto- mated teller machine (ATM) to withdraw $200 on February 1. Joshua saw that Jason was having great difficulty reading the computer screen and offered to help. Joshua obtained Jason’s personal identifi

> Jones drew a check for $1,000 on The First Bank and mailed it to the payee, Thrift, Inc. Caldwell stole the check from Thrift, Inc.; chemically erased the name of the payee; and inserted the name of Henderson as payee. Caldwell also increased the amount

> As payment in advance for services to be performed, Acton signed and delivered the following instrument: December 1, 2021 LAST NATIONAL BANK MONEYVILLE, STATE X Pay to the order of Olaf Owen $10,500.00 Ten Thousand Five Hundred Dollars for services to be

> On April 1, Moore gave Pipkin a check properly drawn by Moore on Zebra Bank for $5,000 in payment of a painting to be framed and delivered the next day. Pipkin immediately indorsed the check and gave it to Yeager Bank as payment in full of his indebtedne

> Jones, a food wholesaler whose company has an account with City Bank in New York City, is traveling in California on business. He finds a particularly attractive offer and decides to buy a carload of oranges for delivery in New York. He gives Saltin, the

> Assume that Dinah draws a check on Oxford Bank, payable to the order of Pam; that Pam indorses it to Amy; that Amy deposits it to her account in Houston Bank; that Houston Bank presents it to Oxford Bank, the drawee; and that Oxford Bank dishonors it bec

> Tom Jones owed Bank of Cleveland $10,000 on a note due November 17, with 1 percent interest due the bank for each day delinquent in payment. Jones issued a $10,000 check to Bank of Cleveland and deposited it in the night vault the evening of November 17.

> The MacGilvray Shiras was a ship owned by the Kinsman Transit Company. During the winter months, when Lake Erie was frozen, the ship and others moored at docks on the Buffalo River. As oftentimes happened, one night an ice jam disintegrated upstream, sen

> Howard Harrison, a longtime customer of Western Bank, operates a small department store, Harrison’s Store. Because his store has few experienced employees, Harrison frequently travels throughout the United States on buying trips, although he also runs th

> Advanced Alloys, Inc., issued a check in the amount of $2,500 to Sergeant Steel Corporation. The check was presented for payment fourteen months later to the Chase Manhattan Bank, which made payment on the check and charged Advanced Alloy’s account. Can

> On July 21, Boehmer, a customer of Birmingham Trust, secured a loan from that bank for the principal sum of $5,500 to purchase a boat allegedly being built for him by A.C. Manufacturing Company, Inc. After Boehmer signed a promissory note, Birmingham Tru

> On November 9, Jane Jones writes a check for $5,000 payable to Ralph Rodgers in payment for goods to be received later in the month. Before the close of business on November 9, Jane notifies the bank by telephone to stop payment on the check. On December

> Jack stole a check made out to the order of Bertha. Jack forged Bertha’s name on the back and made the instrument payable to himself. Jack then transferred the check to Sun for cash by signing his name on the back of the check in Sun’s presence. Sun was

> On July 1, Anderson sold D’Aveni, a jeweler, a necklace containing imitation gems, which Anderson fraudulently represented to be diamonds. In payment for the necklace, D’Aveni executed and delivered to Anderson her promissory note for $25,000 dated July

> In payment of the purchase price of a used motorboat that had been fraudulently misrepresented, Young signed and delivered to Armstrong his negotiable note in the amount of $2,000 due October 1, with Selby as an accommodation co-maker. Young intended to

> Alpha orally appointed Omega as his agent to find and purchase for him a 1930 Dodge automobile in good condition, and Omega located such a car. Its owner, Roe, agreed to sell and deliver the car on January 10, 2021, for $9,000. To evidence the purchase p

> Tate and Fitch were longtime friends. Tate was a man of considerable means; Fitch had encountered financial difficulties. To bolster his failing business, Fitch desired to borrow $6,000 from Farmers Bank of Erehwon. To accomplish this, he persuaded Tate

> On June 15, 2016, Justin, for consideration, executed a negotiable promissory note for $10,000, payable to Renee on or before June 15, 2021. Justin subsequently suffered financial reverses. In January 2021, Renee on two occasions told Justin that she kne

> Pro Golf Manufacturing, Inc., manufactures and repairs golf equipment as well as gives golf lessons. On September 27, the Tribune Review newspaper published an article stating that several historic buildings, including the building housing Pro Golf ’s bu

> A negotiable promissory note executed and delivered by B to C passed in due course and was indorsed in blank by C, D, E, and F. G, the present holder, strikes out D’s indorsement. What is the liability of D on her indorsement?

> While employed as a night security guard at the place of business of A. B. Cate Trucking Company, Fred Fain observed that the office safe had been left unlocked. It contained fifty payroll checks, which were ready for distribution to employees two days l

> $900.00 Smalltown, Illinois Maker, November 15, 2021 The undersigned promises to pay to the order of John Doe Nine Hundred Dollars with interest from date of note. Payment to be made in five monthly installments of One Hundred Eighty Dollars, plus accrue

> On December 2, 2021, Miles executed and delivered to Proctor a negotiable promissory note for $1,000, payable to Proctor or order, due March 2, 2022, with interest at 14 percent from maturity, in partial payment of a printing press. On January 3, 2022, P

> Adams, by fraudulent representations, induced Barton to purchase one hundred shares of the capital stock of the Evermore Oil Company. The shares were worthless. Barton executed and delivered to Adams a negotiable promissory note for $5,000, dated May 5,

> McLaughlin borrowed $10,000 from Adler, who, apprehensive about McLaughlin’s ability to pay, demanded security. McLaughlin indorsed and delivered to Adler a negotiable promissory note executed by Topping for $12,000 payable to McLaughlin’s order in twelv

> On January 2, 2021, seventeen-year-old Martin paid $2,000 for a used motorboat to use in his fishing business, after Dealer’s fraudulent misrepresentation of the condition of the boat. Martin signed an installment contract for $1,500, and gave Dealer the

> Adams, who reads with difficulty, arranged to borrow $2,000 from Bell. Bell prepared a note, which Adams read laboriously. As Adams was about to sign it, Bell diverted Adams’s attention and substituted the following paper, which was identical to the note

> Roy Rand executed and delivered the following note to Sue Sims: “Chicago, Illinois, June 1, 2021; I promise to pay to Sue Sims or bearer, on or before July 1, 2021, the sum of $7,000. This note is given in consideration of Sims’s transferring to the unde

> The following instrument was given to Matthew Andrea: Chapel Hill, N.C. April 15, 2021 Ninety days after date pay to the order of Matthew Andrea, seven hundred and fifty dollars ($750). Value received and charge the trade account of Olympia Sales Corp.,

> On July 31, Amanda Vaughn and Jason Vaughn accompanied their mother, Emma Simpson Vaughn, to a Walmart store. Amanda’s friend, Kimberly Dickerson, was also with them. Once they entered the store, Mrs. Vaughn and Jason went into separate areas of the stor

> Explain whether the following instrument is negotiable. March 1, 2021 One month from date, I, James Jimson, hereby promise to pay Edmund Edwards: Six thousand, Seven hundred Fifty ($6,750.00) dollars, plus 4 3/4% interest. Payment for cutting machines to

> Sam Sharpe executed and delivered to Don Dole the following instrument: Knoxville, Tennessee May 29, 2021 Thirty days after date I promise to pay Don Dole or order, Five Thousand Dollars. The holder of this instrument shall have the election to require t

> For the balance due on the purchase of a tractor, Henry Brown executed and delivered to Jane Jones his promissory note containing the following language: January 1, 2021, I promise to pay to the order of Jane Jones the sum of $7,000 to be paid only out o

> Henry Hughes, who operates a department store, executed the following instrument: $2,600 Chicago, March 5, 2021 On July 1, 2021, I promise to pay Daniel Dalziel, or order, the sum of Twenty-Six Hundred Dollars for the privilege of one framed advertising

> On March 10, Tolliver Tolles, also known as Thomas Towle, delivered to Alonzo Craig and Abigail Craig the following instrument, written by him in pencil: For value received, I, Thomas Towle, promise to pay to the order of Alonzo Craig or Abigail Craig On

> State whether the following provisions in a note impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with the word Negotiable or Nonnegotiable and explain why. a. A note signed by Henry

> State whether the following provisions impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with either the word “Negotiable” or “Nonnegotiable” and explain why. a. A note for $2,000 paya

> On December 15, Judy wrote a letter to David stating that she would sell to David all of the mine-run coal that David might wish to buy during the next calendar year for use at David’s factory, delivered at the factory at a price of $30 per ton. David im

> Mae contracted to sell one thousand bushels of wheat to Lloyd at $5 per bushel. Just before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept the wheat. Mae sold the wheat for $4.60 per bushel, the market price, and lat

> Brilles offered to sell his used automobile to Nevarro for $12,600 cash. Nevarro agreed to buy the car, gave Brilles a check for $12,600, and drove away in the car. The next day Nevarro sold the car for $13,000 to Hough, a bona fide purchaser. The $12,60

> The Brineys (defendants) owned a large farm on which was located an abandoned farmhouse. For a ten-year period the house had been the subject of several tres passings and housebreakings. In an attempt to stop the intrusions, Briney boarded up the windows

> Garvey owned four speedboats named Porpoise, Priscilla, Providence, and Prudence. On April 2, Garvey made written offers to sell the four boats in the order named for $14,200 each to Caldwell, Meens, Smith, and Braxton, respectively, allowing ten days fo

> Gardner owned a quantity of corn, which was contained in a corncrib located on Gardner’s farm. On March 12, Gardner wrote a letter to Bassett stating that he would sell to Bassett all of the corn in this crib, which he estimated at between nine hundred a

> Seller had manufactured forty thousand pounds of plastic resin pellets specially for the buyer, who agreed to accept them at the rate of one thousand pounds per day upon his issuance of shipping instructions. Despite numerous requests by the seller, the

> Johnson, who owned a hardware store, was indebted to Hutchinson, one of her suppliers. Johnson sold her business to Lockhart, one of Johnson’s previous competitors, who combined the inventory from Johnson’s store with his own and moved them to a new, lar

> Yount told Lewis he wished to buy Lewis’s automobile. He drove the car for about ten minutes, returned to Lewis, stated he wanted to take the automobile to show it to his wife, and then left with the automobile and never returned. Yount sold the automobi