Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

تمرين 4

Spotlight on Casino Markers
FACTS Amine Nehme, a California resident, applied for credit at the Venetian Resort Hotel Casino in Las Vegas, Nevada. Nehme was granted $500,000 in credit. He soon accrued more than $1.2 million in gambling debts to the Venetian, which he paid. About a year later, Nehme deposited $1,000 with the Venetian and signed a gambling marker for $500,000. Generally, a gambling marker is an instrument that is dated, bears the gambler's name-and the name and account number of the gambler's bank-and states the instruction "Pay to the Order of" the casino. In this case, though, the line following "Pay to the Order of" was apparently left blank, which made the marker a bearer instrument. Nehme quickly lost $500,000 gambling and left the casino. The Venetian presented the marker for payment to Bank of America, Nehme's bank, which returned it for insufficient funds. The casino's owner, Las Vegas Sands, LLC, applied Nehme's deposit against the marker and filed a suit against him to recover the remainder-$499,000-plus interest, claiming that he had failed to pay a negotiable instrument. A federal district court issued a summary judgment in the Venetian's favor. Nehme appealed.
ISSUE Was the gambling marker under which Nehme borrowed funds from a casino a negotiable instrument ?
DECISION Yes. The U.S. Court of Appeals for the Ninth Circuit agreed with the lower court that the marker was a negotiable instrument. To determine whether Nehme could establish a defense to liability, the appellate court reversed the lower court's judgment and remanded the case for a trial.
REASON In Nevada, a negotiable instrument is defined as an unconditional order to pay a fixed amount of money, payable on demand or at a definite time, and stating no "undertaking" in addition to the payment of money [Nevada Revised Statutes Section 104.3104, Nevada's version of UCC 3-104]. A check is defined as a draft "payable on demand and drawn on a bank." The court reasoned that the gambling marker fit these definitions. It specified a fixed amount of money, $500,000. It did not state a time for payment and thus was payable on demand. It was unconditional and stated no "undertaking" by Nehme in addition to the payment of a fixed sum. Thus, the Venetian could enforce the marker against Nehme unless he could establish a defense to liability.
WHAT IF THE FACTS WERE DIFFERENT? Suppose that the marker had stated "Payable to the Order of the Venetian." Could the casino have transferred it for collection? If so, how?