Business Law and the Legal Environment 7th Edition by Jeffrey Beatty,Susan Samuelson

Exercise 6

Kendall raised hogs. The Grain Company would provide him with hogs and grain and, in return, he would sign a promissory note in an amount equal to the value of these items. Once the pigs were grown, Kendall would sell them and repay the loan. One time, an officer of the Grain Company asked Kendall to sign not only his own but also his wife's name to the promissory note. Kendall did so, but put his initials, KH, after her name to indicate that he was the one who had signed the note. Grain Company sold this note to Bank. It turned out that the Grain Company did not actually own the hogs it had given Kendall and the true owner took them away. Bank sued Kendall for payment on the promissory note. Are Kendall and/or his wife liable on the note?