Question 1

Mr.Chickilini is a surety for Wayne on a debt owed to Melvin.If Wayne fails to pay,what defenses might Mr.Chickilini have to avoid payment of the debt?

Accepted Answer

The answer of Mr.Chickilini is a surety for Wayne on...

Question 2

First Bank loans Lila $1,500 so that she may purchase a computer for her office secretary.Lila signs a financing statement,which First Bank duly files within twenty days.After Lila purchases the computer,she takes out a loan at Valley Bank,gives the computer as collateral,and signs a financing statement,which Valley Bank then duly files.Her secretary never uses the computer,so Lila puts an ad in the paper and sells the computer to Angie.If Lila defaults on the loans,whose interest in the computer has priority? Explain,using correct terminology.

Accepted Answer

The answer of First Bank loans Lila $1,500 so that...

Question 3

Thomas borrowed $100,000 from First Bank,which asked that he both put up collateral and provide a surety.Consequently,Thomas provided the bank with a security interest in his antique car collection and asked Victor to act as a surety.Victor agreed to do so and signed a surety agreement with the bank.Thomas made several payments on the loan and then asked First Bank for permission to sell three of his cars.First Bank agreed,but it never notified Victor of the sale of the collateral.Thomas then defaults on the loan.First Bank now wants Victor to pay the remainder of the loan.Must Victor pay? Explain.

Accepted Answer

The answer of Thomas borrowed $100,000 from First Bank,which asked...

Question 4

Karl loaned Linda $100,000.Madeline agreed to act as surety for $100,000.Nora agreed to act as surety for $75,000,and Orville agreed to act as surety for $25,000.Linda later defaulted on the loan,and Karl is now demanding payment from Nora and Orville.What amount do Nora and Orville have to pay? If Nora and Orville pay,does Madeline have any obligation? Explain.

Accepted Answer

The answer of Karl loaned Linda $100,000.Madeline agreed to act...

Question 5

Elmer agreed to act as the conditional guarantor of collection on a debt of $50,000 that Fred owed to Gloria.Fred paid Elmer a premium to serve as surety.If Fred defaults on the debt,what are Gloria's rights against Elmer?

Accepted Answer

The answer of Elmer agreed to act as the conditional...

Question 6

Diane,who is seventeen years old,purchased an auto from Elvira on credit.Florence agreed to act as surety and signed a written surety agreement.At the time of purchase,Diane specifically asked Elvira about the condition of the car's motor and was told that it had just been replaced with a new one and was in fine condition.This was blatantly untrue,because Elvira knew it was in terrible shape and would only last a short time.The auto has now stopped running and Diane refuses to make any more payments.Elvira is now proceeding against Diane and Florence.What defenses,if any are available to (a)Diane and (b)Florence?

Accepted Answer

The answer of Diane,who is seventeen years old,purchased an auto...

Quiz 37: Secured Transactions and Suretyship

Mr.Chickilini is a surety for Wayne on a debt owed to Melvin.If Wayne fails to pay,what defenses might Mr.Chickilini have to avoid payment of the debt?

Elmer agreed to act as the conditional guarantor of collection on a debt of $50,000 that Fred owed to Gloria.Fred paid Elmer a premium to serve as surety.If Fred defaults on the debt,what are Gloria's rights against Elmer?