Paris negotiated the note by delivery to Germany, Germany to Italy, and Italy to Switzerland. Germany had known that Paris was bankrupt when Paris issued the note. Who would be liable to Switzerland?
Paris negotiated the note by delivery to Germany, Germany to Italy, and Italy to Switzerland. Germany had known that Paris was bankrupt when Paris issued the note. Who would be liable to Switzerland?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Paris makes a promissory note that states: "Paris, Luxembourg, promise to pay Php8,000.00 to Germany or bearer. Signed, Paris." Paris negotiated the note by delivery to Germany, Germany to Italy, and Italy to Switzerland. Germany had known that Paris was bankrupt when Paris issued the note. Who would be liable to Switzerland?
a. Paris and Luxembourg since they may be assumed to know of Paris’ bankruptcy
b. Germany, Paris and Luxembourg, being indorsers by delivery of a bearer note
c. Italy, being Switzerland's immediate negotiator of a bearer note
d. Germany, having known of Paris' bankruptcy
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