The drawer commercial credit corporation

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Reference no: EM131045510

The drawer, Commercial Credit Corporation (Corporation), issued two checks payable to Rauch Motor Company. Rauch indorsed the checks in blank, deposited them to its account in University National Bank, and received a corresponding amount of money. The Bank stamped ‘‘pay any bank'' on the checks and initiated collection. However, the checks were dishonored and returned to the Bank with the notation ‘‘payment stopped.'' Rauch, through subsequent deposits, repaid the bank. Later, to compromise a lawsuit, the Bank executed a special two-page indorsement of the two checks to Lamson. Lamson then sued the Corporation for the face value of the checks, plus interest. The Corporation contends that Lamson was not a holder of the checks because the indorsement was not in conformity with the UCC in that it was stapled to the checks. Is Lamson a holder? Why?

Reference no: EM131045510

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