Question

Susie Smith signed a note agreeing to pay "Annie Greene, Mary Hodge" $1,000. The payment was for painting her house. An issue with the note was that it spelled Annie's last name "Greene," whereas Annie spells it simply "Green." Annie and Mary had a disagreement regarding how to split up the funds for painting the house. Annie proceeded to sign the note on the back "Annie Green" and presented it to Bill Brown to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took it to the bank for payment. Mary is unhappy because she did not obtain any of the funds and stated that Annie could not legally endorse the instrument because it misspelled her name and because Mary did not sign it.

Required:
What is true regarding Mary's claim that the endorsement by Annie was illegal because the note misspelled Annie's name?

Answer 1

Incomplete question. The options read;

• Mary is correct, but only because Annie signed the note "Green" instead of "Greene" as indicated on the note.
• Mary is correct.
• Mary is incorrect.
• Mary is correct, but only because two payees are listed.
• Mary is incorrect unless she can prove that Susie intentionally and purposefully spelled the name wrong to prevent negotiation.

Answer:

• Mary is incorrect.

Step-by-step explanation:

Indeed, since this just a case of name misspelling, the law in no clear terms states that such an endorsement would be counted as been illegal.

Remember, Mary acknowledges that the amount paid by Susie Smith was meant for both of them (Annie Green and Mary Hodge), hence there should be no question of illegality since funds were meant to be shared. In other words, this minor error can be overlooked.