Savings Account - Debtor Creditor Relations - Past Paper, Exams of Law

Download Savings Account - Debtor Creditor Relations - Past Paper and more Exams Law in PDF only on Docsity! Exam# ------ DEBTOR / CREDITOR Final Examination Professor Hurn Fall 2008 Instructions: This examination is for three hours. It is fully "open book," meaning you may refer to any written materials that you may have brought with you. However, you may not work with or consult any other person about your answers. Answer the multiple choice questions on the Scantron sheet provided and the short answers and essay in a Bluebook. Do not assume that familiar-looking questions are the same as those on old exams. Unless otherwise indicated, assume all transactions occur in the USA in states with the uniform codes and statutes printed in your statutory supplement, with typical versions of other sorts of statutes. If something appears missing or mistaken, plainly state a corrective assumption and proceed with your answer Remember to put your exam number on the answer forms and bluebooks. Multiple Choice (30 questions- up to 100 minutes suggested) 1. Oliver was old and sick. He got the flu, which led to pneumonia. His doctor told him it was pretty likely he would die. Oliver called in his relatives and told them he had taken care of most things in his will. Then he called for his jewelry case. He took out a key and handed it to Pat, saying "this opens that book case in the hall-everything in it is yours." He then handed the passbook for his old-fashioned savings account to Bobbie and said "this is going to be yours." Pat and Bobbie took the books and bankbook home with them than day. To everyone's surprise, Oliver recovered and wants his books and savings account back. a. He can recover neither. b. He can recover the books (only). c. He can recover the account (only). d. He can recover both. 2. Professor Stem absentmindedly left his 1815 edition of Blackstone's Commentaries on the Boston bus. Finder took it to Commonwealth Books and sold it to them for a considerable sum. Commonwealth Books sold it in the ordinary course to buyer. When Professor Stem was next in the shop, he bemoaned his loss to the manager, who recalled the earlier purchase and sale. On these facts, Professor Stem may 1 a. Recover the book from Buyer (only). b. Sue Finder and/or the Shop for conversion (only). c. Recover the book from Buyer or sue any combination of Finder, Shop, and Buyer for converSIOn. d. Professor Stem has no remedy on these facts. 3. Debtor owned an antique store. One afternoon the Sheriff served a writ of attachment covering all inventory at the store. This is effective under local law when recorded in the Article 9 registry. It was recorded that day. The next day, before calling his lawyer, Debtor contracted to sell an immense Victorian desk out of inventory to Buyer, who made a down-payment. They agreed Debtor would deliver the desk the following Saturday. In a dispute over the desk between the Buyer and the Attaching Creditor. a. Buyer will win and the Creditor gets nothing. b. Buyer will win if slhe tenders the amount not yet paid on the contract to the Creditor. c. Buyer will lose because slhe didn't take delivery. d. Buyer will lose because the perfected attachment preceded the contract. 4. In a state with a traditional Dead Man's Statute, testimony about which of the following transactions would be barred? a. An otherwise un-witnessed oral contract between the party/witness and the deceased. b. An otherwise un-witnessed oral inter-vivos gift to the party/witness by the deceased. c. An otherwise un-witnessed oral gift causa mortis to the party/witness by the deceased. d. Testimony would be barred about all of these transactions. 5. Landlord was in financial trouble. His best asset was an office building leased to several tenants, in writing, for various terms of years. Landlord sold the building and assigned and delegated all the leases to Assignee, as of June 30. Assignee also signed a written assumption of the duties (utilities, upkeep, clearing walks and parking area, etc.). Landlord said he would notify the tenants. He did not. The tenants paid the July rent to the old Landlord, who cashed their checks and promptly filed Chapter 7 Bankruptcy. Assignee discovered this after the rent checks had finally cleared. Assignee's remedy is a. Against the tenants for the unpaid rent. b. Against the bankruptcy trustee of the old Landlord under assignment law. c. Both a. and b. are correct remedies. d. Neither a. nor b. is correct. 6. The law governing the survival and descent of a right of publicity generally is: a. The law of the state of first public use. b. The law of the state of the first licensing. c. The law of the state of the celebrity's domicile at the time of first use. d. The law of the state ofthe celebrity's domicile at the time of death. 2 a. Has a good defense if he can prove his earlier payment. b. Has a good defense if he can show the mistake by clear and convincing evidence. c. Either a. or b. will be a good defense. d. Has no defense. 15. A Debtor took grain in which Bank had a security interest and, completely without awareness by the Bank, put it into the warehouse of an honest warehouser in return for a negotiable warehouse receipt. Debtor then endorsed and sold the receipt to an innocent grain processor. Before the processor/holder called for the grain, it was sold by mistake to a buyer in ordinary course of business. Of these parties, who has the best claim to the grain? a. Debtor. b. Bank. c. Processor/Holder. d. Buyer in Ordinary Course. 16. Same facts as above. Who has the second best claim to the grain? a. Debtor. b. Bank. c. Processor/Holder. d. Buyer in Ordinary Course. 17. Which of the following procedures does not require notice and opportunity to be heard by the debtor whose property is being pursued? a. Attachment. b. Execution. c. Lis Pendens. d. Neither Execution nor Lis Pendens requires notice and opportunity to be heard. 18. When assignments are governed by Article 9 and there are successive, irrevocable assignments for value of the same right, the owner is a. The first person to whom assignment is made. b. The first assignee to notify the obligor under the original contract. c. The first assignee to file in the Article 9 registry. d. The first assignee to file in the Article 9 registry without notice of prior conflicting rights. 19. Creditor #1 had a valid security agreement and took an accurate financing statement in proper form to the filing office. Creditor #1 paid the correct fee and the officer took the financing statement. Receipts and stamped copies prove this. However, due to a series of emergencies and power failures that day, the officers never indexed Creditor #1 's financing statement. Several months later Creditor #2 entered a valid security agreement on the same collateral and filed a proper financing statement which was in fact properly indexed. In a dispute between the two Creditors, which will have priority? 5 a. Creditor #1 because its has satisfied the requirements for an effective filing. b. Creditor #1 because Creditor #2 was negligent in trusting the debtor. c. Creditor #2 because the attempted first filing was ineffective. d. Creditor #2 because Creditor#1 was negligent, having had sufficient time to confirm its filing and failing to do so. 20. Your client sold a major home entertainment system to Debtor, on credit, securing a signed security agreement. Debtor became unemployed, and defaulted. When asked for a surrender of the collateral, Debtor reluctantly said he had sold it to a neighbor. You are asked to file a replevin suit against the neighbor to recover the collateral. a. You may do so because PMSI's of consumer goods are automatically perfected. b. You may do so ONLY if you can prove the sale was a fraudulent transfer. c. Both the perfected PMSI and the fraudulent transfer theories can succeed. d. Neither the PMSI nor the fraudulent transfer theories can reach this property. 21. You represented one spouse in a recently completed divorce. The court awarded your client the couple's new Lincoln Navigator. It is presently titled in the other spouse's name, clear of any liens. Which of the following will protect your client's rights against a possible wrongful sale of the automobile to an innocent party? a. Record the court order in the Article 9 registry and take possession of the car. b. Send the court order to the Moter Vehicle Registry and get a new Certificate of Title in Client's name. c. Take possession of the car. d. Both b. and c. are necessary. 22. Assume the same facts as in the previous question except that the property awarded was a Copyright. Which of the following will protect your client's rights against a possible wrongful assignment of the Copyright to an innocent party? a. Record the court order in the Article 9 registry of the relevant state. b. Record the court order in the Copyright office. c. Record the court order wherever Federal Tax liens are filed in the relevant state. d. Both b. and c. are necessary. 23. A Federal Tax lien is normally filed in a Registry of Deeds. Such a lien, when properly filed, affects the title to the Taxpayer's: a. Only taxpayer's Real Property. b. All taxpayer's Real Property and Personal Property. c. All taxpayer's Real Property and Personal Property except Copyrights. d. All taxpayer's Real Property and Personal Property except those types for which there is a separate federal title registry (for example, Copyrights, Patents, Ships, Aircraft). 6 24. Which of the following facts will defeat the claims ofa person otherwise qualified as the holder in due course of a negotiable instrument under uee Article 3? a. The original obligor was a minor. b. A necessary endorser was a minor. c. BOTH facts will defeat a holder in due course. d. NEITHER fact will defeat a holder in due course. 25. In the absence of a special statute or government regulation, a common carrier's liability for loss of goods may: a. Be unconditionally limited by the parties in the contract of carriage. b. Be limited by the parties in the contract of carriage if, and only if, the shipper is given the option of purchasing higher liability limits at the time of contracting. c. Be limited by the parties in the contract of carriage only to the extent of excluding liability for consequential damages. d. Not be limited in any way. (26 - 29) A local business has gone bankrupt. During its operations it generated a substantial stream of chattel paper from its customers (of the type which included promissory notes). A local bank held a security interest in the chattel paper, perfected by filing in the Article 9 registry. The customers have been paying, but the business failed for other reasons. In a desperate move just prior to collapsing, the business wrongfully sold the same chattel paper to a factoring company endorsing the notes and transferring possession of the actual files. To further complicate matters, one of the general partners of the factoring company picked this time to tum crook and endorsed the notes over to a holder in due course, absconding with the proceeds just before the original bll,siness went bankrupt. 26. Of the following people, who has the best claim to ownership of the notes? a. The bank. b. The factoring company. c. The holder in due course. d. The Trustee in Bankruptcy. 27. Who has the second best claim? a. The bank. b. The factoring company. c. The holder in due course. d. The Trustee in Bankruptcy. 7