A company has no legal liability to repay shareholders the amount ...

[asmith134]

A company has no legal liability to repay shareholders the amount they have invested.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Discharge. Richard and Coralea Triplett signed two promissory notesone for 14,000 and one for 3,500in favor of FirsTier Bank, N.A. The Tripletts sent the bank a check for 7,200 as payment on the notes. A clerk divided the 7,200 payment to pay the second note in full and to reduce the amount owed on the first note. The clerk then incorrectly stamped the first note PAID, signed it, and mailed it to the Tripletts. Later, a different clerk stamped the second note PAID, signed it, and returned it to the Tripletts. When FirsTier sued the Tripletts in a Nebraska state court for the rest of the money due on the first note, the Tripletts asserted that the bank had stamped PAID on the note and returned it. The bank contended that it had not intended to release both notes. In deciding whether the first note was discharged, what factors should the court take into consideration?

[Ddddd]

Answer to Question 1

TRUE

Answer to Question 2

Discharge
Intent was the principal factor in the eyes of the court. The Supreme Court of Nebraska held that the unintentional cancellation and surrender of a promissory note through a clerical error does not discharge the maker of the note. The court pointed out that under UCC 3-604(a), a person entitled to enforce an instrument    may discharge the obligation of a party to pay the instrument (i) by an intentional voluntary act, such as surrender of the instrument to the party    or cancellation of the instrument. The court added that all jurisdictions that have considered the issue have concluded that clerical error does not have the legal effect of    discharging an instrument. This is simply an application of the general rule that cancellation or surrender of an instrument has no effect when done by a person without authority from the holder of the instrument.