Week 3 Discussion
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Negotiable Instruments
Before beginning work on this weeks discussion forum, please review the link Doing Discussion Questions Right, the expanded grading rubric for the forum and any specific instructions for this weeks topic.
The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.
By the due date assigned, submit your answers to Part 1 and Part 2 to this Discussion Area. Post the answers to both parts in one thread. Label your answers Part 1 and Part 2, but do not repeat the scenario text in your responses. Start reviewing and responding to your classmates as early in the week as possible. You should review and critique the work of other students as outlined in the expanded rubric by the end of the week.
Discussion Question Part 1
Select one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer.
Scenario 1 Liability on Negotiable Instruments
Porter Cable hired a bookkeeper, Gerald Smith, and gave him general authority to issue company checks drawn on First Bank so Smith could pay employees wages and other company bills. Smith decided to cheat his employers out of $9,500 by issuing a check payable to Timkin Bearings, one of the suppliers of bearings. Smith does not intend for Timkin to receive any of the money, nor is Timkin entitled to the payment. Smith endorses the check in Timkins name and deposits the check in an account that he opened in Sunny Bank in the name Timkin Bearing Co. Sunny Bank accepts the check and collects payment from the drawee bank, First Bank. First Bank charges Porter Cables account $9,500. Smith transfers $9,500 out of the Timkin account and closes it. Porter Cable discovers the fraud and demands that their account be re-credited.
