Page 171 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes Self Assessment

Fill in the blanks:
11. Efficient ............................. of Loans and Advances portfolio has assumed greater significance
as it is the largest asset of the bank having direct impact on its profitability.

12. .................................. is a contract to execute the promise, or discharge the liability of a third
person in case of his default.
13. .......................... accounts are kept in the ordinary current account head of the bank branches.

14. The exact period for which a particular ................................ is sanctioned depends on the
circumstances of the case.
15. Projects financed must be closely monitored during ................................... stage to avoid
time and cost overruns.

Notes The more frequently affirm must refinance debt, the greater is the risk of its not
being able to obtain the necessary financing.

Task Draw specimens of different types of cheque that you have learnt from this lesson.

Case Study Enforceability of lost or destroyed Negotiable
Instruments/Commercial Paper

Posted on November 23, 2008 by pklawyers
n interesting case that shows the how lost or destroyed Negotiable Instruments/
Commercial Paper can remain enforceable is Atlantic National Trust, LLC v.
AMcNamee, 2007.
The High court in Alabama held that a destroyed promissory note is still enforceable both
the maker of the note, or an assignee could enforce it so long as its existence could be
proven.
In this case a bank (Wachovia) made a loan in 2003 to the debtor, McNamee, in the amount
of $150,000. For this he signed a promissory note. At some point, Wachovia inadvertently
misplaced, lost or destroyed the original note. The note matured in 2005 and after the loan
matured Wachovia assigned its rights in and to the note to the plaintiff Atlantic National
Trust., which then sued for recovery. Atlantic demanded McNamee repay the remaining
principal balance of $138,620 plus interest. The plaintiff moved for summary judgment
based on an affidavit affirming that the instrument had been lost by the assignor.

Now Atlantic could not produce the original note, but had a copy, so the debtor defended
on the grounds that the plaintiff assignee had no right to enforce the note since it was
never in possession of the original document, and that the assignee of a lost note has no
standing to sue the maker. Thus McNamee contended that because the original note was

Contd....

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