Fact Pattern 25-A1
Quiky Delivery Company contracts to provide services to Regal Bakeries, Inc. At Quiky's request, Regal makes checks for the services payable to "Quiky Delivery Co. and Secure Credit Corp." One check, however, is pay?able to "Quiky Delivery Co. Secure Credit Corp." .
-Refer to Fact Pattern 25-A1. Suppose the check payable to "Quiky Delivery Co. Secure Credit Corp" is indorsed and negotiated only by Secure. Quiky files a suit to recover the amount. According to the decision in Case 25.1, Hyatt Corp. v. Palm Beach National Bank, the court will most likely rule that
A) neither Regal nor its bank are liable.
B) only Regal is liable.
C) Regal and its bank are alternatively liable.
D) Regal and its bank are jointly liable.

Question

Fact Pattern 25-A1 
Quiky Delivery Company contracts to provide services to Regal Bakeries, Inc. At Quiky's request, Regal makes checks for the services payable to "Quiky Delivery Co. and Secure Credit Corp." One check, however, is pay?able to "Quiky Delivery Co. Secure Credit Corp." .
-Refer to Fact Pattern 25-A1. Suppose the check payable to "Quiky Delivery Co. Secure Credit Corp" is indorsed and negotiated only by Secure. Quiky files a suit to recover the amount. According to the decision in Case 25.1, Hyatt Corp. v. Palm Beach National Bank, the court will most likely rule that
A) neither Regal nor its bank are liable.
B) only Regal is liable.
C) Regal and its bank are alternatively liable.
D) Regal and its bank are jointly liable.

Quizplus · Accepted Answer

In Hyatt Corp. v. Palm Beach National Bank, the court held that when a check is made payable to two or more payees joined by "and," both payees must endorse in order to negotiate the check. However, when the word "or" is used instead of "and," the check may be negotiated by either payee. In this case, the check was payable to "Quiky Delivery Co. Secure Credit Corp," which implies that either payee could negotiate the check. Since only Secure Credit Corp. negotiated the check, Regal and its bank are alternatively liable for the amount.