Makel Textiles, Inc. v. Dolly Originals, Inc.

4. U.C.C. Rep.Serv. 95 (1967)

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Nature of the Case

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Facts

P loaned money to Dolly. Dolly executed a promissory note in favor of P. Additional parties, Ds, also signed the note as endorsers. P loaned more money to Dolly and two individual endorsers signed on the back of the second note. Two more notes were executed by Dolly and endorsed on the back by two people. With the last two notes, five checks made payable to P were also executed. One of them was returned unpaid, and the other four were never deposited. In additional, Dolly gave P two more checks one of which was actually paid. P sued Ds to collect the monies owed. D offered no defense. One of the individual defendants was dismissed. Judgment was entered against Dolly. Goldberg and Kushner (Ds), two of the individual endorsers motioned to dismiss the suit against them. Ds claim that since the promissory notes were never presented for payment, their obligations under those notes were discharged. Ds also claim that the subsequent checks given by Dolly to P were in payment and Ds were relieved of liability on their endorsements.