What is the debt obligation here?

[gts013]

What is the name of your state? TX

In the Spring of 2006 "A" made a personal loan of $45,000 to "B". At the time of the loan "B" gave to "A" a book of 25 personal checks that were signed, made payable to "A" in the agreed amount and pre-dated to pay back the total loan in 25 monthly payments. After several months passed and none of the checks were cashed "A" stated to "B" that he was not concerned about having the debt repaid. There is no way to verify this statement. In the Fall of 2006, "A" became terminally ill. At that time "B" suggested to "A" that he endorse all the checks and make them payable to his brother "C". "A" said he would do this. In the Spring of 2007, "A" passed away. "C" is the executor of the estate. "A" never endorsed any of the checks or made them payable to "C" and "C" is unable to cash them because "B"s Bank will not recognize his signature.

Has "B", by signing and giving to "A" the checks for the full payment of the debt, satisfied his debt obligation. Does "A" not endorsing the checks imply a forgivness of the debt? If "A" is seen to have mismanaged or neglected of his side of the debt re-payment, what obligation if any, does "B" have to "C"?

[Chien]

Boy, that’s a toughie.

I’m torn between:
1) We don’t do homework here, and
2) Everybody looks to hide behind TX debt protection statutes anyway, so who cares? and
3) Why not just wait until probate court sticks it to “B”? and
4) Did someone really use terms like “imply forgiveness” and “mismanage or neglect . . . debt re-payment”?

(I seem to remember a similar fact situation on one of my old tests. If we had only had the Internet or even telephones in those days . . . .)

Tell you what. I’ll ignore the “no homework” rule, but you have to sing for your supper.
Hypothetical: Chien agrees to answer the questions of gts013 in consideration of a promise that gts013 will make the practice of law his/her life’s work and will confine that practice exclusively to animal care and elder care law. gts013 makes the promise, Chien gives the answers and gts013 becomes a lawyer, with a practice dedicated to animal care and elder care exclusively. Unbeknownst to either Chien or gts013, concurrent with the promise, gts013 is named executor/executrix in the will of “A”, the 20-year old best friend of gts013, because of “A’s” confidence in gts013 as a lawyer-to-be. At the age of 29 and now with a family, “A” trips on a negligently abandoned cattle prod and falls down a well on the ranch of one G.W. Bush and is killed. gts013 is called to action to handle the estate.
As executor/executrix, gts013 retains a personal injury law firm to sue Bush and employees on theories of negligence and respondeat superior. Suit is filed by the firm on behalf of the family and estate of “A”; gts013 is otherwise not involved. Chien is not told of this by gts013 and, because of the named plaintiffs and attorneys for plaintiffs, could not have reasonably discovered it in another manner. Chien learns from the idle comment of a mutual acquaintance some six years later.
Has gts013, by acting in a legal capacity on behalf of the deceased “A”, breached the agreement with Chien?
Does Chien have an enforceable cause of action?
Is your answer the same, if neither Chien nor gts013 knew of “A’s” action at the time of the offer and promise?
Has a 4-year TX Statute of Limitations on enforcement of oral agreements any bearing?
Regardless of your analysis and conclusions, assume that Chien is found to have an enforceable agreement, what are his remedies?
Explain your answers fully. A score of 75 or above, arbitrarily determined by me, gets you your answers on PM (and you don’t really have to stick to elder care and animal care, but they’re growing practice areas).

Or maybe you just want to go with the “we-don’t-do-homework rule”?

[gts013]

>>I’m torn between:
>>1) We don’t do homework here....

In 62 yrs I've never cracked a law book. This tale was related to me yesterday by "B" in the mistaken belief that as a reasonably intelligent individual I could wend my way thru the legal issues and tell him he was off the hook. I am smart enough however to know what I don't know. But I do see that it is an interesting puzzle.

>>2) Everybody looks to hide behind TX debt protection statutes anyway, so who cares?...

I profess ignorance of these or any other debt statutes. Now leash law, that's another story.

>>3) Why not just wait until probate court sticks it to “B”? ...

So..... "B" is still obligated?

>>4) Did someone really use terms like “imply forgiveness” and “mismanage or neglect . . . debt re-payment”?

No... These are my phrases used in this retelling to put a favorable spin on the story.


>>Tell you what. I’ll ignore the “no homework” rule, but you have to sing for your supper.

Ok, I'll play.

>> Unbeknownst to either Chien or gts013, concurrent with the promise, gts013 is named >>executor/executrix in the will of “A”, At the age of 29 ...... gts013 is called to action to >>handle the estate.... gts013 retains a personal injury law firm to sue..Suit is filed...for >>the estate of “A”; gts013 is otherwise not involved.

>>Has gts013, by acting in a legal capacity on behalf of the deceased “A”, breached the >>agreement with Chien?

In my layman's brain, gts013's acting in a legal capacity as executor can be seen as coincident to his being a lawyer. His decision to retain a law firm does not, in and of itself, constitute "the practice of law". That being said, it seems to me that it would have been incumbent upon gts013 to give Chien the courtesy of a heads up at the onset of his known involvement as executor to determine from Chien's perspective if a violation to the agreement would occur.

>>Does Chien have an enforceable cause of action?

At the time of the agreement could Chien have had a resonable expectation that such unintended complications would never arise during gts013's life?

>>Is your answer the same, if neither Chien nor gts013 knew of “A’s” action at the time of >>the offer and promise?

Yes.

>>Has a 4-year TX Statute of Limitations on enforcement of oral agreements any bearing?

Not at all familiar with this TX Statute of Limitations.

>>Regardless of your analysis and conclusions, assume that Chien is found to have an >>enforceable agreement, what are his remedies?

How has Chien been harmed? Can it be shown that the answer had value? Was the answer to the question correct? Can it be shown that gts013 benefited from receiving the answer? Did Chien tell gts013 anything that he did not already know?


To add to the tale, the signed and pre-dated checks began in June '07 and run until July '08.
The interesting part of this to me is when is the debt considered paid. If "B" give's "A" a check but "A" chooses not to cash it, has "B" fullfilled his obligations as far as the repayment is concerned in that he made a good faith effort.

Absent a "paid in full" receipt or cancelled checks, does the debt obligation persist, in this instance with the estate, until the money leaves "B" checking account?

Is "A"'s failure/decision not to endorse the checks or, being aware of his terminal condition, insure a means by which "C", as executor, could receive payment, simple a mismanagement of his estate and a loss for which "B" is not accountable. This is complicated by the fact that although all the checks were given to "A" on June'07, there remain pre-dated checks running until July'08 that cannot yet be cashed.

I look forward to my receiving my grade.

[Ladynred]

Was there any written agreement on this loan ? Is there anything besides the post-dated checks that show that an obligation even exists ?

[gts013]

>>Was there any written agreement on this loan ? Is there anything besides the post-dated checks that show that an obligation even exists ?

"B" has told me that this was a 'hand shake' agreement between old friends. Little hard to believe considering the amount, but that is his story.

Today I put more questions to "B" and pulled out from him the admission that at one point "C" had approached him concerning his inability to cash the checks and "B", on two occasions, made out a single payment check to "C" in "C"'s name. Seems to me that indicates an acknowledgement and acceptance on "B"'s part of the ongoing nature of the obligation and undercuts any hope he may have had for wiggling out of making good on his commitment.

As he put's it: "I made a promise to repay him but now he's dead, and I did not make a promise to pay his brother. Why should I pay money if I don't have too?"

I told him that in my humble opinion there are 2 legal interpretations to his situation. Firstly, that he's shot himself in the foot and secondly he now doesn't have a leg to stand on.

Thanks for your interest.

Best wishes for the New Year!

gts013

[Chien]

I told him that in my humble opinion there are 2 legal interpretations to his situation. Firstly, that he's shot himself in the foot and secondly he now doesn't have a leg to stand on.

Good for you. I come out in the same place. Let’s skip test-grading (too many questions answered with questions); while not always sustainable, the analysis was sound and further supported by your later additions. Truthfully, I would have responded anyway but with long UCC references the necessity for which you’ve obviated (but which I will supply, if you still want them). It would have ended up where you came out with your friend, and I think he would be mistaken to test your “layman’s advice” in court.

Nice to meet you. Best wishes for the New Year to you too.

(New Year’s Resolution: No more post-celebratory game-playing on FA without a clear head.)

(LNR – tracing funds and evidence of the post-dated checks could get you to the 51% burden of proof.
Do you really believe, “What they are saying is pure collection tactics, applying pressure to make you cough up cash they just know you are hiding from them - that's their attitude, IMO they ALL think like that.”? (from another post)
I have good reason to believe that I’m still not cynical enough and may not ever be.
Should DC and I and a couple of others stop posting? I can’t speak for them, however I’ll take your advice; posting can be time-consuming and occasionally irritating. While I think that a caveat to an OP is ok, I don’t think that it helps a dialogue to paint all collectors with the same tar-brush, and I think that the mind-set pre-conditions debtors for an unproductive adversarial confrontation. Game theory teaches us that is not the best way to begin or win.)