[Topsya]

Dent Corporation received a loan from Jardine Finance Company. As part of the signed written agreement, Jardine required that one of the members of the board of directors of Dent Corporation act as a surety for the entire loan. The loan agreement also called for some of Dent’s real estate to be used as collateral for 50% of the loan. Which of the following is not correct?

A. When the loan is due, Jardine must first seek collection of the loan from Dent before resorting to the surety or the collateral.

B. Jardine may choose to proceed against the surety for the entire loan when the loan is due.

C. When the loan is due, if the collateral does not contribute to half of the loan, Jardine may seek to recover the entire remainder from the surety without resorting to the corporation.

D. If Jardine recovers more than half of the loan amount upon resale of the collateral, Jardine must pay the excess to Dent.

Im pretty sure the correct (incorrect in this case) would be the answer A.

Wiley tells me it’s B

Please help!

Thanks!!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

in other words, Jardine can pursue payment from the surety ANY TIME not only after surety defaults.

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[newnc]

I re-read the question, had more coffee and now I agree with you. 🙂 Wiley is wrong. B is correct only if the question was “which one is correct?”. A is an example of a guarantor; therefore, A should be the answer to this question.

BEC-75(expired), 74 5/24/14
REG-64

[newnc]

I re-read the question, had more coffee and now I agree with you. 🙂 Wiley is wrong. B is correct only if the question was “which one is correct?”. A is an example of a guarantor; therefore, A should be the answer to this question.

BEC-75(expired), 74 5/24/14
REG-64

[Topsya]

THANK YOU! 🙂

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

THANK YOU! 🙂

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[CPA soon]

Be careful of the “May” and “Must”, I noticed they always try to use that trick 😉

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

Be careful of the “May” and “Must”, I noticed they always try to use that trick 😉

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[Only Reg Left]

I answered it correctly without looking at the answer first. She can't be forced pay the ENTIRE loan amount when 50% of RE is held as collateral, even though she signed as a surety for the entire loan.

And “A” is correct. She won't be able to sell the collateral without first asking the original debtor to pay for the loan. This is the whole point of collateral.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Only Reg Left]

I answered it correctly without looking at the answer first. She can't be forced pay the ENTIRE loan amount when 50% of RE is held as collateral, even though she signed as a surety for the entire loan.

And “A” is correct. She won't be able to sell the collateral without first asking the original debtor to pay for the loan. This is the whole point of collateral.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Author]

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