Frank Supply Co. held the following instrument:
______________________________________________________________________________
| |
| Clark Novelties, Inc. April 12, Year 5 |
| 29 State Street |
| Spokane, Washington |
| |
| Pay to the order of Frank Supply Co. on April 30, Year 5, ten |
| thousand and 00/100 dollars ($10,000) |
| |
| Smith Industries, Inc. |
| J.C. Kahn |
| J.C. Kahn, President |
| |
| ACCEPTED: Clark Novelties, Inc. |
| By: |
| Mitchell Clark |
| Mitchell Clark, President |
| |
| Date: April 20, Year 5 |
| |
_______________________________________________________________________________
As a result of an audit examination of this instrument, which was properly endorsed by Frank to your client, it may be correctly concluded that:
A.
Smith was primarily liable on the instrument prior to acceptance.
B.
the instrument is nonnegotiable and thus no one has rights under the instrument.
Correct C.
no one was primarily liable on the instrument at the time of issue, April 12.
D.
upon acceptance, Clark Novelties, Inc., became primarily liable and Smith was released from all liability.
Ok, so I get that noone was liable on 4/12…but can someone tell me just WTH is going on with this instrument in general?
.