Indorsements. James Liddell, who was doing business under the corporate name of JHL & Associates, Inc, agreed to invest Jan Mumma's funds in Fidelity, a nationally traded mutual fund management company. Mumma indorsed a cashier's check for $13,904.48 to

Question

"Fidelity/JHL & Associates." Liddell indorsed the check with JHL's indorsement stamp and deposited the check, without Fidelity's indorsement, into JHL's bank account at Rainier National Bank. Liddell never invested the funds in Fidelity. Mumma was unable to recover her money from JHL, which had become insolvent, or from Liddell, who was serving a jail sentence for fraud stemming from this incident and others like it. Mumma then attempted to recover from Rainier National Bank, claiming that the bank was negligent by not requiring both Fidelity and JHL & Associates to indorse the check. Was Mumma correct? Explain.

Answer 1

Indorsements
On appeal, the state appellate court held that the bank was not negligent in not requiring Fidelity and JHL Associates to indorse. The check had been indorsed to "Fidelity/JHL Associates." Mumma disregarded "the plain meaning of the slash symbol, which two federal courts and courts in two other states have unanimously held to mean ‘or' in the same context presented here." The court pointed out that the decision in each case rested on dictionaries' definitions of the term "virgule," all of which suggested a "disjunctive, or alternative, construction." While a virgule is used in many different situations and has different meanings, the only use of the symbol to mean "and" is the travel industry's use of M/M" to mean "Mr. And Mrs." "In the absence of a more general showing that the virgule means ‘and' in common usage, we choose to put our own law in accordance with previously decided cases on the same issue." The court also found that Mumma's case was not helped by looking to the intent of the parties: "It is difficult to accept at face value Mumma's assertion that she endorsed her check intending that both Fidelity and JHL would have to provide their endorsements. It was Liddell who instructed Mumma to endorse the check as she did, and Liddell obviously intended that only one endorsement would be required.