Alpha orally appointed Omega as his agent to find and purchase for him a 1930 Dodge automobile in good condition, and Omega located such a car. Its owner, Roe, agreed to sell and deliver the car on January 10, 2014, for $9,000. To evidence the purchase price, Omega mailed to Roe the following instrument:
December 1, 2013
$9,000.00
We promise to pay to the order of bearer Nine Thousand Dollars with interest from date of this instrument on or before January 10, 2014. This note is given in consideration of John Roe’s transferring title to and possession of his 1930 Dodge automobile.
(Signed) Omega, agent
Smith stole the note from Roe’s mailbox, indorsed Roe’s name on the note, and promptly discounted it with Sunset Bank for $8,700. Not having received the note, Roe sold the car to a third party. On January 10, the bank, having discovered all the facts, demanded payment of the note from Alpha and Omega. Both refused payment.
What are Sunset Bank’s rights with regard to Alpha and Omega? What are Sunset Bank’s rights with regard to Roe and Smith?
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