Exam 25: Transferability and Holder in Due Course

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.

Dora receives a check from Eagle Corporation. Dora indorses the check to First National Bank by writing "pay to First Nat'l Bank only" and signing her name. This is

Negotiation is a transfer in such form that the transferee becomes a holder.

Fact Pattern 25-A1 Rollo obtains a check payable to his order from Simone. Rollo signs the back and gives the check to Trey. Trey writes “Pay to Trey” above Rollo’s signature. -Refer to Fact Pattern 25-A1. After Trey writes "Pay to Trey" above Rollo's signature, further negotiation of the check

Jill, in good faith and for value, gets from Kit a check "payable to the order of bearer." Jill does not know that Kit stole the check. Jill is

A person who receives an instrument as a gift normally becomes an ordinary holder.

The shelter principle allows persons who formerly held instruments to improve their positions by later reacquiring the instruments from HDCs.

Ollie negotiates an order instrument to Phil by

Florencia, who is not a GigaBank customer, attempts to cash a check drawn on the bank. The check is considered dishonored if GigaBank

Fact Pattern 25-A1 Rollo obtains a check payable to his order from Simone. Rollo signs the back and gives the check to Trey. Trey writes “Pay to Trey” above Rollo’s signature. -Refer to Fact Pattern 25-A1. When Trey writes "Pay to Trey" above Rollo's signature, Rollo's signature becomes

An order instrument is negotiated by delivery with any necessary indorsements.

Tiffany transfers a draft by signing it and delivering it to Uma. Tiffany is

Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Kilroy is

Knowledge of one defense precludes a holder from asserting HDC status in regard to all other defenses.

Colby fraudulently induces Dian to sign a note. Colby sells the note to Elen, who does not know of the fraud and takes the note for value and in good faith, and thus becomes an HDC. Elen sells the note to Fred, who sells the note back to Colby. Does Colby acquire Elen's HDC rights in the note

An instrument is not defective simply because it is overdue.

Gina writes and signs a check payable to "Happy Market." Ira, Happy's manager, indorses the check "For deposit only." This is

Mike receives a payroll check from National Computer Systems, Inc., and indorses it by signing his name on the back of the check. This is

An executory promise does not constitute sufficient value to make the promisor a holder.

Fact Pattern 25-A1 Rollo obtains a check payable to his order from Simone. Rollo signs the back and gives the check to Trey. Trey writes “Pay to Trey” above Rollo’s signature. -Refer to Fact Pattern 25-A1. When Trey writes "Pay to Trey" above Rollo's signature, the check becomes