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RaiderCPA
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Posted: 19 Oct 2009 at 18:44 | IP Logged  
I'll paraphrase the question.

Person A induces Person B to write a promissory note to Person A and negotiates it with person C who was aware of the fraudulent activity, and negotiates it with person D.  Person C then buys the note from person D.

The answer was that person C acquires the rights as holder in due course b/c person C didn't engage in the fraudulent activities and became a holder in due course.  This seems wrong to me b/c Per. C knew the note was obtained by inducement so he dished it off to D and bought it back claiming he is a holder in due coarse.  If thats not illegal it should be.

How is this right?


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CPAINNJ
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Posted: 19 Oct 2009 at 19:05 | IP Logged  
person C is not a holder in due course .

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RaiderCPA
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Posted: 19 Oct 2009 at 19:43 | IP Logged  
After looking at it I think I get it, but is it saying that it just aquires the rights of HDC, but not as a HDC?

It still seems like person C scammed the system but if that's how it goes that's how it goes.


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CPAINNJ
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Posted: 20 Oct 2009 at 08:27 | IP Logged  

Person C is not a HDC , even if he sells it to D and buys it again.

check page 195 , wiley - exceptions of HDC.



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