Kane had sold Kroll cows. Kroll could not pay for all of the cows, and
there was an agreement made stating that Gerald would compensate
Kane when the sale of a load of hay was completed. Geralds mother
wrote a check for the amount agreed upon for the sale of the cows.
The sale of Geralds load of hay fell through. Gerald let Kane know
that he would not be able to pay for the cows and Grace put a stop
payment on the check. When Kane tried to cash the check, the bank
rejected it, and Kane filed a lawsuit against Grace for the amount of
the check. Graces stance as told to the courts that she had no legal
financial obligations to this transaction as it was Geralds debt. Since
Kane did not document the acceptance of this check, he is not a
holder in due course as the check was taken in good faith without
any documentation. Kane appealed this argument as well.
There are three requirements for someone to be a holder in due
course. These three are taking the instrument of value, in good faith
and without and claim or defense by the other party. The first one is
when Kane accepted the check as payment. the second one is that
Kane took the check in good faith. In this case it was shown the
check was only taken in good faith without any confirmation from
either party.
The burden of proof rest on the plaintiff, and that is not needed.
the plaintiff allege in this case is that good faith was a major part in
this business exchange. In this case there is aren't any affidavits by
either party that there was any bad faith by Kane. With this
information not being available we can close on the fact that Kane
too the check in good faith, and this is by the matter of the law.
Kubasek, N. K., Browne, M. N., Dhooge, L. J., Herron, D. J., &
Barkacs, L. L. (2020). Dynamic Business Law (fifth). New York, Ny:
Mcgraw-Hill Education.
