I have read many of the submissions and responses for this
discussion, and I think most of us agree that Kane was found to be a
holder in due course. a He met the four requirements to be a folder in
due course by determining that Kane was the holder of an authentic
instrument, the transaction was done in good faith, Kane was not
made aware of defects, and Kane took the instrument for value
(cows). The judge used state statute 403.302 to determine the
outcome of the case.
The only ambiguity I see is what parties were part of the transaction. a
Some may think the transaction was between Gerald and Kane since
Kane gave possession of the cows to Gerald even though Grace gave
the check for payment to Kane, and Gerald was still responsible for
the payment of the cows. a However, the agreement for Gerald to pay
his mother back for the cows is separate altogether and should not
have anything to do with the transaction between Kane and Grace. a I
ask myself to support this because Gerald obviously did not have the
funds to purchase the cows. a Would Kane take an instrument from
Gerald for the cows if he knew he couldn't pay for them?
Laws can not make someone ethical, but ethics can guide
determination if someone acted lawfully. a The ethical value that
guided this conclusion is integrity, exercising sound judgment in
professional practice, and adherence to ethical principles (State of
Texas, n.d.).
Kubasek, N., Browne, M., Herron, D., Dhooge, L., Herron, D., Barkacs,
L. (2020). Requirements for Holder-in-Due-Course Status. McGraw-
Hill Connect. a Retrieved from https://prod.reader-
ui.prod.mheducation.com/epub/sn_3b37d/data-uuid-
f862552324b34d41a55b0f8daade450c
State of Texas and Texas Tech University. a (n.d.). Murdough Center for
Engineering professionalism. a TTU. a Retrieved from
https://www.depts.ttu.edu/murdoughcenter/products/resources/re
commended-core-ethical-values.php
