There are three requirements for someone to be a holder in due course. The holder must
value the instrument, meaning the holder must provide money or goods for the instrument.
Another is that the holder must take the instrument in good faith. The third requirement is
that the holder takes the instrument without notice that it is overdue or dishonored. The
first requirement was met, as Kane took the check as payment for the purchase of the cows
in good faith, and this met the second requirement. Kane also did not know about any
claims or defenses when he accepted the check, so he met the third requirement.
The law allows for one to accept payment from one person to pay for the debt of another,
which is what Kane did. Kane did not know about any arrangement that Gerald had with
Grace and accepted the check in good faith. The law guided the judge, the moral behavior
of all the parties involved, and the ethical value of integrity guided the conclusion. Kane
lived up to his end of the bargain and delivered the cows for payment. Grace made the
payment on behalf of her son, with whom she had a separate arrangement that had nothing
to do with the plaintiff.
Reference
Kubasek, N., Browne, N. M., Herron, D., Dhoohe, L., & Barkacs, l. (2019). Dynamic
Business Law (5thed.). McGraw Hill.
