According to the UCC Section 3-302, to be considered a holder in due
course-
“
1. The party must be a holder of a complete and authentic negotiable instrument.
2. The holder must take the instrument for value.
3. The holder must take the instrument in good faith.
4. The holder must take the instrument without notice of defects. a a a “
Kane was a holder in due course because he took the check in good faith of payment,
without knowing about the deal between Gerald and Grace. He also took the check for the
value of the cows. The court reasoned that Kane was a holder whether or not Grace
cancelled the check. I think that was unethical on her part to do so after she already agreed
to pay him. Kane had nothing to do with the agreement between Gerald and Grace, they
should have settled it between themselves instead. Going back on an agreement, especially
after receiving the cows, is unethical. Kane should have been paid properly.
Kubasek, N., Browne, N. M., Herron, D., Dhooge, L., & Barkacs, L. (2019). Dynamic
Business Law (5th ed.). McGraw Hill.
