As we know in order to meet the requirement of holder of due course (HDC) as stated in
§403.302, STATS a holder of due course must meet the following requirements, “holder must
take the instrument for (1) value; (2) in good faith; and (3) without notice that it is overdue or
has been dishonored or of any defense against or claim to it on part of any person (Kubasek
et al., 2019). In my opinion Kane met all criteria to be considered of HDC. He exchanged a
product (cows) for an instrument (payment via check of $6100), accepted the check with the
intention that the transaction was valid, and funds were receivable upon payment (good faith,
and not led to believe otherwise), and had know prior knowledge of claim against payment
When looking at the rules of law, Kane had to prove beyond reasonable doubt that the
requirements for HDC were met. Judge Myse ruled in favor of Kane as all the requirements
were met without ambiguity.
In this case the ethical issue I see under the UCC would be that the cancelled check
becoming a dishonored instrument, meaning a party refuses to pay. A stop payment (refusal
to pay) was issued by Kroll, after the receipt of goods (cows) by Kane.
References:
Kubasek, N. K., Browne, M. N., Herron, D. J., Dhooge, L. J., & Barkacs, L. L. (2019).Dynamic
Business Law. McGraw Hill .
