A holder in due course is based on four requirements. These
requirements are that a holder of the instrument of a complete and
authentic negotiable, for value, in good faith, and without notice of
defects. Michael met three of these requirements. He took the
payment of $6,100 from Mr. Kroll's mom Grace to repay the debt
that Gerald owed him. Kane did take the check in good faith to be
repaid for the debts owed to him.
Judge Myse considered that Kane met the three requirements. Kane
then sold Kroll some cows to hold up his deal and this is where the
instrument was provided. I don't think there are any ambiguities in
these rules of law. Kane should not be held responsible for Gerald
not being able to repay the $6,100 to Grace. Kane is a holder in due
course and is not responsible for Kroll's actions. Grace's decision to
stop the check was unethical and she should have talked it over with
her son instead of taking it out on Kane.
References
Kubasek, N., Browne, M., Herron, D., Dhooge, L., Herron, D., Barkacs,
L. (2020). Requirements for Holder-
in-Due-Course Status. McGraw-Hill Connect. Retrieved
from https://prod.reader-
ui.prod.mheducation.com/epub/sn_3b37d/data-uuid-
f862552324b34d41a55b0f8daade450c
