Understanding Holder in Due Course Rights
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kimoymoy7Understanding Holder in Due Course Rights
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kimoymoy7Chapter 3. Holder in Due Course Section 52. What constitutes a HIDC.
A HIDC is a holder who has taken the inst under the ff condns: (a) that it is complete & regular on its face; (b) that he became holder of it before it was overdue & w/o notice that it has been previously dishonored, if such was the fact; (c) that he took it in Good Faith & for Value; (d) that at the time it was negotiated to him he had no notice of any infirmity in the inst OR defect in the title of the person negotiating it.
A. Rights of a Holder in Due Course Section 57. A HIDC holds the inst free from any defect of title of prior parties & Rights of free from defenses available to prior parties among themselves & HIDC. may enforce payment of the instr o for the full amt thereof o against all parties liable thereon. Section 58. When subj to orig defense. In the hands of any holder other than a HIDC a nego inst is subj to the same defenses as if it were non-nego. But a holder who derives his title thru a HIDC & is not himself a party to any fraud or illegality affecting the inst has all the rights of such former holder in respect of all parties prior to the latter.
B.
Holder for Value
1. What Constitutes Value Section 24. Every NI is deemed prima facie to have been issued for a valuable consideration & Presumption every person whose signature appears thereon to have become a party thereto for value. of consideration. Section 25. What constitutes value. Value any consideration sufficient to support a simple K. An antecedent or pre-existing debt - constitutes value & - is deemed such whether the inst is payable on demand OR at a future time.
2. Bank Credit for Value 3. What Constitutes a Holder for Value Where value has at any time been given for the inst Section 26. the Holder is deemed a Hfv What constitutes In respect to all parties who become such prior to that time. Hfv. 4. Where Holder has a Lien on Instrument Where the holder has a lien on the inst arising either Section 27. from K or When lien on by implication of law instrument he is deemed a Hfv to the extent of his lien. constitutes Hfv. 5. Burden of Proof
See Section 24.
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