Jill, in good faith and for value, gets from Kiley a negotiable bearer instrument. Jill does not know that Kiley stole the instrument. Jill is
A) an HDC.
B) not an HDC, because Kiley did not acquire the instrument for value.
C) not an HDC, because Kiley did not acquire the instrument in good faith.
D) not an HDC, because Kiley transferred the instrument without notice.

Question

Quizplus · Accepted Answer

Jill is considered a holder in due course (HDC) because she acquired the instrument in good faith and for value, without any notice of any defect in Kiley's title to the instrument. Kiley's wrongdoing does not affect Jill's HDC status because the instrument is negotiable and transferable by delivery. Therefore, Jill takes the instrument free from any claims or defenses that could be asserted against Kiley.

Jill, in Good Faith and for Value, Gets from Kiley