No discharge of any party operates against a subsequent holder in due course unless he has notice when she takes the instrument.

Question

Quizplus · Accepted Answer

A discharge of any party from the obligation of an instrument does not affect the rights of a holder in due course who takes the instrument without notice of the discharge. A holder in due course takes the instrument for value, in good faith, and without notice of any defect or discharge, and thus their rights in the instrument are protected.

No Discharge of Any Party Operates Against a Subsequent Holder