Parkdale Roofing Company receives a check from Quik Mart for fixing its roof,and indorses the check to Repair Supplies,Inc.(RSI).Stef,RSI's owner,gives the check to Tiny as a gift.In this situation,the party who is not an HDC of the check but who acquires HDC rights under the shelter principle is

Question

Quizplus · Accepted Answer

Tiny is the party who is not an HDC but acquires HDC rights under the shelter principle. When Parkdale Roofing indorsed the check to RSI, RSI became the HDC (holder in due course). When RSI indorsed the check to Stef, Stef received HDC rights. Stef then gave the check to Tiny as a gift, and under the shelter principle, Tiny acquires the same HDC rights that Stef had.

Parkdale Roofing Company Receives a Check from Quik Mart for Fixing