Patch-It Roofing Company receives a check from Quik Mart for fixing its roof,and indorses the check to Repair Supplies,Inc.(RSI).Sam,RSI's owner,gives the check to Todd 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

Todd is the party who is not an HDC but acquires HDC rights under the shelter principle because he received the check as a gift from RSI, who acquired HDC rights by indorsing the check from Patch-It Roofing. The check was originally issued to Patch-It Roofing and the indorsement from Patch-It Roofing to RSI was valid, which means that RSI became an HDC. Since Todd received the check from RSI, he has the same rights and protections as an HDC under the shelter principle.

Patch-It Roofing Company Receives a Check from Quik Mart for Fixing