Jones issued a check to Smith in return for Smith's promise to do work. Smith never did the promised work, but offered to buy goods from Gomez by endorsing the check to Gomez. Gomez had had no prior dealings with Jones or Smith, but accepted the check in payment. Gomez:
A) cannot be a holder in due course.
B) is considered an assignee of Smith's rights.
C) is a holder through a holder in due course.
D) is a holder in due course.

Question

Quizplus · Accepted Answer

Gomez can be a holder in due course because he took the check for value, in good faith, and without notice of any defect in title or claim of fraud in the transaction between Jones and Smith.

Jones Issued a Check to Smith in Return for Smith's