DeAnn is the payee of a bearer instrument-a promissory note in the amount of $10,000.LeBurt offers to irrigate DeAnn's ranch next week in ex-change for the note.DeAnn agrees and delivers the note to LeBurt.LeBurt is
A) an HDC, because he promised to perform services at a future date.
B) an HDC, because the transferor was the original payee on the note.
C) not an HDC, because he did not acquire the instrument in good faith.
D) not an HDC, because he did not yet give value for the instrument.

Question

DeAnn is the payee of a bearer instrument-a promissory note in the amount of $10,000.LeBurt offers to irrigate DeAnn's ranch next week in ex-change for the note.DeAnn agrees and delivers the note to LeBurt.LeBurt is 
A) ​an HDC, because he promised to perform services at a future date. 
B) ​an HDC, because the transferor was the original payee on the note. 
C) ​not an HDC, because he did not acquire the instrument in good faith. 
D) ​not an HDC, because he did not yet give value for the instrument.

Quizplus · Accepted Answer

LeBurt is not an HDC because he has not given any value for the instrument yet. The promise to irrigate the ranch next week is a future promise and does not constitute giving value at the time of transfer. Therefore, LeBurt cannot be considered an HDC.

DeAnn Is the Payee of a Bearer Instrument-A Promissory Note