Yes, Davidson will be successful in recovering the $5000 from the Bakers in cour
ID: 373820 • Letter: Y
Question
Yes, Davidson will be successful in recovering the $5000 from the Bakers in court.
Reaosn- In case of negotiable instrument, which is payble to bearer, holder in due course must be a possessor of the negotiable instrument and in case of negotiable instrument payble to order then he must be the payee or endorsee of the negotiable instrument.
One of the privilege of holder in due course is that every prior party to the negotiable instrument is liable to holder in due course and no prior party can set up a defence that the negotiable instrument is drawn, made or endorsed by hum without any consideration.
Hence inthe given case, It is given that Davidson is a holder in due course, which gives him a right to recover his $5000 from Baker.
Explanation / Answer
In a paragraph is two answer the following case: “Without authority to do so, Allen signed Baker’s name on a note, promising to pay Cohen $5,000 in 30 days. The note was negotiated to Davidson who was a holder in due course. Will Davidson be successful in recovering the $5,000 from Baker in court? Why or why not?”
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