Incomplete question. The full question read;
Bob writes a check to cash for $1000 to pay a bill from Acme. He then finds out that Acme breached the contract so he decides he will not pay them and puts a stop payment on the check. However, the check is stolen by Theron Thief (and Bob was not negligent) who then gives it to his landlord, Larry Landlord, to whom Theron already owes $1000. If Larry does not know about the theft or any problems with the instrument, what is the status of Larry:
1. Accommodation Indorser
2. Ordinary Holder
3. A Maker
4. Holder in Due Course
Answer:
4. Holder in Due Course
Step-by-step explanation:
Under the provisions made by the law, basically when someone holds possession of a payment instrument such as a check without knowledge that the instrument has either been:
- dishonored,
- or it has been altered, forged,
- or contain some irregularities, etc,
This individual (Larry) who holds this payment instrument in good faith is termed the Holder in Due Course.