The core issue here is whether a subsequent holder in due course (HDC) can enforce a negotiable instrument that was originally obtained through fraud in the inducement, assuming the instrument itself is otherwise properly executed and transferred. Mississippi law, like the Uniform Commercial Code (UCC) Article 3, distinguishes between fraud in the factum (or execution) and fraud in the inducement. Fraud in the factum occurs when a party is deceived about the nature or essential terms of the instrument itself, rendering it void. In such cases, even an HDC cannot enforce it. Fraud in the inducement, however, involves deception about the underlying reasons for signing the instrument, making the instrument voidable, not void. An HDC who takes the instrument for value, in good faith, and without notice of any defense or claim can enforce it against parties who have such voidable defenses. In this scenario, Bartholomew was induced to sign the note by misrepresentations about the collateral’s value, which constitutes fraud in the inducement. If Amelia qualifies as an HDC, she can enforce the note against Bartholomew despite the fraud. The explanation would focus on the elements of being an HDC and the distinction between void and voidable instruments under Mississippi’s adoption of UCC Article 3. The final answer is that Amelia can enforce the note.

The core issue revolves around whether a promissory note containing a clause that subordinates the maker’s obligation to the payment of a specific debt owed to a third party can still qualify as a negotiable instrument under Mississippi’s Uniform Commercial Code (UCC) Article 3. Mississippi, like other states, has adopted variations of the UCC. For an instrument to be negotiable, it must contain an unconditional promise or order to pay a fixed amount of money, payable on demand or at a definite time, and payable to order or to bearer. The presence of a clause that makes the promise to pay contingent upon the satisfaction of another debt introduces a conditionality that violates the unconditional promise requirement. Specifically, Mississippi Code Annotated § 75-3-104(a) defines a negotiable instrument as an unconditional promise or order to pay a fixed amount of money. Section 75-3-106(a) further clarifies that a promise or order is unconditional unless it states an obligation to do any act in addition to the payment of money, or it states that the promise or order is subject to or governed by another writing. The subordination clause effectively makes the payment of the note subject to the payment of another debt, thereby rendering the promise conditional. Therefore, such an instrument would not be a negotiable instrument under Mississippi law.

The core issue here is whether a holder in due course status can be maintained when the instrument is originally payable to order and is transferred by a means that does not constitute a negotiation under UCC Article 3, specifically Mississippi’s adoption of it. A negotiable instrument payable to order is negotiated by delivery with any necessary indorsement. If the instrument is transferred without indorsement, it is not negotiated. Instead, the transferee receives whatever rights the transferor had in the instrument, which is often referred to as a mere assignment. Under Mississippi Code Section 75-3-302, a holder in due course (HDC) must take the instrument for value, in good faith, and without notice of any claim or defense. Crucially, to be an HDC, one must first be a holder. A holder is defined as a person in possession of a negotiable instrument that is payable to bearer or, in the case of an instrument payable to order, the person in possession of the instrument if the person in possession is the payee or a subsequent holder. Since the instrument was payable to order and was transferred by delivery without indorsement, Ms. Gable did not become a holder of the instrument, but rather a mere assignee. As she is not a holder, she cannot be a holder in due course, even if she otherwise met the requirements of value, good faith, and lack of notice. Therefore, she takes the instrument subject to all defenses and claims that would be available in an action on a simple contract, including the defense of lack of consideration.

The scenario involves a draft presented for acceptance. For a draft to be properly presented for acceptance under Mississippi’s UCC Article 3, the presenter must typically present it to the drawee by the due date of the draft or, if no due date is stated, within a reasonable time after it is issued. Mississippi Code Section 75-3-501(a) specifies that presentment for acceptance is required to charge the drawer or endorsers of a draft if the draft states that it is to be presented for acceptance, or if it is payable more than 30 days after sight or otherwise specifies presentment for acceptance. In this case, the draft is payable 90 days after sight, which mandates presentment for acceptance. The presenter, acting on behalf of Ms. Gable, presented the draft to Mr. Henderson, the drawee, on July 15, 2023. The draft was issued on June 1, 2023, and is payable 90 days after sight. Presentment for acceptance must occur within a reasonable time after the draft is issued. Given the 90-day sight period, presenting it approximately 45 days after issuance (June 1 to July 15) is well within a reasonable time frame for such a draft. Therefore, the presentment on July 15, 2023, was a proper presentment for acceptance. A draft payable 90 days after sight is not due until 90 days after it is accepted or, if not accepted, until it is presented for acceptance. Since it was presented for acceptance on July 15, 2023, and accepted on that date, the draft becomes due 90 days after July 15, 2023. Calculating 90 days from July 15, 2023: July has 31 days, so 16 days remain in July (31 – 15 = 16). August has 31 days. September has 30 days. Total days so far: 16 (July) + 31 (August) + 30 (September) = 77 days. We need 90 days, so 90 – 77 = 13 more days. These 13 days fall in October. Thus, the draft matures on October 13, 2023. The question asks when the draft is due. Since it was accepted on July 15, 2023, and is payable 90 days after sight (which is now the date of acceptance), the due date is 90 days after July 15, 2023. The calculation confirms this is October 13, 2023.

The scenario presented involves a promissory note that contains a clause for attorney’s fees and collection costs upon default. Under Mississippi law, specifically as interpreted through UCC Article 3, a negotiable instrument must contain an unconditional promise to pay a fixed amount of money. While the principal amount and interest rate are fixed, the inclusion of attorney’s fees and collection costs can potentially render the promise conditional if these amounts are not ascertainable at the time of payment or are contingent upon an event other than non-payment. However, UCC § 3-104(a)(1) and its official comments clarify that a promise to pay attorney’s fees or collection costs, if made upon default, does not destroy negotiability. This is because such fees are a consequence of the maker’s failure to perform, not a condition precedent to the payment obligation itself. The key is that the obligation to pay the principal and interest remains fixed and certain, and the attorney’s fees are a separate, albeit related, obligation triggered by a breach. Therefore, the note remains a negotiable instrument in Mississippi, provided other requirements of negotiability are met.

The scenario involves a promissory note that is initially payable to “bearer” because it does not specify a payee. Under Mississippi Code Section 75-3-109, an instrument is payable to bearer if it states that it is payable to bearer or to the order of bearer, or to a fictitious person or otherwise indicates that it is not payable to an identified person. When an instrument is payable to bearer, it is negotiated by delivery alone, as per Mississippi Code Section 75-3-201. The question asks about the proper method of negotiation for the note as initially written. Since the note states “Pay to the order of _____”, and the blank is not filled with an identified person, it functions as a bearer instrument. Therefore, physical delivery of the note is sufficient to transfer the rights of the holder. The subsequent endorsement by the maker, while potentially relevant for other legal aspects, does not alter the initial method of negotiation for a bearer instrument. The critical aspect here is the instrument’s status as a bearer instrument due to the unfilled payee line.

The scenario describes a promissory note that is payable to order. According to Mississippi Code Section 75-3-301, a person is a holder in due course if the instrument is taken for value, in good faith, and without notice of any claim or defense against it. The question focuses on the defenses that are available against a holder in due course under Mississippi law, specifically referencing UCC Article 3. Real defenses, which are available against all holders, including holders in due course, are listed in Mississippi Code Section 75-3-305(a). These include infancy, duress that nullifies assent, fraud that induces the instrument, discharge in insolvency proceedings, and illegality of the transaction that nullifies the obligation. Personal defenses, such as breach of contract, lack of consideration, or fraud in the inducement, are generally not available against a holder in due course. In this scenario, the maker’s claim that the payee failed to deliver the promised goods constitutes a breach of contract, which is a personal defense. Therefore, this defense is not effective against a holder in due course who took the note without notice of this breach. The explanation must detail why this specific defense is personal and not real, referencing the underlying principles of negotiable instruments law as codified in Mississippi.

The scenario involves a negotiable instrument, specifically a promissory note, that is payable to order. The UCC, as adopted in Mississippi, defines a holder in due course (HIDC) as a holder who takes the instrument (1) for value, (2) in good faith, and (3) without notice that it is overdue or has been dishonored or of any defense or claim to it on the part of any person. In this case, Mr. Abernathy received the note for value, as he gave a substantial amount of money for it. He also acted in good faith, as there is no indication of dishonesty or a lack of belief in the instrument’s validity. Crucially, Mr. Abernathy had no notice of any defense or claim. The fact that the note was originally issued with a forged drawer’s signature does not automatically impute notice to a subsequent holder like Mr. Abernathy, especially if the forgery was skillfully executed and there were no surrounding circumstances that would alert a reasonable person to the defect. Under Mississippi law (UCC § 3-305), a holder in due course takes the instrument free from most defenses, including those arising from fraud in the inducement or lack of consideration. However, real defenses, such as forgery of a necessary signature or material alteration, can be asserted against a holder in due course. Since the forgery was of the drawer’s signature, and Mr. Abernathy took the note without notice of this forgery, he qualifies as a holder in due course. Therefore, he takes the note free from the maker’s defense of forgery. The maker is obligated to pay the note to Mr. Abernathy.

Under Mississippi’s Uniform Commercial Code (UCC) Article 3, a holder in due course (HDC) takes an instrument free from most defenses and claims that a prior party could assert against the original payee. To achieve HDC status, a person must take the instrument (1) for value, (2) in good faith, and (3) without notice that the instrument is overdue or dishonored or that there is any defense or claim against it. Mississippi Code Annotated § 75-3-302 outlines these requirements. In this scenario, Mr. Abernathy received the promissory note from Ms. Gable. He gave value by agreeing to cancel a pre-existing debt owed to him by Ms. Gable, which constitutes value under UCC § 75-3-303(a)(1) as it is a performance of the antecedent debt. He also took the note in good faith, as there is no indication he acted dishonestly or with a lack of commercial reasonableness. Crucially, Mr. Abernathy had no notice of any defenses or claims. The fact that the note was originally made payable to Ms. Gable and then endorsed to him does not, in itself, provide notice of any defect. The critical point is whether he had notice of a specific defense, such as fraud in the inducement or a breach of contract by the original maker, at the time he acquired the note. Since the facts state he had no such notice, he qualifies as a holder in due course. Therefore, he can enforce the note against Mr. Henderson, the maker, despite Mr. Henderson’s potential defense of a failed collateral agreement with Ms. Gable, as such personal defenses are cut off by HDC status under Mississippi Code Annotated § 75-3-305(a)(2).

The scenario involves a promissory note payable to “cash or order.” Under Mississippi Code § 75-3-109, an instrument is payable to bearer if it states that it is payable to “cash,” “the order of cash,” or any other indication that does not name a specific payee. While the phrase “cash or order” is slightly ambiguous, the UCC’s intent is to treat instruments payable to “cash” as bearer instruments. Mississippi law, specifically through the adoption of UCC Article 3, governs negotiable instruments. For an instrument to be negotiable, it must be payable to bearer or to order. When an instrument is payable to “cash,” it is treated as payable to bearer. A bearer instrument is negotiated by simple delivery. Therefore, a promissory note payable to “cash or order” is considered a bearer instrument, and its negotiation requires only delivery.

The Mississippi Uniform Commercial Code (UCC) Article 3 governs negotiable instruments. A key concept is the holder in due course (HDC). To attain HDC status, a holder must take an instrument that is (1) negotiable, (2) signed by the maker or drawer, (3) a promise or order to pay a fixed amount of money, (4) payable on demand or at a definite time, (5) payable to order or to bearer, and (6) not stating any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, except as authorized by this section. Furthermore, the holder must take the instrument (1) for value, (2) in good faith, and (3) without notice that the instrument is overdue or has been dishonored or that there is a defense or claim to it on the part of any person. In the given scenario, the promissory note from Bayou Builders to Cypress Development is a negotiable instrument. Cypress Development then negotiates the note to Magnolia Bank. Magnolia Bank took the note for value, as it provided funds to Cypress Development. The critical element is whether Magnolia Bank had notice of any defenses or claims. The fact that Bayou Builders had already filed a lawsuit against Cypress Development for breach of contract regarding the underlying construction project, and this lawsuit was widely reported in local newspapers, is crucial. Such widespread public knowledge of a significant dispute related to the instrument’s creation would likely constitute notice of a claim or defense to Magnolia Bank, preventing it from qualifying as a holder in due course under Mississippi UCC § 75-3-302. Therefore, Magnolia Bank takes the instrument subject to any defenses Bayou Builders may have against Cypress Development.

The core issue here is whether the instrument qualifies as a negotiable instrument under Mississippi’s UCC Article 3. For an instrument to be negotiable, it must contain a promise or order to pay a fixed amount of money, payable on demand or at a definite time, to order or to bearer, and must not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money. In this scenario, the inclusion of “subject to the terms and conditions of the collateral agreement dated January 15, 2023” creates an express condition to payment. This reference makes the payment obligation conditional, meaning the payee’s right to receive payment is contingent upon the satisfaction of terms within the separate collateral agreement. Mississippi Code Section 75-3-104(a)(1) requires that a negotiable instrument contain an unconditional promise or order. By referencing another agreement that dictates the terms and conditions of payment, the promise to pay is no longer unconditional. Therefore, the instrument is not a negotiable instrument.

The scenario involves a draft that is payable to a fictitious person. Under Mississippi Code Section 75-3-110(1)(d), an instrument is payable to bearer if it is payable to a fictitious person or to a non-existent entity. This is often referred to as the “fictitious payee rule.” When a negotiable instrument is made payable to a fictitious person, and the drawer or maker intends for that fictitious person to have no rights in the instrument, the instrument is deemed payable to bearer. Mississippi law, consistent with UCC Article 3, treats instruments payable to fictitious payees as bearer paper. This means that negotiation can be effected by mere delivery, and a holder in due course can acquire rights in the instrument even if the payee’s indorsement is forged or absent. The key element is the drawer’s intent to make the instrument payable to someone who does not exist or who is fictitious, and that the drawer does not intend for that named payee to have any rights. Therefore, the draft is payable to bearer.

The scenario involves a negotiable instrument, specifically a promissory note, that contains a clause allowing the holder to demand payment “on or before December 31, 2025.” Under Mississippi’s Uniform Commercial Code, Article 3, a negotiable instrument must be payable on demand or at a definite time. A definite time is established if it is payable on stated dates or a period after a stated date. A note payable “on or before” a specific date is considered payable on demand. This is because the holder has the option to demand payment at any time up to that specified date, effectively making it a demand instrument. Mississippi Code Section 25-3-108(1) states that “Instruments payable on demand include those payable at sight or presentation and those in which no time for payment is stated.” While the phrase “on or before” grants flexibility to the holder, it does not introduce uncertainty about the *latest* possible payment date, which is a definite time. Therefore, the instrument remains negotiable. The key is that the payment date is ascertainable and within the holder’s control to accelerate. The UCC prioritizes the negotiability of instruments where the payment terms, even if flexible for the holder, are ultimately fixed or subject to a clear trigger. The inclusion of “or before” simply means the holder can elect to receive payment earlier than the stated latest date, but the latest date itself is a definite time.

The scenario involves a negotiable instrument that was originally payable to a specific person, Ms. Evangeline Dubois. The key issue is whether a subsequent endorsement “Pay to the order of Cash” by Ms. Dubois, followed by a blank endorsement by an unknown party, effectively transfers the instrument to the bearer. Under Mississippi’s UCC Article 3, specifically Miss. Code Ann. § 75-3-205, an instrument payable to an identified person becomes payable to bearer when it is endorsed in blank. An endorsement “Pay to the order of Cash” is considered a special endorsement to a named payee, but the named payee in this case is “Cash,” which is treated as a bearer instrument by operation of law. However, the initial endorsement by Ms. Dubois was “Pay to the order of Cash.” This phrasing, when applied to an instrument originally payable to a specific person, effectively converts the instrument to a bearer instrument, meaning it is payable to anyone in possession of it. The subsequent blank endorsement by an unknown party is then irrelevant for determining who the rightful holder is, as the instrument was already bearer paper. Therefore, the holder is the person in lawful possession of the instrument.

The core issue revolves around whether the instrument qualifies as a negotiable instrument under Mississippi’s UCC Article 3, specifically concerning the “unconditional promise or order” requirement. Mississippi Code Section 75-3-104(a) defines a negotiable instrument as an unconditional promise or order to pay a fixed amount of money, if it is payable to bearer or to order at the time it is issued or first possessed by a holder, payable on demand or at a definite time, and not stating any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money. The phrase “subject to the terms and conditions of the mortgage loan agreement” in the promissory note introduces a contingency. This language explicitly links the payment obligation to the terms and conditions of another agreement, thereby making the promise conditional. Under UCC § 3-104(a)(1), a promise or order is conditional if it states an obligation to do any act in addition to the payment of money, or if it states that the promise or order is subject to or governed by another writing. The inclusion of “subject to the terms and conditions of the mortgage loan agreement” directly violates this provision by making the payment dependent on the stipulations within that separate agreement, which could include various covenants, default provisions, or prepayment penalties not inherent to a simple promise to pay money. Therefore, the instrument is not negotiable because the promise to pay is not unconditional.

The core issue here is determining the enforceability of the promissory note against the estate of the deceased maker, Ms. Eleanor Vance, given the holder’s (Mr. Silas Croft) failure to provide timely notice of dishonor. Under Mississippi’s Uniform Commercial Code (UCC) Article 3, specifically concerning presentment and notice of dishonor, there are rules governing when such notice is required and the consequences of failing to provide it. Generally, notice of dishonor must be given to the drawer or endorser of an instrument. However, for a promissory note, the maker is primarily liable. The question hinges on whether Mr. Croft’s actions, or lack thereof, discharged any liability for the estate of Ms. Vance. Mississippi Code § 75-3-503(b) generally requires notice of dishonor to be given to drawers and endorsers. For a note payable at a bank, presentment must be made by or on behalf of the holder to a bank against which the instrument is payable. For a note not payable at a bank, presentment is not strictly required for the maker’s liability, but it is for discharge of drawers and endorsers. Here, Ms. Vance was the maker. The note was due on a specific date, and it was not paid. Mr. Croft did not present the note for payment or give notice of dishonor to Ms. Vance during her lifetime, nor did he provide notice to her estate within the permissible timeframes after her death. Mississippi Code § 75-3-504(b) states that the liability of a party is not discharged by the failure to give notice of dishonor unless the party is a drawer or endorser. Since Ms. Vance was the maker, her liability is not discharged by the failure to give notice of dishonor. The UCC distinguishes between the obligations of makers, drawers, and endorsers. A maker’s obligation is to pay the instrument according to its terms. The failure to give notice of dishonor primarily impacts drawers and endorsers, who are secondarily liable, by potentially discharging their liability. For a maker, the primary obligation remains unless other defenses are available. The failure to present the note for payment to the maker during her lifetime does not discharge the maker’s obligation on the note. Similarly, the failure to provide notice of dishonor to the maker’s estate does not discharge the estate’s obligation on the note. The estate, by inheriting Ms. Vance’s assets, also inherits her liabilities, including valid debts represented by negotiable instruments, unless a specific defense applies. In this scenario, the failure to provide notice of dishonor to the estate does not provide a defense to the estate for non-payment of the note. Therefore, Mr. Croft can enforce the note against Ms. Vance’s estate.

In Mississippi, as under the Uniform Commercial Code (UCC) Article 3, a holder in due course (HOC) takes an instrument free from most defenses and claims that a prior party could assert against the original payee. However, certain defenses, known as real defenses, can be asserted even against an HOC. These real defenses are enumerated in UCC § 3-305(a)(1) and include infancy, duress that nullifies assent, fraud that induces the obligation of the obligor, discharge in insolvency proceedings, and any other discharge of which the holder in due course has notice when taking the instrument. Apparent or fraudulent misrepresentation that relates to the nature of the instrument itself, rather than its terms or consideration, constitutes a real defense. For instance, if a party is tricked into signing a negotiable instrument believing it to be something entirely different, such as a receipt or a deed, this would be considered fraud in the factum, a real defense. Conversely, fraud in the inducement, where a party is induced to sign an instrument by a false promise or misrepresentation about the underlying transaction, is a personal defense and is cut off by an HOC. Therefore, a forged signature generally renders the instrument void and is a real defense because the purported signer never became a party to the instrument. Similarly, a material alteration that is fraudulent and not consented to by the obligor can be a real defense against an HOC regarding the altered amount, but not necessarily the original amount. The question posits a scenario where a negotiable instrument is acquired by an HOC. The critical element is the nature of the defense raised by the maker. If the maker can establish a real defense, the HOC’s status will not shield them from that defense. Fraud in the factum, such as being deceived about the very nature of the document signed, is a real defense that can be asserted against an HOC in Mississippi.

The scenario involves a promissory note that was originally payable to “bearer.” Under Mississippi’s UCC Article 3, a negotiable instrument payable to bearer is transferable by mere delivery. The original payee, Ms. Delilah Dubois, endorsed the note in blank by simply signing her name on the back. This blank endorsement converts the bearer instrument into an instrument payable to bearer, meaning anyone in possession of the note can negotiate it. Mr. Chester Carmichael, the subsequent holder, then negotiated the note to Ms. Beatrice Bell. Since the note was payable to bearer at the time of its negotiation to Ms. Bell, and it was transferred by delivery with the blank endorsement already present, Ms. Bell becomes a holder in due course if she meets the other requirements (value, good faith, without notice of any defense or claim). The fact that Mr. Carmichael later added his own special endorsement to Ms. Bell does not alter the initial character of the instrument as bearer paper upon its transfer to her, nor does it negate her potential holder in due course status. Therefore, Ms. Bell is a holder of the note, and the instrument remains payable to bearer.

The core concept here revolves around the enforceability of a negotiable instrument against a drawer who has stopped payment due to a claim of breach of contract by the payee. Under Mississippi’s Uniform Commercial Code (UCC) Article 3, specifically concerning negotiable instruments, a holder in due course (HDC) takes an instrument free from most defenses, including claims in recoupment or defenses arising from the underlying contract, unless the defense is one of the few real defenses enumerated in the UCC. A stop payment order is a contractual remedy, not a real defense under UCC § 3-305(a)(2). If the bank honors the stop payment order, it is liable to the drawer for wrongful payment, but this does not affect the negotiability of the instrument itself or the rights of a holder who took it in due course. A holder who is not an HDC, however, takes the instrument subject to all defenses and claims that were available against the original payee. The scenario states that the instrument is a negotiable promissory note, and it is transferred to a third party. The critical factor is whether this third party qualifies as a holder in due course. To be an HDC, the holder must take the instrument (1) for value, (2) in good faith, and (3) without notice that it is overdue or has been dishonored or of any defense or claim to it on the part of any person. If the third party meets these criteria, they can enforce the note against the maker, even if the maker has a defense against the original payee due to a breach of contract. The stop payment order itself does not invalidate the instrument or prevent its negotiation. The maker’s recourse for the breach of contract would be against the original payee, not by refusing payment to a subsequent holder in due course. Therefore, the third party, as a holder in due course, can enforce the note.

The scenario presented involves a promissory note that is payable on demand. Under Mississippi Code Section 75-3-108(a), a instrument is payable on demand if it states that it is payable on demand, at sight, or when otherwise expressed to be payable on presentation. The note states “Payable on presentation,” which is functionally equivalent to “payable on demand.” Therefore, the holder of the note, Ms. Evangeline Dubois, can demand payment at any time. The fact that the note was originally issued to Mr. Silas Croft, the payee, and subsequently endorsed to Ms. Dubois, makes Ms. Dubois a holder in due course if she meets the criteria outlined in Mississippi Code Section 75-3-302. These criteria include taking the instrument for value, in good faith, and without notice that the instrument is overdue or has been dishonored or that there is a defense or claim to it. Assuming Ms. Dubois meets these requirements, she takes the note free of most defenses that the maker, Mr. Barnaby Finch, could assert against the original payee. The critical element here is the “payable on demand” nature of the instrument, which allows the holder to seek payment immediately upon presentation, subject to the rules of holder in due course status.

The Mississippi Uniform Commercial Code, specifically Article 3, governs negotiable instruments. A key concept is the holder in due course (HDC). To qualify as an HDC, a holder must take an instrument that is complete and regular on its face, that is not overdue or dishonored, and that the holder took in good faith and without notice of any claim to the instrument or defense against it. In this scenario, the note is incomplete because the payee’s name is missing. This incompleteness, apparent on the face of the instrument, prevents the transferee from being a holder in due course, regardless of whether they paid value or took in good faith. Mississippi Code Section 75-3-302 outlines the requirements for being a holder in due course. Because the instrument was not complete when transferred, the transferee takes it subject to any defenses that would be available against the original transferor, including the defense of lack of consideration or fraud in the inducement. Therefore, the transferee cannot enforce the instrument against the maker if the maker has a defense. The absence of a named payee means the instrument is not properly payable and thus not “complete and regular on its face” as required by UCC 3-302.

The core concept here is the distinction between a holder in due course (HDC) and a mere holder of a negotiable instrument. For an individual to attain HDC status under Mississippi’s UCC Article 3, they must satisfy several criteria. First, the instrument must be negotiable. Second, the holder must take the instrument for value, in good faith, and without notice that it is overdue or has been dishonored or that any defense or claim to it exists. In this scenario, Ms. Gable receives the promissory note as a gift, which means she did not give value for it. Mississippi law, consistent with the Uniform Commercial Code, requires that value be given for the instrument. Without giving value, Ms. Gable is merely a holder and is subject to all the defenses that the maker, Mr. Henderson, could assert against the original payee, Ms. Dubois. Specifically, Mr. Henderson can raise the defense of fraudulent inducement, as he was misled into signing the note. Since Ms. Gable is not an HDC, this defense is fully available to her. Therefore, Mr. Henderson is not obligated to pay the note to Ms. Gable.

The scenario involves a promissory note that was originally payable to “bearer.” Under Mississippi Code Section 75-3-109, a negotiable instrument is payable to bearer if it states that it is payable to bearer or to a specific person or bearer, or to an identified person or bearer, or if it does not state a payee or the only payee is an address. Mississippi Code Section 75-3-201(b) states that a possessor of a bearer instrument may negotiate it by transfer of possession alone. Therefore, when Beatrice delivered the note to Cecil by simply handing it to him, she effectively negotiated the instrument to Cecil. The subsequent endorsement by Cecil to Danielle is also a valid negotiation under Mississippi law, as an endorsement on a bearer instrument can convert it into an instrument payable to a specific person if the endorsement is to a specific person. However, the initial negotiation from Beatrice to Cecil occurred through mere delivery because the instrument was payable to bearer. The question asks about the initial negotiation to Cecil. The fact that the note was secured by a mortgage in Mississippi is relevant to its enforceability as a debt instrument but does not alter its negotiability or the method of negotiation under UCC Article 3, which governs negotiable instruments. The UCC preempts state-specific property law regarding the transfer of the negotiable instrument itself. Thus, the transfer of possession was sufficient for negotiation.

The scenario presented involves a promissory note that contains a clause for attorney’s fees and collection costs. Under Mississippi law, specifically as codified in Mississippi Code Section 75-3-104(a)(5) and the general principles of UCC Article 3, an instrument is a negotiable instrument if it contains an unconditional promise to pay a sum certain in money and no other undertaking or instruction by the person promising or ordering, except as authorized by this chapter. While a promise to pay attorney’s fees or the collection of an instrument is not an undertaking that prevents an instrument from being negotiable, it must not render the amount payable uncertain. Mississippi Code Section 75-3-104(c) states that the addition of “or the like” to the words “negotiable” or “negotiable instrument” does not affect the negotiability of an instrument. Furthermore, Mississippi Code Section 75-3-112(b) explicitly permits the inclusion of provisions for attorney’s fees and collection costs without affecting negotiability, provided these are tied to collection or enforcement, which is the case here. Therefore, the inclusion of the clause for attorney’s fees and collection costs does not destroy the negotiability of the note, as these are considered incidental to the promise to pay and are permitted under the UCC as adopted in Mississippi. The note still meets the requirements of a negotiable instrument because the promise to pay is for a sum certain (the principal amount plus stated interest) and the attorney’s fees clause is a permissible additional undertaking.

This question tests the concept of the holder in due course (HDC) status and its implications for defenses against payment on a negotiable instrument, specifically in the context of Mississippi law which largely follows UCC Article 3. For a party to be a holder in due course, they must take the instrument for value, in good faith, and without notice that it is overdue or has been dishonored or that there is a defense or claim against it. In this scenario, Ms. Dubois purchased the note from Bank of Mississippi. The critical factor is whether she had notice of any defenses. The fact that the note was post-dated by only three days is unlikely to constitute notice that the instrument is overdue under UCC § 3-304(a)(2), as it would not be considered overdue until after the stated due date has passed. Furthermore, the scenario does not suggest that Ms. Dubois acted in bad faith or that she had notice of any other defenses or claims against the instrument when she acquired it. Therefore, she would likely qualify as a holder in due course. A holder in due course takes the instrument free from all defenses of any party to the instrument with whom the holder has not dealt, except for certain real defenses enumerated in UCC § 3-305(a)(1). Ordinary defenses, such as breach of contract or failure of consideration, are personal defenses and are cut off by a holder in due course. Since the scenario does not indicate any real defenses are present, and Ms. Dubois appears to meet the HDC requirements, she can enforce the note against Mr. Gable despite his claim of non-delivery of the goods.

This question tests the concept of holder in due course (HDC) status and its implications for defenses against payment on a negotiable instrument under Mississippi law, which largely follows UCC Article 3. A party seeking HDC status must acquire the instrument for value, in good faith, and without notice of any defense or claim. In this scenario, Mr. Abernathy receives the promissory note after it has already been dishonored by non-payment. Dishonor is a critical event that puts any subsequent holder on notice of potential problems with the instrument. Mississippi Code Section 75-3-302(1)(a) defines a holder in due course as a holder that takes the instrument when it is not overdue or dishonored and without notice of any dishonor. Since Mr. Abernathy acquired the note after it was already dishonored, he cannot meet the requirements for HDC status. Consequently, he takes the instrument subject to all defenses that would be available in an ordinary contract action, including the defense of fraud in the inducement raised by Ms. Dubois. Fraud in the inducement is a real defense that can be asserted against any holder, including one who is not an HDC. Therefore, Ms. Dubois can assert this defense against Mr. Abernathy.

The core issue here is whether a holder in due course (HDC) status can be maintained when the instrument is transferred in a transaction that is void ab initio. Under Mississippi law, which largely follows the Uniform Commercial Code (UCC) Article 3, a holder can acquire HDC status by taking an instrument for value, in good faith, and without notice of any defense or claim. However, certain defenses, known as real defenses, can be asserted against even an HDC. A defense that renders the underlying obligation or transfer of the instrument void ab initio is a real defense. In this scenario, the purported sale of the antique clock was based on a fraudulent misrepresentation of its authenticity, making the entire transaction, and thus the transfer of the promissory note, void from the beginning. Mississippi Code Section 27-1-1, while pertaining to taxation, does not directly address negotiable instruments. Instead, UCC § 3-305(a)(1) is pertinent, stating that a party’s liability on an instrument may be discharged by a defense of a type that could be asserted against a holder in ordinary course of business. UCC § 3-305(a)(1)(ii) specifically enumerates “a defense of the kind that all contract, including a contract of the kind, that the law of Mississippi would not enforce” as a real defense. A void contract, meaning one that was never legally valid, falls under this category. Therefore, the fraud in the inducement that made the sale void from its inception constitutes a real defense that can be asserted against any holder, including an HDC. Consequently, the original maker of the note can successfully assert this defense to avoid liability. The concept of voidable versus void is critical; if the transaction were merely voidable, an HDC could still enforce the instrument. However, a transaction void ab initio means no valid obligation ever arose, thus preventing the establishment of a valid transfer and HDC status.

The scenario involves a promissory note that is initially payable to order. The UCC, specifically Article 3, governs negotiable instruments. For an instrument to be negotiable, it must contain certain elements, including being payable to order or to bearer. In this case, the note is payable “to the order of Jasper County Bank.” When the note is transferred by endorsement and delivery to a holder in due course, it generally remains a negotiable instrument, subject to defenses. However, the critical aspect here is the nature of the transfer and the subsequent actions. If the instrument is transferred by endorsement and delivery, and the transferee is not a holder in due course, then the transferee takes the instrument subject to all defenses and claims that could be asserted against the transferor. In Mississippi, like other states that have adopted the UCC, a holder in due course takes an instrument free from certain defenses, but not all. Real defenses, such as infancy, duress, or material alteration, can be asserted even against a holder in due course. Personal defenses, such as breach of contract or lack of consideration, are generally cut off by a holder in due course. The question asks about the enforceability of the note against the maker by a subsequent holder who is not a holder in due course. Since the subsequent holder is not a holder in due course, they are subject to any defenses the maker may have against the original payee. The fact that the note was initially payable to order and then endorsed and delivered does not alter the rule that a non-holder in due course takes subject to defenses. Therefore, the maker can assert any valid defenses they have against the original payee, Jasper County Bank, against this subsequent holder. The calculation is not applicable here as this is a conceptual question about negotiable instruments law under Mississippi’s UCC Article 3. The explanation focuses on the legal principles governing the transfer of negotiable instruments and the rights of holders versus holders in due course when defenses are present.

The core issue here revolves around the concept of a holder in due course (HDC) and the defenses available against such a holder under Mississippi’s Uniform Commercial Code (UCC) Article 3. For an instrument to be negotiable, it must meet specific requirements outlined in UCC § 3-104, including being an unconditional promise or order to pay a fixed amount of money, payable on demand or at a definite time, and payable to order or to bearer. If an instrument is not negotiable, then a subsequent holder cannot qualify as an HDC, and all defenses, including personal defenses, are available against them. In this scenario, the promissory note explicitly states that payment is contingent upon the successful completion of the “Magnolia Bridge Project.” This contingency makes the promise to pay conditional, thus rendering the instrument non-negotiable. Mississippi’s UCC § 3-106(a) defines a promise as conditional if it states an obligation to do any act or series of acts beyond the payment of money. Because the note’s payment is tied to an external event (project completion), it fails the unconditional promise requirement for negotiability. Consequently, even if Ms. Gable took the note for value, in good faith, and without notice of any claim or defense, she cannot be a holder in due course because the instrument itself is not negotiable. Therefore, Mr. Harrison can assert any defense that would be available against a simple contract, including the failure of consideration or breach of contract related to the project’s completion. The Mississippi UCC, specifically § 3-305, outlines the claims in recoupment and defenses available against a holder, and since Ms. Gable is not an HDC, these defenses are fully applicable.