Wyoming’s adoption of UCC Article 3, specifically the provisions concerning holder in due course status, is central to this question. 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 holder must take the instrument for value, in good faith, and without notice that it is overdue or has been dishonored or that it contains an unauthorized signature or is otherwise irregular or incomplete. In this scenario, the bank’s knowledge of the underlying dispute between the original parties, specifically that the note was given for a service that was never rendered, constitutes notice of a defense. This notice prevents the bank from being considered a holder in due course under Wyoming law, as per Wyo. Stat. § 34.1-3-302. Therefore, the bank takes the note subject to the defense of failure of consideration available to the maker, Mr. Abernathy. The bank’s claim is thus subject to Mr. Abernathy’s defense that the note was issued without consideration.

The scenario involves a promissory note that contains a clause allowing the holder to accelerate payment if they deem themselves insecure. Under Wyoming’s Uniform Commercial Code (UCC) Article 3, specifically Wyo. Stat. § 34.1-3-109(c), a term providing for acceleration “at will” or when the holder “deems himself insecure” or “in substantially the same language” is effective, but it requires the holder to act in good faith. Good faith, as defined in Wyo. Stat. § 34.1-1-201(b)(xx), means honesty in fact and the observance of reasonable commercial standards of fair dealing. The question asks about the effect of such a clause when the note is transferred to a holder who is not the original payee. The transfer of a negotiable instrument does not alter the enforceability of acceleration clauses, provided they are validly included and the holder acts in good faith. Therefore, if the new holder, a bank in Cheyenne, Wyoming, has a reasonable, good-faith belief that the maker’s financial condition has deteriorated, making payment uncertain, they can accelerate the note. The ability to accelerate payment is a right that passes with the instrument to a subsequent holder. The question tests the understanding that acceleration clauses, when properly drafted and exercised in good faith, are enforceable by transferees of the instrument. The core concept is the good faith requirement for exercising such clauses, which is a standard under UCC Article 3 applicable in Wyoming.

The scenario involves a promissory note that is not payable to order or to bearer. Under Wyoming’s Uniform Commercial Code (UCC) Article 3, specifically Wyoming Statute § 34.1-3-104(c), an instrument that would otherwise be a negotiable instrument but is not payable to order or to bearer is not negotiable. However, it may still be a negotiable instrument if it meets the other requirements of negotiability and is payable to a specific identifiable person. The key here is that the instrument is payable to “the estate of the late Arthur Finch.” While an estate is a legal entity, it is not typically considered a “person” in the context of being a named payee for a negotiable instrument under UCC Article 3, which generally requires a specific, identifiable individual or entity. Wyoming Statute § 34.1-1-201(b)(27) defines “person” to include an estate. Therefore, the instrument is payable to a person. The critical aspect is whether it is payable “to order” or “to bearer.” Since the note is payable “to the estate of the late Arthur Finch” and does not contain words of negotiability like “to order” or “to bearer,” it is not a negotiable instrument under UCC Article 3. It is merely a contractual promise to pay. Such an instrument is not governed by Article 3 of the UCC, which deals with negotiable instruments. Therefore, the holder cannot enforce it as a holder in due course. The holder’s rights would be those of a holder of a simple contract. The question asks about the enforceability *as a holder in due course*. Because the instrument lacks words of negotiability, it is not a negotiable instrument, and thus, no one can be a holder in due course of it. The UCC defines a negotiable instrument in § 34.1-3-104(a) and requires it to be payable “to order or to bearer.” The note in question is payable to a specific estate, which is a person, but it does not contain the necessary magic words for negotiability.

Wyoming law, following the Uniform Commercial Code (UCC) Article 3, defines a negotiable instrument as an unconditional promise or order to pay a fixed amount of money, payable on demand or at a definite time, payable to order or to bearer, and containing no other promise or order, except as authorized by the UCC. The concept of “properly payable” is crucial for a bank’s duty to pay an instrument. A bank is generally obligated to pay an instrument if it is properly payable. However, a bank is not required to pay an instrument if it has received notice of a claim against it, or if the instrument is stale. A stale check is generally one that is presented for payment more than six months after its date. Wyoming Statute § 34.1-3-304(a)(i) states that an instrument is stale if it is presented for payment more than ten years after its date. However, the UCC commentary and common banking practice often refer to a six-month period as a practical guideline for when a check might be considered stale for the purposes of a bank’s duty to pay, as after this period, the bank may have reason to believe the holder of the instrument is no longer entitled to enforce it. For the purpose of determining a bank’s obligation to pay, the UCC provides that a bank may, but is not required to, pay a check that is presented more than six months after its date. The question asks about the bank’s *obligation* to pay. While a bank *may* pay a stale check, it is not *obligated* to do so. Therefore, the bank is not obligated to pay the check presented more than six months after its date.

The question concerns the liability of an accommodation party under UCC Article 3, as adopted in Wyoming. An accommodation party is one who signs an instrument to lend credit to another party to the instrument. Under Wyoming Statute § 34.1-3-419, an accommodation party is liable in the capacity in which they sign. This means if they sign as a maker, they are primarily liable; if they sign as an indorser, they are secondarily liable. In this scenario, Bartholomew signs the note in the space typically designated for a guarantor or surety, which, in the absence of specific indication otherwise, is treated as an indorsement under UCC § 3-419(c), now codified in Wyoming as § 34.1-3-419(c). Therefore, Bartholomew is secondarily liable. A holder can enforce the instrument against a secondary party only after the instrument has been dishonored and the secondary party has received notice of dishonor. The scenario states the note was presented for payment and dishonored, and that Bartholomew received notice of dishonor. Consequently, the holder can enforce the note against Bartholomew. The amount Bartholomew is liable for is the full amount of the note, as an accommodation party is liable for the full amount of the instrument, not a pro-rata share, unless otherwise agreed. Therefore, the holder can recover the full \$15,000 from Bartholomew.

The core issue here is determining whether the instrument qualifies as a negotiable instrument under UCC Article 3, as adopted in Wyoming. 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 inclusion of “subject to the terms and conditions of the Master Lease Agreement dated January 15, 2023” is a critical factor. Such a clause generally makes the promise to pay conditional, thereby destroying negotiability. The UCC specifies that a promise or order is unconditional unless it states an express condition to payment, or the instrument is subject to another writing in such a way that the promise or order is dependent on the terms of that other writing. Here, the reference to the Master Lease Agreement, which likely contains covenants, obligations, and potential remedies, directly links the payment of the instrument to the performance and terms of that separate agreement. This linkage renders the promise conditional, preventing the instrument from being a negotiable instrument under Wyoming’s adoption of UCC Article 3. Therefore, it cannot be treated as a negotiable instrument for purposes of holder in due course status or simplified transferability.

The core issue here is whether a holder in due course status can be maintained when a negotiable instrument is transferred in a manner that might constitute a bulk transaction outside the ordinary course of business, thereby raising questions about good faith and notice. Under UCC Article 3, a holder in due course (HDC) takes an instrument free from certain defenses, such as fraud in the inducement, but not from real defenses like forgery or material alteration. To qualify as an HDC, a holder must take the instrument for value, in good faith, and without notice that it is overdue or has been dishonored or that any person has a defense or claim against it. Wyoming, like other states, has adopted UCC Article 3, which governs negotiable instruments. The scenario describes a transfer of a large portfolio of overdue commercial paper from a failing bank in Montana to a new entity in Wyoming. While the new entity paid value for the instruments, the nature of the transaction—acquiring a significant volume of distressed debt—raises a strong inference of notice. Specifically, acquiring a substantial quantity of overdue instruments, especially when bundled with other non-performing assets, strongly suggests that the transferee had notice of potential claims or defenses against those instruments. This is because such a bulk purchase of overdue paper is not typical in the ordinary course of business and would likely prompt a prudent buyer to investigate the underlying validity and enforceability of the instruments. Therefore, the transferee’s knowledge of the overdue status and the context of the acquisition likely prevents them from meeting the “without notice” requirement for HDC status. The fact that the instruments were overdue at the time of transfer is a critical factor. While an instrument can still be negotiated after its due date, a holder taking it after its due date cannot be a holder in due course. The prompt states the instruments were overdue at the time of transfer. Therefore, the transferee cannot be a holder in due course.

The scenario involves a promissory note that contains a clause stating it is “subject to the terms of the collateral agreement dated June 15, 2023, between the maker and the payee.” Under UCC Article 3, a negotiable instrument must contain an unconditional promise or order to pay a fixed amount of money. 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 any other writing. While UCC § 3-104(a)(1) permits reference to another writing for rights concerning collateral, acceleration, or prepayment, it does not allow the instrument to be made subject to the terms of another writing in a way that impacts the unconditional nature of the promise to pay. The phrase “subject to the terms of the collateral agreement” generally indicates that the promise to pay is governed by, and potentially limited by, the terms of that separate agreement. This makes the promise conditional, thereby destroying negotiability. For instance, if the collateral agreement contained provisions that could alter the amount due or the timing of payment based on events outside the note itself, the note would not be negotiable. Wyoming follows the Uniform Commercial Code, and thus, this principle applies. The presence of this qualifying phrase means the instrument cannot be considered a negotiable instrument under UCC Article 3, as it introduces a conditionality to the payment obligation beyond permissible references.

The scenario involves a promissory note that is initially payable to a specific individual, “Elias Vance,” and is then endorsed in blank by Elias. A blank endorsement, under Wyoming Statute § 34.1-3-205, converts the instrument into bearer paper. Bearer paper is payable to whoever possesses it. Subsequently, “Maria Sanchez” writes a special endorsement on the note, making it payable to her. A special endorsement specifies the person to whom the instrument is payable. When bearer paper is specially endorsed, it becomes order paper, payable only to the person named in the special endorsement. Therefore, after Maria Sanchez’s special endorsement, the note is order paper payable to Maria Sanchez. If a thief then steals the note, the thief cannot become a holder in due course because they are not in possession of the note legitimately. To negotiate the note, Maria Sanchez would need to endorse it specially or in blank. Without a proper endorsement from Maria Sanchez, the thief cannot transfer the rights of a holder. The question asks about the legal status of the note’s transferability to a third party by the thief. Since the note is order paper payable to Maria Sanchez, a thief possessing it without her endorsement cannot negotiate it to a third party who would acquire rights as a holder, let alone a holder in due course. The thief’s possession does not confer any ability to transfer the instrument according to the UCC Article 3 provisions in Wyoming.

The scenario involves a promissory note that is payable to order but has been transferred by delivery without endorsement. Under Wyoming’s adoption of UCC Article 3, specifically focusing on the transfer and negotiation of negotiable instruments, an instrument payable to order requires endorsement for negotiation. Without endorsement, the transfer is merely an assignment. An assignee of an instrument that is not properly negotiated takes the instrument subject to all claims and defenses that could be asserted against the assignor, and also subject to any defenses or claims of the account debtor against the assignee that accrue after the account debtor receives notice of the assignment. In this case, the note was payable to “order” of Amelia, meaning it was an order instrument. Its transfer by mere delivery to Bartholomew, without Amelia’s endorsement, means Bartholomew did not become a holder in due course, even if he met the other requirements. Therefore, Bartholomew, as a mere assignee, is subject to any defenses that the maker, Chester, could raise against Amelia. Chester’s defense of fraud in the inducement, if proven, is a real defense that can be asserted against any holder, including an assignee who does not qualify as a holder in due course. Thus, Bartholomew cannot enforce the note against Chester if Chester can establish the fraud in the inducement defense.

The scenario describes a promissory note that contains a clause stating, “This note is subject to the terms and conditions of the Master Service Agreement dated January 15, 2023, between the maker and the payee.” Under UCC Article 3, specifically Wyoming Statute § 34.1-3-104(a)(i), a negotiable instrument must contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation, or power given by the maker or drawer except as authorized by this chapter. The inclusion of a reference to another agreement, which can impose additional obligations or conditions on the maker beyond the payment of money, renders the promise conditional. This means the instrument is not a negotiable instrument under Article 3. Wyoming Statute § 34.1-3-105(b) clarifies that a promise or order is conditional if it states that it is subject to or governed by another writing. Therefore, the note, as described, is not a negotiable instrument.

The scenario involves a negotiable instrument that was originally payable to an order. When a holder of such an instrument endorses it in blank, it becomes payable to bearer. Wyoming law, specifically through the Uniform Commercial Code (UCC) as adopted and potentially modified by the state legislature, governs negotiable instruments. UCC Article 3, Section 3-205 defines an endorsement in blank. An endorsement in blank specifies no particular endorsee and may consist of only a signature. Once an instrument is endorsed in blank, it is payable to bearer and may be negotiated by delivery alone. Therefore, when Elara signed the back of the promissory note without naming a specific recipient, she effectively converted it into a bearer instrument. Any subsequent holder, such as Mr. Henderson, can then negotiate the note by simply delivering it to another party. This is a fundamental principle of commercial paper, allowing for the efficient transfer of instruments. The key concept here is the transformation of an order instrument into a bearer instrument through a blank endorsement, which then dictates the method of negotiation. The question tests the understanding of how an endorsement in blank impacts the negotiability and transfer requirements of a commercial paper.

Under Wyoming law, as governed by UCC Article 3, a holder in due course (HOC) status is crucial for a party seeking to enforce a negotiable instrument free from most defenses. To achieve HOC status, a holder must take 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 against it. In this scenario, the initial transaction involved a loan from First National Bank of Cheyenne to Bighorn Outfitters. Bighorn Outfitters issued a promissory note to the bank. Subsequently, the bank endorsed the note “without recourse” and sold it to Prairie State Bank. The critical element here is whether Prairie State Bank had notice of any defense or claim against the note at the time it acquired it. The note itself contained a clause stating it was “subject to the terms of the accompanying loan agreement, which is incorporated herein by reference.” This incorporation by reference effectively puts any subsequent holder on notice of the terms and conditions of the loan agreement. If the loan agreement contained a clause that made the note’s enforceability contingent upon certain performance by Bighorn Outfitters, or if it revealed a potential defense, then Prairie State Bank would be deemed to have notice of that defense. The UCC defines “notice” broadly, including actual knowledge, receipt of a notice, or reason to know from all the facts and circumstances known to the person at the time. The presence of the incorporation clause means Prairie State Bank cannot claim it took the note without notice of any issues tied to the underlying loan agreement. Therefore, Prairie State Bank would not qualify as a holder in due course because it had notice of potential defenses arising from the incorporated loan agreement. The fact that the endorsement was “without recourse” is relevant to the liability of the endorser to the endorsee, but it does not confer HOC status on the endorsee. HOC status is determined by the holder’s conduct and knowledge at the time of acquisition, not by the nature of the endorsement.

Wyoming law, as reflected in UCC Article 3, defines a holder in due course (HDC) as a holder of a negotiable instrument who takes it subject to all claims to it or defenses against it of any party that originated the instrument, provided the holder took the instrument (1) for value, (2) in good faith, and (3) without notice that it is overdue or dishonored or that there is an uncured default that makes the instrument, or that it contains an unauthorized signature or has been altered. In this scenario, the promissory note was originally issued by Mr. Abernathy to Ms. Gable. Ms. Gable then negotiated the note to Mr. Harding. Mr. Harding received the note for value, as he provided a used snowmobile in exchange. The facts do not suggest Mr. Harding acted in bad faith or had notice of any defenses or claims Mr. Abernathy might have against Ms. Gable. Specifically, Mr. Harding had no knowledge of the alleged fraudulent misrepresentation by Ms. Gable concerning the value of the consulting services, which would constitute a defense to payment for Mr. Abernathy. Therefore, Mr. Harding qualifies as a holder in due course under Wyoming’s adoption of UCC Article 3. As an HDC, Mr. Harding takes the instrument free from all defenses of any party to the instrument with whom the holder has not dealt, except for real defenses. Fraud in the inducement, as alleged by Mr. Abernathy, is a personal defense and not a real defense. Consequently, Mr. Harding, as an HDC, can enforce the note against Mr. Abernathy despite the alleged fraud in the inducement. The correct answer is that Mr. Harding can enforce the note against Mr. Abernathy.

The scenario involves a promissory note that contains an acceleration clause. An acceleration clause allows the holder of the note to declare the entire unpaid balance immediately due and payable upon the occurrence of a specified event, such as a default in payment. In this case, the note states that the entire principal balance becomes due if the maker fails to pay any installment on or before its due date. Wyoming law, as reflected in UCC Article 3, generally permits such clauses as they do not render the note non-negotiable. The critical aspect is whether the acceleration is triggered by an event that makes the amount payable uncertain. However, an acceleration clause that makes the entire debt due upon a specific, objective event like non-payment of an installment does not introduce such uncertainty. The acceleration is a contractual remedy, not a change in the fundamental terms of payment that would destroy negotiability. Therefore, when the maker misses an installment payment, the holder can, by giving notice, accelerate the debt and demand the full remaining principal plus any accrued interest. The question asks about the holder’s rights upon such a default. The holder can indeed demand the entire unpaid principal.

Under Wyoming law, as governed by 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 a holder not in due course. To qualify as an HDC, a person must take the instrument (1) for value, (2) in good faith, and (3) without notice of any claim or defense against it. The concept of “value” is broad and includes performing or securing performance of an antecedent debt. “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing. “Without notice” means the holder did not know or have reason to know of the instrument’s infirmities. If a holder has notice of a defense, such as fraud in the inducement, they cannot be an HDC. In this scenario, the purchaser of the note had actual knowledge of the prior fraud committed by the payee. This knowledge directly violates the “without notice” requirement for HDC status. Therefore, the purchaser cannot claim HDC status and is subject to the defenses available against the original payee. The UCC specifies that a holder who takes an instrument with knowledge of a defense is not a holder in due course. Wyoming statutes align with this, ensuring that good faith and absence of notice are paramount for achieving HDC status, thereby protecting parties from instruments tainted by prior misconduct when they acquire them in a commercially reasonable and honest manner without any indication of such issues.

The core issue here revolves around the concept of a holder in due course (HDC) and the defenses available against such a holder. Under Wyoming law, which largely follows UCC Article 3, a person who takes an instrument for value, in good faith, and without notice of any defense or claim to the instrument is a holder in due course. A negotiable instrument taken by an HDC is subject to only a limited number of real defenses, which can be asserted against anyone, including an HDC. Personal defenses, on the other hand, are generally cut off by a holder in due course. In this scenario, the promissory note was made by Mr. Abernathy to Ms. Gable. Ms. Gable then negotiated the note to Mr. Henderson. Mr. Henderson paid $5,000 for a note with a face value of $10,000. He took it on March 15th, which is within a reasonable time after its issue (assuming it was issued recently), and there is no indication he paid less than face value in a way that would raise suspicion about good faith or value. The critical element is whether Mr. Henderson had notice of any defense. The question states that Mr. Henderson was aware of “rumors” of Mr. Abernathy’s financial difficulties and that Ms. Gable had promised to perform a service in exchange for the note. Rumors of financial difficulties, while potentially relevant to a holder’s good faith, are not necessarily notice of a specific defense or claim, especially if the rumors are vague. However, notice of the underlying breach of contract (Ms. Gable’s failure to perform the service) is a personal defense. If Mr. Henderson had actual knowledge of this breach or knowledge of facts and circumstances that would put a reasonable person on notice of the breach, he would not qualify as a holder in due course. The fact that he knew Ms. Gable had promised to perform a service, coupled with the substantial discount, raises a strong inference that he had reason to know of a potential failure of consideration or breach of contract. Wyoming Statute 34.1-3-302(a)(ii) defines a holder in due course as a holder that takes the instrument for value, in good faith, and without notice of any claim to the instrument or defense against it. Wyoming Statute 34.1-3-303 defines value. Wyoming Statute 34.1-3-304 defines notice of a fact that takes the form of a claim or defense. A person has notice of a fact if they have actual knowledge, receive notice, or have reason to know from all the facts and circumstances known to them at the time that the fact exists. Knowledge of a promise to render performance that has not been rendered and is not due does not, of itself, give notice of a defense. However, if Mr. Henderson knew that the service had not yet been performed and it was due, or if the circumstances strongly indicated a lack of good faith in taking the note without assurance of performance, he might not be a holder in due course. Given that Mr. Henderson knew about the promised service and the significant discount, a court would likely find that he had notice of a potential defense (failure of consideration or breach of contract). Therefore, he would not be a holder in due course and would take the note subject to Mr. Abernathy’s personal defenses. The personal defense of breach of contract or failure of consideration would be available to Mr. Abernathy against Mr. Henderson.

The question concerns the rights of a holder in due course (HDC) when presented with a negotiable instrument that has a material alteration. Under Wyoming’s adoption of UCC Article 3, specifically Wyo. Stat. Ann. § 34.1-3-407, a holder in due course can enforce the instrument according to its original tenor if the alteration is not material. However, if the alteration is material and the HDC took the instrument with knowledge of the alteration, they cannot enforce it. A material alteration is defined as one that changes the contract of any party in any respect, including changing the number or relationship of the parties, completing a blank, or otherwise modifying the instrument in a way that affects the obligation on the instrument. In this scenario, the change from “pay to the order of” to “pay to Elias Thorne” is a material alteration because it changes the payee, thereby altering the contract of the drawer and any endorsers. Since the alteration occurred after issuance and was material, and the HDC (Ms. Albright) took the instrument with knowledge of this alteration, her ability to enforce the instrument is limited. She can only enforce it according to its original tenor, which means she can only recover the amount of the original debt, not the altered amount. The original tenor was for $5,000. Therefore, Ms. Albright can enforce the instrument for $5,000.

The core issue here revolves around the concept of a holder in due course (HDC) and the defenses available against such a holder. Under UCC Article 3, specifically as adopted in Wyoming, a holder in due course takes an instrument free from most defenses that are available to the parties on the instrument, with certain exceptions. These exceptions include real defenses, which can be asserted even against an HDC. Forgery and material alteration are classic examples of real defenses. A forged signature is wholly inoperative, meaning it does not transfer rights to the instrument. Similarly, a material alteration, if made by the holder, can discharge an obligor. In this scenario, the signature of the drawer, Mr. Abernathy, was forged by Ms. Gable. This forgery constitutes a real defense for Mr. Abernathy against any holder, including an HDC. Therefore, Mr. Abernathy is not obligated to pay the note to Ms. Gable, even if she were to qualify as an HDC. The UCC’s policy is to protect drawers from unauthorized signatures, and this protection is paramount, overriding the usual benefits of HDC status. The fact that the note was transferred to Mr. Davies, who might otherwise be considered an HDC, does not cure the initial defect of the forged drawer’s signature. Wyoming law, consistent with the UCC, prioritizes the integrity of signatures.

Under Wyoming law, as governed by UCC Article 3, a holder in due course (HDC) takes an instrument free from most defenses and claims that a prior party might assert against the original payee. To qualify as an HDC, a holder must take the instrument for value, in good faith, and without notice that it is overdue or dishonored, or that it contains any unauthorized signature or alteration, or that any defense or claim exists against it. Wyoming Statute § 34.1-3-302 defines these requirements. The scenario describes a promissory note that was originally issued for a loan to purchase livestock in Montana. The note was later transferred to a third party, Ms. Albright. Ms. Albright received the note as payment for a pre-existing debt owed to her by the original payee. Taking an instrument for a pre-existing debt generally constitutes taking for value under UCC § 34.1-3-303(a)(iii), which is satisfied if value has been given for the right to enforce the instrument. The critical factor here is whether Ms. Albright had notice of any defenses. The question states that Ms. Albright had no knowledge of any issues with the note, the livestock purchase agreement, or any defenses the maker might have. Therefore, she meets the requirements of good faith and lack of notice. Since she took the note for value, in good faith, and without notice of any defenses, she qualifies as a holder in due course. As an HDC, she is subject only to those defenses that are real defenses, such as infancy, duress, illegality of a type that nullifies the obligation, or fraud in the factum, as enumerated in UCC § 34.1-3-305(a)(ii). A breach of warranty in the underlying contract, such as a warranty concerning the livestock, is generally a personal defense and is cut off by an HDC. Therefore, Ms. Albright can enforce the note against the maker, notwithstanding any breach of warranty in the original livestock purchase agreement.

The scenario involves a promissory note that is payable to an order and has been transferred by endorsement. The critical issue is whether the transferee, a bank in Nevada, qualifies as a holder in due course (HDC) under Wyoming’s Uniform Commercial Code (UCC) Article 3, specifically Wyoming Statutes Chapter 34.1-3. For a transferee to be an HDC, they 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 against it. In this case, the bank took the note as collateral for a pre-existing debt owed by the original payee. Under Wyoming UCC § 34.1-303(a)(2), taking an instrument as security for a pre-existing claim constitutes taking for value. The bank’s knowledge of the original payee’s financial difficulties, coupled with the fact that the note was already past its due date when transferred, is crucial. Wyoming UCC § 34.1-304(b) states that a person has notice of a claim or defense if the person has knowledge of the claim or defense or has received notice of the claim or defense or from all the facts and circumstances known to the person at the time in question, has reason to know that a claim or defense exists. Since the note was past due, the bank had notice of a potential claim or defense, specifically that the maker might have grounds to refuse payment to the original payee due to the payee’s financial distress, which the bank was aware of. Therefore, the bank cannot be a holder in due course. The maker of the note can assert any defenses that would be available against the original payee. This includes the defense of failure of consideration, as the original payee did not provide the promised goods. Because the bank is not an HDC, it takes the note subject to this defense. The bank’s recourse would be against the original payee for the debt, not against the maker of the note, as the maker has a valid defense.

The core issue here revolves around the concept of a holder in due course (HDC) and the defenses that can be asserted against such a holder. Under UCC Article 3, as adopted in Wyoming, a person who takes an instrument for value, in good faith, and without notice of any claim or defense to the instrument is a holder in due course. Once established, an HDC takes the instrument free from most “personal” defenses, such as breach of contract or lack of consideration. However, certain “real” defenses, like fraud in the execution or material alteration, can be asserted even against an HDC. In this scenario, the promissory note was issued by Mr. Abernathy to Ms. Gable. Ms. Gable then negotiated the note to Mr. Harding. Mr. Harding took the note for value (he paid $9,500 for a $10,000 note), and there is no indication he took it in bad faith or with notice of any issues. Therefore, Mr. Harding likely qualifies as a holder in due course. The defense Mr. Abernathy wishes to raise is that Ms. Gable failed to deliver the promised vintage Wyoming saddle, which was the sole consideration for the note. This failure of consideration is a personal defense. Personal defenses are generally cut off when the instrument is negotiated to a holder in due course. Therefore, Mr. Harding, as a likely HDC, can enforce the note against Mr. Abernathy despite the lack of consideration, provided he can prove his HDC status. The UCC specifies that a holder in due course takes the instrument free of claims to it on the part of any person and defenses of any party to the instrument with whom the holder has not dealt, except for those defenses that can be asserted against a holder in due course. Failure of consideration is a personal defense that cannot be asserted against an HDC.

The scenario involves a negotiable instrument, specifically a promissory note, that is transferred. The core issue is whether the transferee, a bank in Montana, qualifies as a holder in due course (HDC) under Wyoming’s UCC Article 3. To be an HDC, the transferee must take the instrument (1) for value, (2) in good faith, and (3) without notice of any defense or claim against it. In this case, the note was transferred for a book value of $50,000, which is less than its face value of $75,000. However, the UCC defines “value” broadly. For a bank taking an instrument for deposit, value is given to the extent of the credit given. Here, the bank gave credit for the full $50,000, thus satisfying the “for value” requirement. Regarding “good faith,” Wyoming’s UCC § 3-302(a)(2) defines good faith as “honesty in fact and the observance of reasonable commercial standards of fair dealing.” The question states the bank had no knowledge of any defenses or claims. The fact that the note was past due does not automatically negate good faith if the bank had no notice of any specific defenses or claims. The discount from face value, while substantial, is not inherently evidence of bad faith or notice of a defense, especially if it reflects market conditions or risk assessment. The critical element is the bank’s knowledge of the underlying dispute between the original parties. The question states the bank was aware of the dispute between Mr. Abernathy and Ms. Croft regarding the quality of the goods. This knowledge constitutes notice of a defense or claim. Therefore, the bank cannot be a holder in due course because it had notice of a defense against payment. Wyoming Statute § 34.1-3-302(a)(2) states that a holder in due course takes the instrument free of claims to it or defenses against it, but only if the holder took the instrument (i) for value, (ii) in good faith, and (iii) without notice of any claim to the instrument or defense against it. Since the bank had notice of the dispute, it fails the third requirement. The final answer is that the bank is not a holder in due course.

The scenario involves a promissory note that is transferred by indorsement. The initial holder, a rancher from Cheyenne, Wyoming, indorses the note in blank and then negotiates it to a cattle buyer from Nebraska. Subsequently, the cattle buyer, before maturity, sells the note to a bank in Colorado. The question centers on whether the bank can qualify as a holder in due course (HDC) under UCC Article 3, as adopted in Wyoming. For a holder to be an HDC, they must take the instrument (1) for value, (2) in good faith, and (3) without notice that it is overdue or has been dishonored or that there is a defense or claim against it. In this case, the bank takes the note for value by purchasing it. Assuming the bank acted in good faith and had no notice of any defenses or claims, it would generally qualify as an HDC. The fact that the indorsement was initially in blank is significant. UCC Section 3-205 states that an instrument payable to an identified person that is indorsed in blank becomes payable to bearer and may be negotiated by delivery alone until specially indorsed. Therefore, the cattle buyer’s blank indorsement made the note payable to bearer. When the bank purchased the note, it took it by delivery, which is a valid negotiation for an instrument payable to bearer. The bank’s status as a holder in due course is not affected by the fact that the note was previously transferred by a blank indorsement and then by a special indorsement (implied by the sale to the bank, assuming the bank took it with proper documentation or the cattle buyer’s indorsement was sufficient). The crucial element is that the bank acquired the instrument for value, in good faith, and without notice of any defects. The sequence of transfers and the blank indorsement do not preclude the bank from becoming an HDC.

The core issue here is whether a subsequent holder of a note, who received it after its maturity date, can still enforce it against the maker, even if the maker has a valid defense against the original payee. Under Wyoming’s adoption of UCC Article 3, specifically focusing on the rights of a holder in due course (HDC), a transferee who takes an instrument after its maturity date generally cannot qualify as an HDC. Wyoming Statute § 34.1-3-302 defines an HDC as a holder who takes the instrument for value, in good faith, and without notice that it is overdue or that it has been dishonored or of any defense or claim against it. Taking an instrument after its maturity date constitutes notice that the instrument is overdue. Therefore, a holder who receives the note after its maturity date takes it subject to any defenses that were available to the maker against the original payee. In this scenario, the maker, Mr. Abernathy, has a valid defense of failure of consideration against the original payee, Ms. Barlow. Since Ms. Vance acquired the note after its maturity date, she is not an HDC and therefore takes the note subject to Mr. Abernathy’s defense. Consequently, Ms. Vance cannot enforce the note against Mr. Abernathy.

The core issue revolves around the concept of a holder in due course (HDC) and the defenses available against payment. Under Wyoming law, as reflected in UCC Article 3, a person takes an instrument for value and in good faith, and without notice of any claim or defense. When an instrument is negotiated, the transferee receives whatever rights the transferor had. If the transferor was an HDC, the transferee generally takes free of most personal defenses. In this scenario, the original note was for $10,000. The maker, Mr. Abernathy, had a personal defense (failure of consideration) against the original payee, Ms. Gable. Ms. Gable then negotiated the note to Mr. Harrison. For Mr. Harrison to be an HDC, he must have taken the note for value, in good faith, and without notice of Mr. Abernathy’s defense. Assuming Mr. Harrison meets these criteria, he would take the note free of Mr. Abernathy’s personal defense. However, the question states that Mr. Harrison received the note as a gift. Taking an instrument as a gift means the transferee did not give value. Therefore, Mr. Harrison is not a holder in due course. Since he is not an HDC, he takes the instrument subject to all defenses and claims that were available against Ms. Gable, including Mr. Abernathy’s defense of failure of consideration. Consequently, Mr. Abernathy can assert this defense against Mr. Harrison, and Mr. Abernathy is not obligated to pay the note.

The scenario involves a promissory note with a specific maturity date. Wyoming, like other states, adheres to UCC Article 3 regarding negotiable instruments. A key concept is the negotiability of an instrument. 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. In this case, the note is payable on a specific date, which constitutes a “definite time.” The question hinges on whether the acceleration clause, which allows the holder to demand payment earlier than the stated maturity date upon the occurrence of a specified event (default on a separate loan), renders the note non-negotiable. Under UCC § 3-108(b)(2), an instrument that provides for acceleration on the happening of an event does not prevent it from being payable at a definite time. This means the presence of such an acceleration clause does not destroy the negotiability of the note. Therefore, the note remains a negotiable instrument despite the acceleration provision. The legal principle at play is that the possibility of earlier payment due to an event of default does not alter the fundamental certainty of payment at the stated maturity date, or at the accelerated date if the event occurs. The UCC’s intent is to facilitate commerce by allowing flexibility in payment terms while maintaining the core characteristics of negotiability.

Under Wyoming law, which largely follows the Uniform Commercial Code (UCC) Article 3, a holder in due course (HDC) takes an instrument free from most defenses and claims that are not apparent on the face of the instrument. To qualify as an HDC, 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 a defense or claim against it. In this scenario, the initial transaction between Clara and Brent involved a promissory note for $5,000. Clara then negotiated this note to Anya. Anya’s knowledge of the underlying dispute between Clara and Brent is crucial. If Anya had actual knowledge or reason to know of Brent’s defense (that Clara failed to deliver the antique telescope), she would not be a holder in due course. Wyoming UCC § 3-302(a)(1) states that a holder takes an instrument for value. Wyoming UCC § 3-302(a)(2) requires good faith. Wyoming UCC § 3-302(a)(3) requires that the holder take without notice of any defense or claim. The question hinges on whether Anya’s receipt of the note from Clara, who admitted to a dispute with Brent regarding the telescope, constitutes notice. If Anya was aware of the circumstances surrounding the note’s creation, particularly Brent’s claim that Clara breached her contractual obligation to deliver the telescope, then Anya cannot be a holder in due course. Her good faith would be called into question if she deliberately ignored such information or had a reasonable opportunity to discover the defect but failed to do so. Since Anya was informed of Clara’s admission about the dispute, she had notice of a defense against payment, preventing her from achieving HDC status. Therefore, Brent can assert his defense against Anya.

The core issue revolves around the holder’s right to enforce a negotiable instrument when the instrument itself is lost or stolen. Under Wyoming’s Uniform Commercial Code (UCC) Article 3, specifically § 3-309, a person not in possession of an instrument is entitled to enforce it if they were entitled to enforce it when the person was dispossessed, and the person is entitled to enforce the instrument under subsection (a) of § 3-309. Subsection (a) requires that the person lost possession of the instrument, the loss was not due to transfer or lawful seizure, and the person cannot obtain possession of the instrument because it was destroyed, its whereabouts cannot be determined, or it is in the possession of an unknown person or a person that cannot be found or made to deliver it. Crucially, the person seeking to enforce the lost instrument must also be able to prove the terms of the instrument and the right to enforce it. If the instrument was payable to bearer, possession establishes the right to enforce. If it was payable to a specific person, that person must prove their identity as the payee and their entitlement to enforce. In this scenario, the promissory note was payable to the order of Elias Thorne. Elias Thorne was the rightful owner and holder until the note was lost. He cannot obtain possession of the note. To enforce it, he must prove the terms of the note and that he was the person to whom it was payable, which he can do through other evidence. Therefore, Elias Thorne can enforce the lost promissory note.

The core issue here is whether a holder in due course (HDC) status can be maintained when the instrument is subject to a defense that can be asserted against a holder in due course. Under Wyoming’s adoption of UCC Article 3, certain defenses are considered “real defenses” and can be asserted against even an HDC. These include defenses such as infancy, duress, illegality of the type that nullifies the obligation, and fraud in the factum. Fraud in the factum occurs when a party is induced to sign an instrument without knowledge or reasonable opportunity to learn of its character or essential terms. This is distinct from fraud in the inducement, where a party knows the nature of the instrument but is deceived about collateral matters. In the scenario presented, the purported maker, Ms. Albright, was led to believe she was signing a rental agreement, not a promissory note. She had no knowledge of the true nature of the document she signed. This constitutes fraud in the factum, a real defense. Therefore, even if Mr. Sterling were a holder in due course, he would not be able to enforce the note against Ms. Albright because this real defense is effective against him. The calculation is conceptual: Real Defense (Fraud in the Factum) > Holder in Due Course status.