Billy,a Minor,buys a Car Form Ajax Auto Dealers,signing a $2,000

question 30

Multiple Choice

Billy,a minor,buys a car form Ajax Auto Dealers,signing a $2,000 negotiable installment note in payment.Ajax needs the cash,so it sells the note to Acme Finance Company,for its fair market value,indorsing the note in blank.The owner of Acme,who personally purchased the note,knew that Billy was a minor.Circumstances occur such that Acme can collect the note only if it is a holder in due course.Is Acme a holder in due course with respect to this note?

• A) Yes; Acme is a holder in due course.
• B) No,because the note was not properly negotiated to Acme.
• C) No,because Acme did not take the note in good faith.
• D) No,because Acme took the note with notice that there was a defense to its payment.
• E) No; Acme is not a holder in due course because of some other reason.