In each of the following fact patterns, is Holmes an HDC? Why or why not?

1. Andrews shows Holmes a check for $7,000 made out to Andrews and signed by Jackson. Holmes notices that the

“7” on the check is smudged and that the word “Seven” on the line where the amount has been written also appears smudged and in a different color ink than other parts of the check. Andrews convinces Holmes to cash the check for him. Later, Jackson’s bank refuses to honor the check and Holmes asserts HDC status.

2. Andrews issues a check in the amount of $50,000 payable to O’Connor to pay a debt he owes her. O’Connor negotiates the check to her nephew Holmes as a gift to help him buy a house.

3. Andrews sells a first edition copy of The Old Man and the Sea, signed by Ernest Hemingway, to O’Connor for

$100,000. However, the book’s first edition imprint is fraudulent, and Hemingway’s signature is forged—all perpetrated solely by Andrews. Andrews negotiates O’Connor’s check to Holmes in payment of a debt owed by Andrews to Holmes. The check appears as follows:

4. Andrews issues a $5,000 promissory note to O’Connor that is due and payable by Andrews on September 1. O’Connor negotiates this note to Holmes on October 1 for cash.

Transcribed Image Text:

Pay to the Order of Front of Check O'Connor One Liberty Place Greentown, Pennsylvania Andrews One Hundred Thousand and 00/100 MegaBank of Greentown Memo: Sale of OMTS First Edition :987654321: 00123456: 1004 50-70/220 January 5, 2019 $100,000.00 1004 O'Connor Dollars Back of Check Pay to the Order of Holmes Andrew's Do Not Write, Stamp, or Sign Below This Line. Reserved for Financial Institution Use