16-3. Requirements for HDC Status. Pamela Haas, an employee of Trail Leasing, Inc., had access to her employers blank checks. Over a period of about two and a half years, Haas used the firms checks to fraudulently obtain cash from the firms bank, Drovers First American Bank. She carried out her scheme by writing checks payable to Drovers First, having the checks signed by an authorized officer of Trail Leasing, and then taking the checks to the bank. There she would fill out a change order forma form used by bank customers to specify the coins and bill denominations in which they wished to take cash for business operationsand pocket the cash that she received. By the time the scheme was discovered (through a discrepancy in one of the change orders), Haas had negotiated fifty-five checks for a total of nearly $40,000. Trail Leasing sued the bank to recover the funds paid to Haas without its authorization, and the issue turned on whether the bank was a holder in due course of the checks delivered to it by Haas. Specifically, the issue was whether the bank had taken the checks for value. Trail Leasing argued that because the bank essentially paid Haas from Trail Leasings funds (by debiting Trail Leasings bank account), the bank had not given value for the instruments and therefore could not be an HDC. Will the court concur in this argument? Discuss. [Trail Leasing, Inc. v. Drovers First American Bank, 447 N.W.2d 190 (Minn. 1989)]

164. Transfer of Instruments. In July 1988, Chester Crow executed a promissory note payable to the order of THE FIRST NATIONAL BANK OF SHREVEPORT or BEARER in the amount of $21,578.42 at an interest rate of 3 percent per year above the prime rate in effect at The First National Bank of Shreveport in Shreveport, Louisiana, until paid. The note was a standard preprinted promissory note. In 1999, Credit Recoveries, Inc., filed a suit in a Louisiana state court against Crow, alleging that he owed $7,222.57 on the note, plus interest. Crow responded that the debt represented by the note had been canceled by the bank in September 1994, contending that, in any event, to collect on the note Credit Recoveries had to prove its legitimate ownership of it. When no evidence of ownership was forthcoming, Crow filed a motion to dismiss the suit. Is the note an order instrument or a bearer instrument? How might it have been transferred to Credit Recoveries? With this in mind, should the court dismiss the suit on the basis of Crows contention? [Credit Recoveries, Inc. v. Crow, 862 So.2d 1146 (La.App. 2 Cir. 2003)]

16-5. Requirements for HDC Status. Stacey Dillabough presented two money orders for payment to Chuckie Enterprises, Inc., a check-cashing service in Philadelphia. Dillabough was known as a previous customer, the orders were presented within thirty days of the date on them, and there was nothing to indicate that they were not valid. Chuckie obtained photo identification from Dillabough, cashed the orders, and submitted them to the issuer, American Express, for payment. American Express recognized the orders as stolen and refused to pay. Chuckie assigned its right to payment to Robert Triffin, who filed a suit against American Express to collect. One of the issues was whether Chuckie was a holder in due course. One of the requirements of HDC status is good faith. Did Chuckie take the money orders in good faith? Discuss. [Triffin v. Dillabough, 552 Pa. 550, 716 A.2d 605 (1998)]