2. Requirements for HDC Status.

FACTS: Dennis Bowling was a friend and neighbor of David Dabney. Bowling had no indication thatDabney was financially troubled. Indeed, by all evidence, Dabney was quite well off: he owned four grocery stores; he drove a Cadillac; his wife owned a new sports car; he had race horses and lived in an expensive home. In the fall of 1983, Dabney admitted to Bowling that he had cash flow problems and borrowed $40,000 from Bowling. At the same time, Dabney proposed they become partners in his grocery business, and discussions concerning this prospect ensued over the following weeks. At one point, Dabney asked Bowling for a signed blank check that would be deposited with a new grocery supplier as security and would never be used without Bowlings consent. If it was, Dabney promised, he would reimburse Bowlings account appropriately. Shortly thereafter, Dabney dated and filled out Bowlings blank check for $10,606.79 and gave the check to his major supplier and creditor, E. Bierhaus& Sons. Dabney owed Bierhaus more than $400,000 for past deliveries; and after having received ten to twenty bad checks from Dabney, Bierhaus required cash or cashiers checks from Dabney for any deliveries. Dabney had told Bierhaus about the supposedly imminent partnership with Bowling, and under those circumstances, Bierhauss agent accepted the $10,606.79 check from Bowling in payment for a delivery of groceries. Bowlings check was returned to Bierhaus, as there were insufficient funds in Bowlings account to cover it. By this time, Dabney had filed for bankruptcy protection. Bierhaus sought to collect the amount of the check from Bowling.

ISSUE: Is Bierhaus a holder in due course?

RULE/RESOLUTION: [E. Bierhaus & Sons v. Bowling, 486 N.E.2d 598 (Ind.App. 1 Dist. 1985)] How did the court answer the questions? What did the court decide?

EXPLANATION/APPLICATION-Do you agree with the court? Why or why not? Can you change any facts to give a different result?