A bill of exchange was drawn by John, a precious stone supplier in India, on Tom who is a diamond wholesaler carrying on business in Hong Kong, for the supply of diamonds by John to Tom. The bill was accepted by Tom with Richard as payee. Richard provided full consideration to John for the bill but the bill was later dishonoured by Tom.

REQUIRED:

1. Was Richard a holder for value or a holder in due course? Explain.(12 marks)
2. Was Richard a holder for value or a holder in due course? Explain.(12 marks)

(Notes: It means that John is the seller and Tom is the buyer. John asks Tom to pay money to Richard.)