BILLS AND NOTES--HOLDER IN DUE COURSE-PURCHASING INSTALLMENT AFTER MATURITY

Three installment notes were pledged to the plaintiffs by the payee as security. At the time plaintiffs took the notes, the first installment of each was overdue and unpaid. In an action by plaintiffs against the makers, the latter pleaded in defense failure of consideration and fraud on the part of the payee. Held, plaintiffs were not holders in due course and consequently took the notes subject to the defense of the makers.

Bliss v. California Co-op. Producers, (Cal. 1946) 172 P. (2d) 62.