Jones v. Approved Bancredit Corp.

HERRMANN, Justice:

The dispositive question in this appeal is whether the plaintiff finance company is a holder in due course of the defendant’s note. We hold that the finance company was not a holder in due course under the party-to-the-transaction rule.

I

The relevant facts are undisputed for present purposes:

The defendant, Myrtle V. Jones, owned a lot of land in Delaware and wished to have a house built on it. She responded to a newspaper advertisement by Albee Dell Homes, Inc. (hereinafter “Dell”), a sales agency for pre-cut homes in Elkton, Maryland. After selecting a type of house from…