Weast v. Arnold

RODOWSKY, Judge.

This is a suit against the makers of promissory notes which the payee pledged as collateral for a loan. The delinquent balance on that loan has been paid by the pledgor’s surety who thereby acquired the notes and who now sues on them. Contrary to the trial court’s conclusion we shall hold that the plaintiff enjoys holder in due course status, as transferee of the lender’s rights in the notes, but only to the extent of the lender’s security interest in the notes. The excess of the plaintiff’s claim is subject to a breach of contract defense on which the defending makers proved…