Taking for Value Betty Ellis and her then husband W.G. Ellis executed and delivered to the Standard Finance Company (Standard) a promissory note in the amount of $2,800. After receiving the note, Standard issued a check to the couple for $2,800. The check was made payable to W.G. Ellis and Betty Ellis. The check was cashed after both parties indorsed it. Shortly thereafter, the Ellises were divorced. Mrs. Ellis claims that (1) she never saw or used the money and (2) Standard understood that all the money went to her ex-husband. W.G. Ellis was declared bankrupt. When the note became due four years later, Betty Ellis refused to pay it. Standard sued her, seeking payment as a holder in due course. She claimed that Standard was not a holder in due course in regard to her because she never received consideration for the note and, therefore, Standard did not take the note for value. Who wins? Standard Finance Company, Ltd. v. Ellis, 3 Haw. App. 614, 657 P.2d 1056, Web 1983 Haw. App. Lexis 83 (Intermediate Court of Appeals of Hawaii)
(Cheeseman 390)
Cheeseman, Henry R. Business Law, Vital Source for DeVry University, 8th Edition. Pearson Learning Solutions, 02/2013. Vital Book file.