Question: Two smooth talking salesmen for Rich Plan of New Orleans called

Two smooth-talking salesmen for Rich Plan of New Orleans called on Leona and George Henne at their home. They sold the Hennes a home food plan. One of the salesmen suggested that the Hennes sign a blank promissory note. The Hennes refused. The salesman then wrote in ink "$100" as the amount and "4" as the number of installments in which the note was to be paid, and the Hennes signed the note. Several days later, the Hennes received a payment book from Nationwide Acceptance. The payment book showed that a total of $843.37 was due payable in 36 monthly installments. Rich Plan had erased the "$100" and "4" on the note and typed in the figures "$843.37" and "36." The erasures were cleverly done but were visible to the naked eye. Rich Plan then negotiated the Hennes' note to Nationwide Acceptance. The Hennes refused to pay the note. Nationwide claimed that it was a holder in due course and was entitled to receive payment. Was Nationwide Acceptance a holder in due course?

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  • CreatedJuly 16, 2014
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