Question: On June 30, John signed a demand promissory note for $2,000 to the Camelot Country Club. The note stated that it was being given in

On June 30, John signed a demand promissory note for $2,000 to the Camelot Country Club. The note stated that it was being given in payment for a membership in the country club, but in fact, the club was insolvent, its memberships had no value, and John was already a member. He was also the club’s golf pro. John signed the note at the request of the club’s manager to enable the club to borrow money from the National Bank. The Bank of Dallas purchased the note on July 14 and immediately made demand. John alleged the note was overdue, and therefore the bank could not be a holder in due course. Do you agree? What is the moral of this story?

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