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The bona fide holder is not affected by any issues between antecedent
parties. Pre-existing debt does constitute a valuable consideration
applicable to negotiable instruments. J. Story uses policy to state the
1. It is for the benefit and convenience of the commercial world to
give as wide an extent as practicable to the credit and circulation of
negotiable paper . . . in payment of, and as security for, pre-existing
a. This will allow creditors to secure their debts and safely
offer prolonged credit.
b. To use the NY rule would "strike a fatal blow at all discounts
of negotiable securities for pre-existing debts."