During an audit of Trent Realty Corp.'s financial statements, Clark, CPA, reviewed the following instrument:
$300,000 Belle, MD
September 15, 20X1
For value received, ten years after date, I promise to pay to the
order of Dart Finance Co. Three Hundred Thousand and 00/100 dollars
with interest at 9% per annum compounded annually until fully paid.
This instrument arises out of the sale of land located in MD.
It is further agreed that:
1. Maker will pay all costs of collection including reasonable
attorney fees.
2. Maker may prepay the amount outstanding on any anniversary date
of this instrument.
(SIGNED) G. Evans
On March 15, 20X2, Dart indorsed the instrument in blank and sold it to Morton for $275,000. On July 10, 20X2, Evans informed Morton that Dart had fraudulently induced Evans into signing the instrument. On August 15, 20X2, Trent, which knew of Evans' claim against Dart, purchased the instrument from Morton for $50,000.
Morton is considered a:
A.
holder.
B.
holder in due course.
C.
holder with rights of a holder in due course under the Shelter Provision.
D.
not a holder.
.
