Please review 'holder in due course'
- Please review the attached document.Comments below. I was going through
some e mails and came across this. Was it ever answered? could someone
give some input ?
----- Original Message -----
Sent: Saturday, March 19, 2005 10:44 PM
Subject: [tips_and_tricks] Summary Judgement
I just recently went through a Federal Case that is similar in content
as your dilemma. Mine was under the fair debt collections act over a
vehicle that supposedly one company purchased the contract but, could
not supply a document of sale or a contract of sale. Now whether it was
the Complaint and summons and reference cases I wrote or the corruptness
of the Judge and Magistrate, the case was dismissed, and my question
regarding whether they were a holder of a contract in due course or a
collection agency was never answered.
I do know that there are many supreme court cases references that state
if they can not produce the original signed contract then they are not
the holders in due course and there is no contract to enforce.
*** Did the debt collector allegedly purchase the contract as a
defaulted contract? If so, I don't believe they can be a "holder in due
course" as this has the advantage to the purchaser of receiving the
contract free of any defects or claims by the other party, except for
fraud in the original contract. This is why banks sell many loans as
quickly as possible. If there are those who believe that banks sell the
loans just to get the cash up front, then I ask those people to explain
why those same banks purchase loans from others and have to wait for
*** A purchaser of a defaulted debt can be a "holder" but not a "holder
in due course". Many times the alleged purchaser has no documentation
showing they purchased the debt but, one of the things I have seen
happen when a motion to dismiss has been filed is that the judge waits
untill the purchaser can get the seller to send an affidavit of
purchase. In one case the judge didn't rule on the motion to dismiss for
5 months while the purchaser got the affidavit and then denied the motion.
Through the requested input of Legal Bear, I will now switch to State
Court and ask for a declaratory judgement as to just what are these
people, a collection agency or a holder in due course. It will be
interesting to see since I had request to view these documents in a
registered letter and have never been shown any evidence that they have
a contract that shows the sell of my contract with another firm. As
other case references show you are only liable for what sums of money
the new creditor had paid for your contract.
*** If you can cite these cases where the new creditor can only collect
what he paid for the account I would appreciate it. I have heard a
number of people say this but have never seen any law or case cites to
back it up and I haven't had any luck while searching for them. Somehow,
I doubt they exist or those who are fighting the debt collectors would
have long ago made those cases very public.
Some where in the back of my mind is an alarm bell going off that says
you have the right to first purchase of your contract prior to an offer
being made to someone else. I know this is true since I had a boat burn
down to the deck and was offered first right to salvage and buy out on
reduce contract. I can not tell you the case sites that would tell you
these things you will have to go out and do your research.
Good **** and keep us posted as to your progress, I for one would be
interested to see what unfolds.
The case I mentioned was not mine personally, it was one I was helping
on for some months after meeting the people involed through a group like
this. I haven't heard anything for a long while now. I'll try to contact
them and see what has happened.
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- Here is the definition and conditions for being a "holder in due course"
from the UCC. Pay special attention to section (c). This can be found at
§ 3-302. HOLDER IN DUE COURSE.
a.. (a) Subject to subsection (c) and Section 3-106(d), "holder in due
course" means the holder of an instrument if:
a.. (1) the instrument when issued or negotiated to the holder does not
bear such apparent evidence of forgery or alteration or is not otherwise so
irregular or incomplete as to call into question its authenticity; and
b.. (2) the holder took the instrument (i) for value, (ii) in good
faith, (iii) without notice that the instrument is overdue or has been
dishonored or that there is an uncured default with respect to payment of
another instrument issued as part of the same series, (iv) without notice
that the instrument contains an unauthorized signature or has been altered,
(v) without notice of any claim to the instrument described in Section
3-306, and (vi) without notice that any party has a defense or claim in
recoupment described in Section 3-305(a).
b.. (b) Notice of discharge of a party, other than discharge in an
insolvency proceeding, is not notice of a defense under subsection (a), but
discharge is effective against a person who became a holder in due course
with notice of the discharge. Public filing or recording of a document does
not of itself constitute notice of a defense, claim in recoupment, or claim
to the instrument.
c.. (c) Except to the extent a transferor or predecessor in interest has
rights as a holder in due course, a person does not acquire rights of a
holder in due course of an instrument taken (i) by legal process or by
purchase in an execution, bankruptcy, or creditor's sale or similar
proceeding, (ii) by purchase as part of a bulk transaction not in ordinary
course of business of the transferor, or (iii) as the successor in interest
to an estate or other organization.
d.. (d) If, under Section 3-303(a)(1), the promise of performance that is
the consideration for an instrument has been partially performed, the holder
may assert rights as a holder in due course of the instrument only to the
fraction of the amount payable under the instrument equal to the value of
the partial performance divided by the value of the promised performance.
e.. (e) If (i) the person entitled to enforce an instrument has only a
security interest in the instrument and (ii) the person obliged to pay the
instrument has a defense, claim in recoupment, or claim to the instrument
that may be asserted against the person who granted the security interest,
the person entitled to enforce the instrument may assert rights as a holder
in due course only to an amount payable under the instrument which, at the
time of enforcement of the instrument, does not exceed the amount of the
unpaid obligation secured.
f.. (f) To be effective, notice must be received at a time and in a manner
that gives a reasonable opportunity to act on it.
g.. (g) This section is subject to any law limiting status as a holder in
due course in particular classes of transactions.
----- Original Message -----
From: "Doug" <rudi2396@...>
Sent: Tuesday, January 09, 2007 11:53 AM
Subject: [tips_and_tricks] Please review 'holder in due course'
> Please review the attached document.Comments below. I was going through
> some e mails and came across this. Was it ever answered? could someone
> give some input ?
I never did hear anything back on my email except for you currently. I
have not pursued this any further. The vehicle was stolen, and recovered.
Improperly handled by the Police Station and Tow Truck Company so, I sued
them in District of Adams Count Court. I lost this case due to my
inexperience in court at the time but, it was a close one as the judge said,
after he re-wrote all of my 27 jury instructions under COCOA (Colorado Organized Crime Control Act; state civil RICO), muddy the
jury's minds and then confused them. The jury was out for 5 1/2 hours.
When the judge re-wrote the jury instructions he left out the two parts of
the CRS law that would convict the Defendants of Motor Vehicle Thief. With
out a doubt everyone in the court was convinced that the vehicle was mine
however, the judge told the jury they had to rule based upon the jury
instructions not what they felt was right. It was an Eye opening experience
since I had never been in a court battle before, however I learned a
tremendous amount about how the procedures worked and exactly what I should
of been doing and not doing etc. And the judge complimented me on how well
I was prepared for trail and all the politeness and professional behavior.
His last comments were he had district Attorneys who did not do as well as I
had done. So butter the bum Pro Se and alter the case jury instruction and
give it to the old boys club. It will never happen again now that I know
what to do.
I have a business to run and it was either file an appeal and loose my
company or attend to my company and let the case go. When I went down to
pick up the jury instruction books after the case ended the judges paralegal
told me the judge wanted to know if I was going to file an appeal, and she
told me the judge was very impressed with how I handle myself and the case.
It was a busy 3 day court case. Started out battling with three defendant
attorneys, two of which represented the city and police department and the
other represented the tow truck company.
In short the tow truck company attorney offered me the vehicle free of any
other charges after the case except for the tow fee which I tried to pay in
the first place. They asked for attorneys fee's and the judge told them
flat out no. So the vehicle is gone I did not want it, it require a new
transmission and I had already purchase two other vehicles, so I let it go.
If the Debt collector from the Federal Case wants it let him go get it.
Something I could use on the Fed case and take to the Denver District, that
came out in the District case on the vehicle thief, was that the original
lender could not be located and was presumed out of business, the state
Secretary's office and DMV shown a lien on file with the original lenders as
the lien holder not the supposed purchaser of the contract. To answer
your question the loan was not in default at the time of supposed purchase
of the contract. In fact the company I leased the vehicle to when sent a
bill from the new supposed purchaser, had paid several monthly payments
before I found out about the change and sent off the fair debt collections
questionnaire, in which it was never answered.
In short Gary the court systems are so overloaded they rubber stamp most
cases out of Federal Court on dismissed to have to file an appeal which most
don't, do to the cost so, it lowers the case files they have to deal with
yearly. And then there is the corruption inside that is just a bag of
garbage with these people. It cost a lot of money either way you go to
fight these people. I spent enough money on the District Court case that I
could of purchased two new vehicles, but it was fun and interesting to learn
exactly how our court systems work in this country.
I still have my goldwing which was a part of this loan that had been paid
off but the lien has never been removed from the secretary of states files
since it is in the original lenders name and they can not be found. I
originally pulled out the loan to help build my credit which that backfired
so, I paid cash for my new truck and lexa.
I doubt I will proceed further with any of this since I learned what I
originally wanted to find out and I would rather focus my attention on the
corporations I am running, money in not money out is my motto.
Thank you for responding to my email
- Do not, for an instant, neglect to determine what is
being used as evidence to enable a person to make the
claim of holder in due course.
For example, is a copy of an agreement or note being
used as the evidence, AKA hearsay evidence, which you
should learn how to properly rebut.
Just like knowing how to demand the proper oath prior
to proceeding, demand the proper evidence of substance
over the evidence of form so often used.
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