B is corrent. When a check is completed through the negligence of the drawer, the defense created on the instrument is the personal defense of unauthorized completion, not the real defense of material alteration. Since Bay was negligent to send an incomplete check to Ore, the personal defense created was unauthorized completion. Cam, as a holder in due course (HDC) who took the check for executed value and without knowledge of the unauthorized completion, can defeat the personal defense and receive the full $50,000 from Bay.
A is incorrect. When a check is completed through the negligence of the drawer, the defense created on the instrument is the personal defense of unauthorized completion, not the real defense of material alteration. Since Bay was negligent to send an incomplete check to Ore, the personal defense created was unauthorized completion. Cam, as a holder in due course (HDC) who took the check for executed value and without knowledge of the unauthorized completion, can defeat the personal defense and receive the full $50,000 from Bay.
A is incorrect. When a check is completed through the negligence of the drawer, the defense created on the instrument is the personal defense of unauthorized completion, not the real defense of material alteration. Since Bay was negligent to send an incomplete check to Ore, the personal defense created was unauthorized completion. Cam, as a holder in due course (HDC) who took the check for executed value and without knowledge of the unauthorized completion, can defeat the personal defense and receive the full $50,000 from Bay.
D is incorrect. Cam gave value for the check acquired from Ore in the form of payment of an antecedent debt. Payment of an antecedent debt qualifies as executed value when determining HDC status.
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