Checks were crossed checks and specially indorsed for deposit to payee’s account only, E.T. Henry. The checks were further indorsed to Atrium Management for valuable consideration. Payment was denied because of “payment stopped”.
Whether or not Atrium Management is a holder in due course.
From the beginning, Atrium was aware of the fact that the checks were all for deposit only to payee’s account, meaning E.T. Henry. Clearly, then, Atrium could not be considered a holder in due course. However, it does not follow as a legal proposition that simply because petitioner Atrium was not a holder in due course for having taken the instruments in question with notice that the same was for deposit only to the account of payee E.T. Henry that it was altogether precluded from recovering on the instrument.