Question

Jim signed and delivered a note for $9,000 to Peter in exchange for Peter's tractor. Peter transferred the note to Kathy, who promised to pay $7,500 for it. After Kathy had paid Peter $5,000 of the promised $7,500, Kathy learned that Jim had a defense: the tractor was defective. if Kathy had paid Peter $7,500 and then learned of Jim’s defense, how much could she collect from Jim? $9000 or $7500 and why? please explain ( this is HDC case) does HDC get the Face value of the note or what he paid for?

Answer 1