Multiple Choice
Landscaping company Phyllrox Co. purchased a forklift from Brown's Equipment Co. Phyllrox made a down payment in cash and signed a promissory note for $7,500. For $7,200 Brown's sold the note to Corporate Bank, who took it in good faith without notice of any problems with it. After Phyllrox used the forklift for two weeks, it broke down and could not be repaired. Phyllrox refuses to make any more payments to Corporate Bank. In this case:
A) Phyllrox can assert the failure of the forklift as a defense to making payments to Corporate Bank.
B) Corporate Bank is a holder in due course.
C) Both of these are correct.
D) Neither answer is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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