Goldrich obtained a note from Curtis by fraudulent means. He negotiated the note to Haywood, a holder in due course, who, in turn, transferred the noted to Madson. Madson knew of the misrepresentations under which Goldrich had received the note from Curtis. When the note became due, Curtis refused to pay it, claiming that Madson was not a holder in due course because he had full knowledge of the fraud. Madson contended that he received the note from Haywood, a holder in due course, and was, therefore, entitled to the note.

a) Fully discuss both Madson’s and Curtis’s positions in relation to the note.

b) Suppose that Madson transfers the note back to Goldrich. Discuss Curtis’s and Goldrich’s positions.