In the promissory note scenario, who is the present holder in due course after the endorsements?

• A. M
• B. P
• C. A
• D. B

Answer: (D)

A holder in due course takes a negotiable instrument for value, in good faith, and without notice of any defenses or claims against it. Endorsements create a transfer chain, and each transfer passes title only if it’s given for value, in good faith, and without knowledge of defenses. In this scenario, the note moves from M to P, then from P to A, and finally from A to B. If every step was for value and in good faith, and none of the transferees had notice of defenses, the last indorsee—the person who now holds the instrument from the final endorsement—becomes the present holder in due course and can enforce payment against the maker despite many defenses that might have existed between earlier holders. Therefore, the present holder in due course is the final indorsee, B.