Opinion ID: 707618
Heading Depth: 2
Heading Rank: 3

Heading: holder in due course protections

Text: 24 Boatmen's has not pointed to any specific provision of FIRREA which confers holder in due course status on the FDIC. Accordingly, the holder in due course issue must be decided under state law. 25 Under Missouri law, a holder in due course takes an instrument free from all personal or ordinary defenses of any party to the instrument with whom the holder has not dealt. Mo.Ann.Stat. Sec. 400.3-305 (Vernon 1994) and comments; see generally White & Summers, Uniform Commercial Code Sec. 14-9, at 731. Lack of consideration is a personal defense which a debtor cannot assert against a holder in due course. Mo.Ann.Stat. Sec. 400.3-305 (Vernon 1994); Kreutz v. Wolff, 560 S.W.2d 271, 276 (Mo.App.1977). 26 In order for the holder of a note to be a holder in due course, the note must be a negotiable instrument. Centerre Bank of Branson v. Campbell, 744 S.W.2d 490, 495 (Mo.App.1988) (citing Illinois State Bank v. Yates, 678 S.W.2d 819, 823-24 (Mo.App.1984)). In Centerre, the Missouri Court of Appeals held that the use of a variable interest rate prevents a note from being a negotiable instrument. Id. at 498. The Note here in question employs a variable interest rate. 9 Although Missouri changed its laws in 1992 to include instruments with variable interest rates as negotiable instruments, 10 the Note here in question was executed in 1991. Thus the Note is not a negotiable instrument and, by its acquisition of the Note, Boatmen's does not become a holder in due course under Missouri law.