Quality and capabilities of certain machinery

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Carter fraudulently misrepresented the quality and capabilities of certain machinery he sold to Dobbins. Carter obtained a check for $2,000, the amount agreed upon, at the time he made delivery. The machinery proved to be virtually worthless. Dobbins promptly stopped payment on the check. Carter negotiated the check to Marvel in satisfaction of a prior loan of $600 and received $1,400 in cash. Marvel, who had accepted the check in good faith, presented the check for payment which was refused by Dobbins' bank. Which of the following is correct?

a. Even if Marvel is a holder in due course, Dobbins has a real defense.

b. Marvel is not a holder in due course, this defense can be used against him.

c. Marvel will be able to collect the full amount from Dobbins.

d. Dobbins' timely stop order eliminates his liability on the check.

Reference no: EM131096688

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