Clint induces David, by fraud in the inducement, to make an instrument payable to the order of Clint. Clint then negotiates the instrument to Eric, a holder in due course, and later reacquires it from Eric. In this case:
A) Clint is a holder in due course.
B) Clint is not a holder in due course, but he succeeds to the rights of one, because of the shelter rule.
C) Clint does not succeed to Eric's rights as a holder in due course and remains subject to the defense of fraud.
D) because fraud in the inducement is a real defense, it can be used against both Clint and Eric.
C
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