Hypo: Mary borrowed some money from her friend, Betty, and issued a promissory note to Betty for $1000. The note was dated July 1, 2009 and was due on January 1, 2010. On December 20, 2009, Mary mailed a check to Betty for the full amount of the loan plus interest. On an enclosed car, Mary asked that the note be returned, "Whenever Betty could get to it." Betty spent the proceeds of the check, and on Christmas Day, negotiated Mary's note to Edgar, in payment for obligations owed to him. On January 1, 2010, Edgar demanded payment from Mary. Did Mary's payment to Betty discharge her on the note, even if Edgar is an HDC?
1. No. Discharge by payment is a personal defense. Not affected if note gets into hands of HDC.
2. Lesson: get the note back and stamp it.