bona fide holder for value

a bona fide holder of a negotiable instrument, for a valuable consideration, without any notice of facts which impeach its validity, as between the antecedent parties, if he takes it under an indorsement made before the same becomes due, holds the title unaffected by these facts, and may recover thereon, although, as between the antecedent parties, the transaction may be without any legal validity.

The Negotiable Instruments Act provides, § 52: A holder in due course is a holder who has taken the instrument under the following conditions: 1. That it is complete and regular upon its face; 2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; 3. That he took it in good faith and for value; 4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Where an instrument payable on demand is negotiated an unreasonable length of time If he has had notice of any infirmity in the instrument or defect in the title of the person he took it from before he had paid the full amount agreed to be paid, he is a holder in due course only to the amount theretofore paid by him. The title of a person who negotiates an instrument is defective when he obtained it, or any signature to it, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud. To constitute notice of an infirmity, etc., the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith. In the hands of any holder other than a holder in due course, a negotiable instrument is subject to the same defenses as if it were non-negotiable; but a holder who derives his title through a holder in due course and is not himself party to any fraud or illegality affecting the instrument, has all the rights of such former holder in respect of all parties prior to the latter. Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument is defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course; but this does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title. See Negotiable Instruments for the States, etc., in which it is enacted.