Also known as: holders · holder in due course
Written by attorneys — see sources below.
A person who has legal possession or control of a negotiable instrument, document, privilege, servitude, power, lien, or other property interest and is entitled to enforce or exercise the associated rights.
Hugo Hart defaulted on payments secured by a mortgage on his home. Helix Biotech, which held the promissory note after assignment, filed a foreclosure action. The court recognized Helix Biotech as the proper plaintiff because it was the holder of the note and joined Hugo Hart as the mortgagor to ensure the proceeding could extinguish all interests.
Hannah Hughes inadvertently produced privileged emails during discovery in a contract dispute. Hudson Partners, as holder of the attorney-client privilege, had implemented screening protocols before production. The court found no waiver because the holder had taken reasonable steps to prevent disclosure.
Hammer Construction held an easement across Harper Hill's land for a utility line. Harper Hill, as holder of the servient estate, had no duty to repair the line because the beneficiary controlled the improvement. When joint use arose, both parties shared maintenance costs proportionally.
Hiroshi Hasegawa created a power of appointment in his will naming his daughter as donee. The daughter, as power holder, could appoint the property to permissible objects listed in the instrument. Upon her exercise of the power, title passed directly to the appointees without further action by the estate.
Hana Huang's law firm accidentally sent a privileged memo to opposing counsel. As holder of the privilege, Hana Huang immediately notified the recipient and demanded return of the document under Rule 26(b)(5)(B). The court held the prompt action preserved the protection against waiver.
Holly Hayes and her spouse owned property as tenants by the entirety. The IRS assessed a tax lien against Holly Hayes individually. The government, as holder of the lien, could reach only her survivorship interest and could not force sale of the entire property without joining her spouse.
In 1988, the Internal Revenue Service assessed $482,446 in unpaid income tax liabilities against Don Craft for his failure to file federal income tax returns for the years 1979 through 1986. At that time, Don Craft and his wife, respondent Sandra L. Craft, owned a piece of real property in Grand Rapids, Michigan, as tenants by the entirety. After notice of the federal tax lien was filed, the Crafts jointly executed a quitclaim deed purporting to transfer Don Craft's interest in the property to Sandra Craft for one dollar. When Sandra Craft later attempted to sell the property, a title search revealed the lien. The IRS agreed to release the lien to allow the sale on the condition that half of the net proceeds be held in escrow pending determination of the Government's interest. Sandra Craft then brought an action in the United States District Court for the Western District of Michigan to quiet title to the escrowed proceeds. The District Court granted summary judgment to the Government. On appeal, the United States Court of Appeals for the Sixth Circuit held that the tax lien did not attach to the property under Michigan law and remanded for consideration of the Government's fraudulent conveyance claim. On remand, the District Court found that the conveyance itself was not fraudulent but that the use of nonexempt funds to pay the mortgage constituted a fraudulent act, and it awarded the IRS a share of the proceeds. The Sixth Circuit affirmed that determination on the lien issue as law of the case. The Supreme Court granted certiorari to consider whether Don Craft had a separate interest in the entireties property to which the federal tax lien attached.
View caseThe mortgagee or the person in possession of the note after proper negotiation is the holder. That status allows the holder to initiate foreclosure and join the mortgagor and junior lienholders as necessary parties. Failure to join required parties can impair the sale's validity under state statutes.
The holder must have taken reasonable preventive measures before disclosure and must act promptly to rectify the error, including following Rule 26(b)(5)(B) when applicable. These actions prevent the disclosure from operating as a waiver in federal or state proceedings.
The holder of the servient estate generally has no affirmative duty to repair or maintain the servient estate or improvements used by the easement beneficiary. Joint use of improvements creates a contribution obligation for reasonable repair costs among all users.
…on his part to be done, or commits waste, his right to redeem from said sale shall terminate 30 days after such default and holders of subsequent liens may redeem in the order and manner now provided by law beginning 30 days after the filing of notice of such default with the clerk of such District Court, and his right…