Article 3 of the Uniform Commercial Code accords valuable privileges both to the holder in due course and to the surety who signs his principal's note. When the holder in due course sues the surety on the note, however, a conflict inevitably arises between these two typically innocent parties. The conflict is most acute when the surety attempts to assert a real defense of his principal against the holder in due course. In this article, Professor Wladis explores the reasons for favoring one party or the other in the context of various real defenses. The balance of policy considerations, according to Professor Wladis, weighs in favor of the holder in due course. Thus, Professor Wladis concludes that the surety should prevail only in a few situations when he can assert his own, rather than the principal's, real defense.