Nebraska Uniform Commercial Code 3-306

UCC 3-306

3-306.

Claims to an instrument.

A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim to rescind a negotiation and to recover the instrument or its proceeds. A person having rights of a holder in due course takes free of the claim to the instrument.

Source

  • Laws 1991, LB 161, § 36.

Annotations

  • COMMENT

  • This section expands on the reference to "claims to" the instrument mentioned in former sections 3-305 and 3-306. Claims covered by the section include not only claims to ownership but also any other claim of a property or possessory right. It includes the claim to a lien or the claim of a person in rightful possession of an instrument who was wrongfully deprived of possession. Also included is a claim based on section 3-202(b) for rescission of a negotiation of the instrument by the claimant. Claims to an instrument under section 3-306 are different from claims in recoupment referred to in section 3-305(a)(3).