Printable Format84-3-306. 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.
History: L. 1991, ch. 296, § 32; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official text. It is derived from the former 84-3-306(a). Historical case and statutory references may be obtained from the 1965 or 1983 bound Volume 7 of the Kansas Statutes Annotated.
This section states another right of the holder in due course, freedom from any other person's claim to the instrument. The most common example would be theft of bearer paper and a later negotiation to a holder in due course. The theft victim cannot successfully reclaim the instrument from a holder in due course.
Revisor's Note:
Former section 84-3-306 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.
CASE ANNOTATIONS
1. Whether RTC as mortgagee's receiver qualified as hold in due course under federal common law examined. Resolution Trust Corp. v. Davies, 824 F. Supp. 1002, 1013 (1993).