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.

See Sec. 42a-3-305(a)(2) for successor provisions to Sec. 42a-3-306(b), revised to 1991, re defenses available in an action on a simple contract.

See Secs. 42a-3-105(b), 42a-3-303(b) and 42a-3-305(a)(2) for successor provisions to Sec. 42a-3-306(c), revised to 1991, re defenses of want or failure of consideration, nonperformance of any condition precedent, nondelivery or delivery for a special purpose.

See Sec. 42a-3-305(c) for successor provisions to Sec. 42a-3-306(d), revised to 1991, re defense that the instrument was acquired by theft.

(1959, P.A. 133, S. 3-306; P.A. 91-304, S. 32.)

History: P.A. 91-304 revised former Subdiv. (a) re the claims to an instrument which a person not having the rights of a holder in due course is subject to and deleted former Subdivs. (b), (c) and (d) re the defenses which a person not having the rights of a holder in due course is subject to.