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: 1962 Code SECTION 10.3-306; 1966 (54) 2716; 2008 Act No. 204, SECTION 2, eff July 1, 2008.