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: L. 94: Entire article R&RE, p. 857, § 1, effective January 1, 1995.
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).
Structure Colorado Code
Title 4 - Uniform Commercial Code
Article 3 - Negotiable Instruments
Part 3 - Enforcement of Instruments
§ 4-3-301. Person Entitled to Enforce Instrument
§ 4-3-302. Holder in Due Course
§ 4-3-303. Value and Consideration
§ 4-3-305. Defenses and Claims in Recoupment
§ 4-3-306. Claims to an Instrument
§ 4-3-307. Notice of Breach of Fiduciary Duty
§ 4-3-308. Proof of Signatures and Status as Holder in Due Course
§ 4-3-309. Enforcement of Lost, Destroyed, or Stolen Instrument
§ 4-3-310. Effect of Instrument on Obligation for Which Taken
§ 4-3-311. Accord and Satisfaction by Use of Instrument
§ 4-3-312. Lost, Destroyed, or Stolen Cashier's Check, Teller's Check, or Certified Check