(a) Subject to subsection (b), an instrument is paid to the extent payment is made by or on behalf of a party obliged to pay the instrument (1) to a person entitled to enforce the instrument or (2) to the assignor in the case of a mortgage debt that is assigned without sufficient notice to the party obliged to pay as provided in section 49-10. To the extent of the payment, the obligation of the party obliged to pay the instrument is discharged even though payment is made with knowledge of a claim to the instrument under section 42a-3-306 by another person.
(b) The obligation of a party to pay the instrument is not discharged under subsection (a) if: (1) A claim to the instrument under section 42a-3-306 is enforceable against the party receiving payment and (i) payment is made with knowledge by the payor that payment is prohibited by injunction or similar process of a court of competent jurisdiction, or (ii) in the case of an instrument other than a cashier's check, teller's check, or certified check, the party making payment accepted, from the person having a claim to the instrument, indemnity against loss resulting from refusal to pay the person entitled to enforce the instrument; or (2) the person making payment knows that the instrument is a stolen instrument and pays a person it knows is in wrongful possession of the instrument.
(1959, P.A. 133, S. 3-602; P.A. 91-304, S. 64; P.A. 98-147, S. 2.)
History: P.A. 91-304 entirely replaced former provisions re effect of discharge against a holder in due course with provisions re payment, a restatement of Sec. 42a-3-603(1), revised to 1991; P.A. 98-147 added Subsec. (a)(2) permitting payment to assignor of mortgage debt assigned without sufficient notice to party obliged to pay as provided in Sec. 49-10.
See Sec. 42a-3-601(b) for successor provisions to Sec. 42a-3-602, revised to 1991, re effect of discharge against holder in due course.
Structure Connecticut General Statutes
Title 42a - Uniform Commercial Code
Article 3 - Negotiable Instruments
Section 42a-3-101. - Short title: Uniform Commercial Code–Negotiable Instruments.
Section 42a-3-102. - Subject matter.
Section 42a-3-103. - Definitions.
Section 42a-3-104. - Negotiable instrument.
Section 42a-3-105. - Issue of instrument.
Section 42a-3-106. - Unconditional promise or order.
Section 42a-3-107. - Instrument payable in foreign money.
Section 42a-3-108. - Payable on demand or at definite time.
Section 42a-3-109. - Payable to bearer or to order.
Section 42a-3-110. - Identification of person to whom instrument is payable.
Section 42a-3-111. - Place of payment.
Section 42a-3-112. - Interest.
Section 42a-3-113. - Date of instrument.
Section 42a-3-114. - Contradictory terms of instrument.
Section 42a-3-115. - Incomplete instrument.
Section 42a-3-116. - Joint and several liability. Contribution.
Section 42a-3-117. - Other agreements affecting instrument.
Section 42a-3-118. - Statute of limitations.
Section 42a-3-119. - Notice of right to defend action.
Section 42a-3-201. - Negotiation.
Section 42a-3-202. - Negotiation subject to rescission.
Section 42a-3-203. - Transfer of an instrument. Rights acquired by transfer.
Section 42a-3-204. - Endorsement.
Section 42a-3-205. - Special endorsement. Blank endorsement. Anomalous endorsement.
Section 42a-3-206. - Restrictive endorsement.
Section 42a-3-207. - Reacquisition.
Section 42a-3-208. - Reacquisition.
Section 42a-3-301. - Person entitled to enforce instrument.
Section 42a-3-302. - Holder in due course.
Section 42a-3-303. - Value and consideration.
Section 42a-3-304. - Overdue instrument.
Section 42a-3-305. - Defenses and claims in recoupment.
Section 42a-3-306. - Claims to an instrument.
Section 42a-3-307. - Notice of breach of fiduciary duty.
Section 42a-3-308. - Proof of signatures and status as holder in due course.
Section 42a-3-309. - Enforcement of lost, destroyed or stolen instrument.
Section 42a-3-310. - Effect of instrument on obligation for which taken.
Section 42a-3-311. - Accord and satisfaction by use of instrument.
Section 42a-3-401. - Signature.
Section 42a-3-402. - Signature by representative.
Section 42a-3-403. - Unauthorized signature.
Section 42a-3-404. - Impostors. Fictitious payees.
Section 42a-3-405. - Employer's responsibility for fraudulent endorsement by employee.
Section 42a-3-406. - Negligence contributing to forged signature or alteration of instrument.
Section 42a-3-407. - Alteration.
Section 42a-3-408. - Drawee not liable on unaccepted draft.
Section 42a-3-409. - Acceptance of draft. Certified check.
Section 42a-3-410. - Acceptance varying draft.
Section 42a-3-411. - Refusal to pay cashier's checks, teller's checks and certified checks.
Section 42a-3-412. - Obligation of issuer of note or cashier's check.
Section 42a-3-413. - Obligation of acceptor.
Section 42a-3-414. - Obligation of drawer.
Section 42a-3-415. - Obligation of endorser.
Section 42a-3-416. - Transfer warranties.
Section 42a-3-417. - Presentment warranties.
Section 42a-3-418. - Payment or acceptance by mistake.
Section 42a-3-419. - Instruments signed for accommodation.
Section 42a-3-420. - Conversion of instrument.
Section 42a-3-501. - Presentment.
Section 42a-3-502. - Dishonor.
Section 42a-3-503. - Notice of dishonor.
Section 42a-3-504. - Excused presentment and notice of dishonor.
Section 42a-3-505. - Evidence of dishonor.
Section 42a-3-601. - Discharge and effect of discharge.
Section 42a-3-603. - Tender of payment.
Section 42a-3-604. - Discharge by cancellation or renunciation.
Section 42a-3-605. - Discharge of endorsers and accommodation parties.
Section 42a-3-606. - Impairment of recourse or of collateral.
Section 42a-3-701. - Letter of advice of international sight draft.