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: 1978 Comp., § 55-3-306, enacted by Laws 1992, ch. 114, § 119.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
This section expands on the reference to "claims to" the instrument mentioned in former Sections 3-305 [55-3-305 NMSA 1978] and 3-306 [55-3-306 NMSA 1978]. 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) [55-3-202 NMSA 1978] or 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). The rule of this section is similar to the rule of Article 30(2) of the Convention on International Bills of Exchange and International Promissory Notes.
Repeals. — Laws 1992, ch. 114, § 237 repealed former 55-3-306 NMSA 1978, as enacted by Laws 1961, ch. 96, § 3-306, relating to rights of one not holder in due course, effective July 1, 1992. Laws 1992, ch. 114, § 119, enacted a new section, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com.
Structure New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 3 - Negotiable Instruments
Part 3 - ENFORCEMENT OF INSTRUMENTS
Section 55-3-301 - Person entitled to enforce instrument.
Section 55-3-302 - Holder in due course.
Section 55-3-303 - Value and consideration.
Section 55-3-304 - Overdue instrument.
Section 55-3-305 - Defenses and claims in recoupment.
Section 55-3-306 - Claims to an instrument.
Section 55-3-307 - Notice of breach of fiduciary duty.
Section 55-3-308 - Proof of signatures and status as holder in due course.
Section 55-3-309 - Enforcement of lost, destroyed, or stolen instrument.
Section 55-3-310 - Effect of instrument on obligation for which taken.
Section 55-3-311 - Accord and satisfaction by use of instrument.
Section 55-3-312 - Lost, destroyed or stolen cashier's check, teller's check or certified check.