Page:United States Statutes at Large Volume 77.djvu/712

 680

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

PART 3—RIGHTS OF A HOLDER § 28:3—301. Rights of a holder The holder of an instrument whether or not he is the owner may transfer or negotiate it and, except as otherwise provided in section 28:3—603 on payment or satisfaction, discharge it or enforce payment in his own name. § 28:3—502. Holder in due course (1) A holder in due course is a holder who takes the instrument (a) for value; and (b) in good faith; aaid (c) without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person. (2) A payee may be a holder in due course. (3) A holder does not become a holder in due course of an instrument: (a) by purchase of it at judicial sale or by taking it under legal process; or (b) by acquiring it in taking over an estate; or (c) by purchasing it as part of a bulk transaction not in regular course of business of the transferor. (4) A purchaser of a limited interest can be a holder in due course only to the extent of the interest purchased. § 28:3—303. Taking for value A holder takes the instrument for value (a) to the extent that the agreed consideration has been performed or that he acquires a security interest in or a lien on the instrument otherwise than by legal process; or (b) when he takes the instrument in payment of or as security for an antecedent claim against any person whether or not the claim is due; or (c) when he gives a negotiable instrument for it or makes an irrevocable commitment to a third person. § 28:3—304. Notice to purchaser (1) The purchaser has notice of a claim or defense if (a) the instrument is so incomplete, bears such visible evidence of forgery or alteration, or is otherwise so irregular as to call into question its validity, terms or ownership or to create an ambiguity as to the party to pay; or (b) the purchaser has notice that the obligation of any party is voidable in whole or in part, or that all parties have been discharged. (2) The purchaser has notice of a claim against the instrument when he has knowledge that a fiduciary has negotiated the instrument in payment of or as security for his own debt or in any transaction for his own benefit or otherwise in breach of duty. (3) The purchaser has notice that an instrument is overdue if he has reason to know (a) that any part of the principal amount is overdue or that there is an uncured default in payment of another instrument of the same series; or (b) that acceleration of the instrument has been made; or (c) that he is taking a demand instrmnent after demand has been made or more than a reasonable length of time after its issue. A reasonable time for a check drawn and payable within the states and territories of the United States and the District is presumed to be thirty days.

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