Section 27 Significance of Holder in Due Course Status

• Library: Commercial Law 2007

A holder in due course takes an instrument free from all claims of any party and from most defenses of a person with whom the holder in due course has not dealt. Section 400.3-305, RSMo 2000. A person having the rights of a holder in due course takes free of all claims to ownership and all claims of a property or possessory right in the instrument or its proceeds, including claims to a lien or claims to rescind a negotiation under § 400.3-202(b), RSMo 2000, and to recover the instrument or its proceeds. Mo. Ann. Stat. § 400.3-306 cmt. (Westlaw through 2006 legislation); Dalton & Marberry, P.C. v. NationsBank, N.A., 982 S.W.2d 231 (Mo. banc 1998). A person’s status as holder in due course is also an affirmative defense to the common law claims of money had and received and unjust enrichment. Watson Coatings, Inc. v. Am. Exp. Travel Related Servs., Inc., 436 F.3d 1036 (8^th Cir. 2006).

The right of a holder in due course to enforce the obligation of a party to pay the instrument is not subject to:

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