Section 40 Discharge

LibraryCommercial Law 2007

The obligation of a party required to pay an instrument is discharged to the extent of any payment by or on behalf of a party obligated to pay to a person entitled to enforce the instrument. Section 400.3-602(a), RSMo 2000; Madison-Hunnewell Bank v. Hurt, 903 S.W.2d 175 (Mo. App. E.D. 1995). The obligation of a party to pay an instrument is not discharged if:

  • the person making payment knows the instrument is stolen and pays a person it knows is in wrongful possession of the instrument; or
  • a claim to the instrument under § 400.3-306, RSMo 2000, is enforceable against the person receiving payment and

( payment is made with knowledge by the payor that payment is prohibited by...

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