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.
Ala. Code § 7-3-306
Claims to an Instrument.
Known as the Uniform Commercial Code
The act spans §§ 7–7 (703 sections).
(Acts 1965, No. 549, p. 811; repealed by Acts 1995, No. 95-668, p. 1381, §1; added by Acts 1995, No. 95-668, p. 1381, §1.)
Official source: Alabama Legislature (ALISON). Reproduced from public-domain Alabama statutes; confirm against the official source for the current text. Not legal advice.