Commercial Code section 3306

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.

Source: Section 3306, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=COM§ionNum=3306.­ (updated Jan. 1, 1993; accessed Jun. 25, 2025).

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Verified:
Jun. 25, 2025

§ 3306's source at ca​.gov