403.306 of another person, but the other person’s claim to the instrument may be asserted by the obligor if the other person is joined in the action and personally asserts the claim against the person entitled to enforce the instrument. An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument. (4) In an action to enforce the obligation of an accommodation party to pay an instrument, the accommodation party may assert against the person entitled to enforce the instrument any defense or claim in recoupment under sub. (1) that the accommodated party could assert against the person entitled to enforce the instrument, except the defenses of discharge in insolvency proceedings, infancy and lack of legal capacity. History: 1995 a. 449. Extending immediate credit on a deposited check was not contrary to reasonable
May 22, 2026, are designated by NOTES. (Published 5-22-26)
403.305
Updated 23-24 Wis. Stats.
UCC — NEGOTIABLE INSTRUMENTS
commercial standards of fair dealing when the account owner had always deposited funds to cover previous overdrafts when alerted to the problem and the bank had no reason to suspect there would be a problem if immediate credit was extended. Consequently, the bank was a holder in due course who had the right to recover its losses from the check’s issuer who had stopped payment. Mid Wisconsin Bank v. Forsgard Trading, Inc., 2003 WI App 186, 266 Wis. 2d 685, 668 N.W.2d 830, 03-0123.
403.306 Claims to an instrument. 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. History: 1995 a. 449.