(a) A person not in possession of an instrument is entitled to enforce the instrument if: (i) the person seeking to enforce the instrument: (A) was entitled to enforce it when loss of possession occurred, or (B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when the loss of possession occurred; and (ii) the loss of possession was not the result of a transfer by the person or a lawful seizure; and (iii) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 7-3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.
(Acts 1995, No. 95-668, p. 1381, §1; Act 2009-758, p. 2292, §1.)
Notes of Decisions
Atl. Nat. Trust, LLC v. McNamee, 984 So. 2d 375 (Ala. 2007).
· cites it 13× “Atlantic National Trust, LLC, contends that, because § 7-3-309 is silent with regard to the assignability of the right to enforce a lost, destroyed, or stolen promissory note, other provisions of Alabama's version of the Uniform Commercial Code determine whether such a right is…”
In re: Arnold John Allen, Jr. & Kimberly Faith Allen, 472 B.R. 559 (9th Cir. BAP 2012).
· cites it 2× “Applying this law in the context of a lost, destroyed, or stolen promissory note, if the assignor of a promissory note was entitled, when the assignor owned the note, to enforce the note under Ala.Code § 7-3-309, the assignee of the promissory note steps into the assignor’s…”
Seven Oaks Enter., L.P. v. DeVito, 198 A.3d 88 (Conn. App. Ct. 2018).
“has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred .”
Douglas v. Troy Bank & Trust Co., 122 So. 3d 181 (Ala. Civ. App. 2012).
· cites it 2× “Ala.Code 1975, § 7-3-309(a) (UCC provision applicable to negotiable instruments setting forth circumstances under which a person is entitled to enforce such an instrument despite lacking possession of it).”
Thomas v. Wells Fargo Bank, N.A., 116 So. 3d 226 (Ala. Civ. App. 2012).
“Code 1975, a “[pjerson entitled to enforce” an instrument is defined as “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the…”
Ballentine v. Alabama Farm Credit, ACA, 138 So. 3d 1005 (Ala. Civ. App. 2013).
· cites it 2× “Ala. Code 1975, § 7-3-309(a) (UCC provision applicable to negotiable instruments setting forth circumstances under which a person is entitled to enforce such an *1010 instrument despite lacking possession of it).”
Summerlin v. Shellpoint Mortg. Servs., 165 F. Supp. 3d 1099 (N.D. Ala. 2016).
“9 Alabama’s Uniform Commercial Code defines a “[p]erson entitled to enforce” a negotiable instrument as “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who…”
Graveling v. BankUnited N.A., 970 F. Supp. 2d 1243 (N.D. Ala. 2013).
“Alabama law defines a “person entitled to enforce” an instrument as either: (1) the holder of the instrument, (2) a nonholder in possession of the instrument who has the rights of a holder, or (3) a person not in possession of the instrument who is entitled to enforce the…”
Nelson v. Nationstar Mortg. LLC (Bankr. N.D. Ala. 2019).
“109 Accordingly, as recently explained by the Eleventh Circuit, in Alabama “a note can be enforced by (1) the holder of the instrument, (2) a nonholder who is in possession of the instrument and who has the rights of a holder, or (3) a person not in possession of the instrument…”
— Ala. Code § 7-3-309(a) — 3 cases
Atl. Nat. Trust, LLC v. McNamee, 984 So. 2d 375 (Ala. 2007).
“Atlantic National Trust, LLC, contends that, because § 7-3-309 is silent with regard to the assignability of the right to enforce a lost, destroyed, or stolen promissory note, other provisions of Alabama's version of the Uniform Commercial Code determine whether such a right is…”
Douglas v. Troy Bank & Trust Co., 122 So. 3d 181 (Ala. Civ. App. 2012).
“Ala.Code 1975, § 7-3-309(a) (UCC provision applicable to negotiable instruments setting forth circumstances under which a person is entitled to enforce such an instrument despite lacking possession of it).”
Ballentine v. Alabama Farm Credit, ACA, 138 So. 3d 1005 (Ala. Civ. App. 2013).
“Ala. Code 1975, § 7-3-309(a) (UCC provision applicable to negotiable instruments setting forth circumstances under which a person is entitled to enforce such an *1010 instrument despite lacking possession of it).”
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