California Codes
Cal. Commercial Code § 3306 (2026)
Enforcement of Instruments
✓ current as of May 2026
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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.
Notes of Decisions
Cited in 3
cases (2 in the last 5 years), 1990–2023 · leading case: Kingsway Revocable Trust v. Fed. Sav. & Loan Ins. (In Re C.P.C. Dev. Co. No. 5), 113 B.R. 637 (Bankr. C.D. Cal. 1990).
Kingsway Revocable Trust v. Fed. Sav. & Loan Ins. (In Re C.P.C. Dev. Co. No. 5), 113 B.R. 637 (Bankr. C.D. Cal. 1990). “1976); Cal. Comm.Code § 3306. Similarly, in situations where, as here, a deed of trust is transferred, a holder of a deed of trust is subject to all claims to the deed unless the holder is a bonafide purchaser for value who takes without notice.”
Williams v. J.P. Morgan Chase Bank, N.A. (N.D. Cal. 2023). “CALIFORNIA COMMERCIAL CODE SECTIONS 3306 AND 3307 13 Section 3306 authorizes claims against persons “taking an instrument, other than a person 14 having rights of a holder in due course.”
In re: Kimberly Dawn Franklin (9th Cir. BAP 2021). “If true, these allegations may support a claim to the note or its proceeds by First Magnus or RFC under Cal. Com. Code § 3306 . But they do not support a claim for relief by Debtor because such claims cannot be asserted by the obligor of the note.”
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