Mich. Comp. Laws » Michigan Compiled Laws / Chapter 440 / Act 174 of 1962
Michigan Compiled Laws

Mich. Comp. Laws § 440.3306 (2026)

Instrument; person subject to claim of property or possessory right.

✓ current as of July 2026
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UNIFORM COMMERCIAL CODE


Act 174 of 1962


440.3306 Instrument; person subject to claim of property or possessory right.

Sec. 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.

History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993

Notes of Decisions
Cited in 5 cases, 1972–2014 · leading case: El Camino Resources, Ltd. v. Huntington Nat'l Bank, 722 F. Supp. 2d 875 (W.D. Mich. 2010).
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El Camino Resources, Ltd. v. Huntington Nat'l Bank, 722 F. Supp. 2d 875 (W.D. Mich. 2010). · cites it 2× “16 In a similar vein, the Bank asserts that it was a holder in due course of the check, under section 3-302 of the Uniform Commercial Code, Mich. Comp. Laws § 440.3302 , and therefore took the check free of claims by virtue of UCC § 3-306, Mich.”
Rieth-Riley Constr. Co. v. First Sec. Bank (In Re Williams Bros. Asphalt Paving Co.), 59 B.R. 71 (Bankr. W.D. Mich. 1986). · cites it 2× “A transferee takes property subject to the same infirmities of title to which the property was subject in the hands of the transferor. Thus, a transfer- or who holds only legal title in property can pass only legal title, and a trustee, who is a legal title holder, passes only…”
Grand Rapids Auto Sales, Inc. v. MBNA Am. Bank, 227 F. Supp. 2d 721 (W.D. Mich. 2002). “§ 440.3306. A holder is a holder in due course if the instrument does not bear evidence of forgery or alteration and the holder takes the instrument: (i) for value, (ii) in good faith, (iii) without notice that the instrument is overdue or has been dishonored or that there is an…”
Behrens v. Apessos, 197 N.W.2d 886 (Mich. Ct. App. 1972). · cites it 4× “NOTES [1] Present applicable statute is: MCLA 440.3306(b), (c); MSA 19.3306(b), (c).”
Dawda, Mann, Mulcahy & Sadler, P.L.C. v. Bank of Am., N.A., 62 F. Supp. 3d 651 (E.D. Mich. 2014). · cites it 2× “In addition, the Michigan Court of Appeals, adopting a California Supreme Court decision, held that plaintiffs negligence action was not abrogated by the UCC’s “holder in due course” doctrine.”
— Mich. Comp. Laws § 440.3306(b) — 1 case
Behrens v. Apessos, 197 N.W.2d 886 (Mich. Ct. App. 1972). “NOTES [1] Present applicable statute is: MCLA 440.3306(b), (c); MSA 19.3306(b), (c).”
— Mich. Comp. Laws § 440.3306(c) — 1 case
Behrens v. Apessos, 197 N.W.2d 886 (Mich. Ct. App. 1972). “NOTES [1] Present applicable statute is: MCLA 440.3306(b), (c); MSA 19.3306(b), (c).”
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