NRS
104.3302 Holder in due course.
1. Except as otherwise provided in
subsection 3 of this section and subsection 4 of NRS 104.3106, “holder in due course” means
the holder of an instrument if:
(a) The instrument when issued or negotiated to
the holder does not bear such apparent evidence of forgery or alteration or is
not otherwise so irregular or incomplete as to call into question its
authenticity; and
(b) The holder took the instrument:
(1) For value;
(2) In good faith;
(3) Without notice that the instrument is
overdue or has been dishonored or that there is an uncured default with respect
to payment of another instrument issued as part of the same series;
(4) Without notice that the instrument
contains an unauthorized signature or has been altered;
(5) Without notice of any claim to the
instrument described in NRS 104.3306;
and
(6) Without notice that any party has a
defense or claim in recoupment described in subsection 1 of NRS 104.3305.
2. Notice of discharge of a party, other
than discharge in an insolvency proceeding, is not notice of a defense under
subsection 1, but discharge is effective against a person who became a holder
in due course with notice of the discharge. Public filing or recording of a
document does not of itself constitute notice of a defense, claim in recoupment
or claim to the instrument.
3. Except to the extent a transferor or
predecessor in interest has rights as a holder in due course, a person does not
acquire rights of a holder in due course of an instrument taken:
(a) By legal process or by purchase in an
execution, bankruptcy, or creditor’s sale or similar proceeding;
(b) By purchase as part of a bulk transaction not
in ordinary course of business of the transferor; or
(c) As the successor in interest to an estate or
other organization.
4. If, under paragraph (a) of subsection 1
of NRS 104.3303, the promise of
performance that is the consideration for an instrument has been partially
performed, the holder may assert rights as a holder in due course of the
instrument only to the fraction of the amount payable under the instrument
equal to the value of the partial performance divided by the value of the
promised performance.
5. If the person entitled to enforce an
instrument has only a security interest in the instrument and the person
obliged to pay the instrument has a defense, claim in recoupment or claim to
the instrument that may be asserted against the person who granted the security
interest, the person entitled to enforce the instrument may assert rights as a
holder in due course only to an amount payable under the instrument which, at
the time of enforcement of the instrument, does not exceed the amount of the
unpaid obligation secured.
6. To be effective, notice must be
received at a time and in a manner that gives a reasonable opportunity to act
on it.
7. This section is subject to any law
limiting status as a holder in due course in particular classes of
transactions.
(Added to NRS by 1965,
825; A 1993,
1272)
Notes of Decisions
Petersen v. Roylin Enter., Inc., 529 F. Supp. 584 (D. Nev. 1982).
· cites it 7× “Plaintiff would be correct in this assertion except that he does not fall within the ambit of § 104.9206(1) N.”
Sea Air Support, Inc. v. Herrmann, 613 P.2d 413 (Nev. 1980).
“” NRS 104.3302(1). Sea Air promised to take “such legal action as may be necessary to enforce collection” of the $10,000.”
Contrail Leasing Partners, Ltd. v. Exec. Serv. Corp., 688 P.2d 765 (Nev. 1984).
“” NRS 104.3302. The parties agree that Executive is not a holder in due course of the note because Executive had notice of Contrail’s cross-claim against Bonanza for damages under the lease agreement and for cancellation of the note.”
Unruh v. Nevada Nat'l Bank, 498 P.2d 1349 (Nev. 1972).
“Although the *429 payee Bank may have been a holder in due course, NRS 104.3302(2), we shall, for the purposes of this opinion, assume that the Bank was not a holder in due course and took the instrument subject to the defense of want of consideration, NRS 104.”
Mahaffey v. Inv.'s Nat'l Sec. Co., 747 P.2d 890 (Nev. 1987).
“NRS 104.3302(l)(c). Since it was not a holder in due course, the Mahaffeys could assert any of their defenses, including fraudulent inducement and failure of consideration, against payment of the note.”
Turkiye Ihracat Kredi Bankasi, A.S. v. Nature's Bakery, LLC (D. Nev. 2021).
“26 3 NRS 104.3302 requires the party arguing it is a holder in due course to demonstrate that it took an instrument 27 (i) for value, (ii) in good faith, (iii) without notice of any claim to the instrument described in NRS 104.”
Saka v. Mann Theatres, 575 P.2d 1335 (Nev. 1978).
· cites it 2× “First, he argues respondent was not a holder in due course, and, second, appellant did not receive any consideration from respondent upon which to base individual liability.”
Lefkowitz v. Bank of Am., N.A. (Nev. 2013).
“See NRS 104.3302 (requiring a note holder to satisfy various criteria in order to be a holder in due course); Leyva, 127 Nev.”
— Nev. Rev. Stat. § 104.3302(1) — 4 cases
Sea Air Support, Inc. v. Herrmann, 613 P.2d 413 (Nev. 1980).
“” NRS 104.3302(1). Sea Air promised to take “such legal action as may be necessary to enforce collection” of the $10,000.”
Petersen v. Roylin Enter., Inc., 529 F. Supp. 584 (D. Nev. 1982).
“Plaintiff would be correct in this assertion except that he does not fall within the ambit of § 104.9206(1) N.”
— Nev. Rev. Stat. § 104.3302(2) — 3 cases
Unruh v. Nevada Nat'l Bank, 498 P.2d 1349 (Nev. 1972).
“Although the *429 payee Bank may have been a holder in due course, NRS 104.3302(2), we shall, for the purposes of this opinion, assume that the Bank was not a holder in due course and took the instrument subject to the defense of want of consideration, NRS 104.”
— Nev. Rev. Stat. § 104.3302(3)(b) — 1 case
Petersen v. Roylin Enter., Inc., 529 F. Supp. 584 (D. Nev. 1982).
“Plaintiff would be correct in this assertion except that he does not fall within the ambit of § 104.9206(1) N.”
— Nev. Rev. Stat. § 104.3302(l)(c) — 1 case
Mahaffey v. Inv.'s Nat'l Sec. Co., 747 P.2d 890 (Nev. 1987).
“NRS 104.3302(l)(c). Since it was not a holder in due course, the Mahaffeys could assert any of their defenses, including fraudulent inducement and failure of consideration, against payment of the note.”
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