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Ohio Revised Code

Ohio Rev. Code § 1303.32 (2026)

Holder in due course - UCC 3-302

✓ current as of May 2026
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Effective:
August 19, 1994
Latest Legislation:
Senate Bill 147 - 120th General Assembly
PDF:
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(A) Subject to division (C) of this section and division (D) of section 1303.05 of the Revised Code, "holder in due course" means the holder of an instrument if both of the following apply:

(1) The instrument when issued or negotiated to the holder does not bear evidence of forgery or alteration that is so apparent, or is not otherwise so irregular or incomplete as to call into question its authenticity;

(2) The holder took the instrument under all of the following circumstances:

(a) For value;

(b) In good faith;

(c) 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;

(d) Without notice that the instrument contains an unauthorized signature or has been altered;

(e) Without notice of any claim to the instrument as described in section 1303.36 of the Revised Code;

(f) Without notice that any party has a defense or claim in recoupment described in division (A) of section 1303.35 of the Revised Code.

(B) Notice of discharge of a party, other than discharge in an insolvency proceeding, is not notice of a defense under division (A) of this section, 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.

(C) 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 under any of the following circumstances:

(1) By legal process or by purchase in an execution, bankruptcy, or creditor's sale or similar proceeding;

(2) By purchase as part of a bulk transaction not in ordinary course of business of the transferor;

(3) As the successor in interest to an estate or other organization.

(D) If, under division (A)(1) of section 1303.33 of the Revised Code, 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.

(E) 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 that, at the time of enforcement of the instrument, does not exceed the amount of the unpaid obligation secured.

(F) To be effective, notice must be received at a time and in a manner that gives the recipient a reasonable opportunity to respond to the notice.

(G) This section is subject to any law limiting status as a holder in due course in particular classes of transactions.
Notes of Decisions
Cited in 22 cases (2 in the last 5 years), 1984–2026 · leading case: Dice v. White Fam. Companies, Inc., 878 N.E.2d 1105 (Ohio Ct. App. 2007).
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Dice v. White Fam. Companies, Inc., 878 N.E.2d 1105 (Ohio Ct. App. 2007). · cites it 2× “37 or indicate a lack of good faith under R.C. 1303.32. {¶ 37} We find no authority to support Dice’s and Collins’s assertion that the payee of an instrument drawn on a fiduciary account can never be a holder in due course.”
G.F.D. Enter., Inc. v. Nye, 525 N.E.2d 10 (Ohio 1988). · cites it 2× “R.C. 1303.32(A), 1304.14(A), 1304.15, and 1304.”
Bank of Am., N.A. v. Pasqualone, 2013 Ohio 5795 (Ohio Ct. App. 2013). “Holder in due course status is defined in R.C. 1303.32. 12 R.C. 1303.36(A) provides that "[u]nless specifically denied in the pleadings, in an action with respect to an instrument, the authenticity of, and authority to make, each signature on an instrument is admitted.”
Buckeye Check Cashing, Inc. v. Camp, 825 N.E.2d 644 (Ohio Ct. App. 2005). · cites it 2× “” {¶ 9} R.C. 1303.32 outlines the elements required to receive holder-in-due-course status.”
CitiMortgage, Inc. v. Hoge, 2011 Ohio 3839 (Ohio Ct. App. 2011). “complete as to call into question its authenticity; [and] (a) For value; (b) In good faith; (c) 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…”
Bank of Am. v. Macho, 2011 Ohio 5495 (Ohio Ct. App. 2011). “” R.C. 1303.32. and the provisions of FIRREA specifically limit the jurisdictions that may review such claims.”
Diversified Commc'ns, Inc. v. Wyandot Indus., Inc., 475 N.E.2d 179 (Ohio Ct. App. 1984). · cites it 4× “In his opinion supporting the judgment the trial judge determined the plaintiff to be a holder in due course which took the instrument for value under the provisions of R.C. 1303.32, and expressed the view that the issue of consideration flowing from plaintiff to defendant seems…”
City Rentals, Inc. v. Kesler, 2010 Ohio 6264 (Ohio Ct. App. 2010). “Kesler testified that his family and Bauer’s family spent time together on several occasions because their children were roughly the same ages.”
Belfance v. Huntington Nat'l Bank (In Re World Metal, Inc.), 313 B.R. 720 (Bankr. N.D. Ohio 2004). · cites it 4× “Count Six of the Complaint In Count Six of her complaint, plaintiff-trustee contends that Huntington is not a holder in due course pursuant to O.R.C. § 1303.32 and that debtor, as the true owner of the Checks or their proceeds, has a property or possessory interest therein…”
Bank of Am. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). · cites it 2× “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
Savin v. Cent. Trust Co., N.A., 666 N.E.2d 332 (Ohio Ct. App. 1995). “See R.C. 1303.32. Again, we must use the statute prior to the change to avoid retrospective application of the new statute in this case.”
Bank of Am., N.A. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). · cites it 2× “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
Show all 22 citing cases →
— Ohio Rev. Code § 1303.32(A) — 2 cases
G.F.D. Enter., Inc. v. Nye, 525 N.E.2d 10 (Ohio 1988). “R.C. 1303.32(A), 1304.14(A), 1304.15, and 1304.”
Planet Home Lending, L.L.C. v. Keyes, 2026 Ohio 521 (Ohio Ct. App. 2026).
— Ohio Rev. Code § 1303.32(A)(1) — 1 case
BAC Home Loans Servicing, L.P. v. Blythe, 2013 Ohio 5775 (Ohio Ct. App. 2013).
— Ohio Rev. Code § 1303.32(A)(2) — 4 cases
Dice v. White Fam. Companies, Inc., 878 N.E.2d 1105 (Ohio Ct. App. 2007). “37 or indicate a lack of good faith under R.C. 1303.32. {¶ 37} We find no authority to support Dice’s and Collins’s assertion that the payee of an instrument drawn on a fiduciary account can never be a holder in due course.”
City Rentals, Inc. v. Kesler, 2010 Ohio 6264 (Ohio Ct. App. 2010). “Kesler testified that his family and Bauer’s family spent time together on several occasions because their children were roughly the same ages.”
Bank of Am. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
Bank of Am., N.A. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
— Ohio Rev. Code § 1303.32(A)(2)(C) — 2 cases
Bank of Am. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
Bank of Am., N.A. v. Vaught, 2014 Ohio 3383 (Ohio Ct. App. 2014). “R.C. 1303.32(A)(2). {¶ 14} In the present case, BANA, with a copy of the Note and the affidavit of Ms.”
— Ohio Rev. Code § 1303.32(B) — 1 case
Diversified Commc'ns, Inc. v. Wyandot Indus., Inc., 475 N.E.2d 179 (Ohio Ct. App. 1984). “In his opinion supporting the judgment the trial judge determined the plaintiff to be a holder in due course which took the instrument for value under the provisions of R.C. 1303.32, and expressed the view that the issue of consideration flowing from plaintiff to defendant seems…”
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