Tennessee Code Annotated
Tenn. Code Ann. § 47-3-306 (2026)
Claims to an instrument
✓ current as of May 2026
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.
Acts 1995, ch. 397, § 2.
Notes of Decisions
Cited in 6
cases, 1978–2011 · leading case: Fed. Deposit Ins. Corp. v. Webb, 464 F. Supp. 520 (E.D. Tenn. 1978).
Fed. Deposit Ins. Corp. v. Webb, 464 F. Supp. 520 (E.D. Tenn. 1978). “Under T.C.A. § 47-3-306 the F.D.I.C. as holder of the note is subject to: (a) all valid claims to it [the note] on the part of any person; and (b) all defenses of any party which would be available in an action on a simple contract; Therefore, if HNB failed to use reasonable…”
Starnes Fam. Off., LLC v. McCullar, 765 F. Supp. 2d 1036 (W.D. Tenn. 2011). “June 9, 2004) (citations omitted); see Tenn.Code Ann. § 47-3-306. However, McCullar does not allege any plausible defenses to payment on the Notes against Independent Bank, the original payee.”
Martin v. Defendefer (In re Butcher), 79 B.R. 741 (Bankr. E.D. Tenn. 1987). “Tenn. Code Ann. § 47-3-306 (b) (1979). Plaintiff concedes he is not a holder in due course but insists an absence of mutual obligations precludes setoff.”
Fed. Deposit Ins. v. Newton, 737 S.W.2d 278 (Tenn. Ct. App. 1987). “The defendants also assert the defense of failure of consideration provided by Tenn.Code Ann. §§ 47-3-306 and 47-3-408. Tennessee Code Ann.”
State Resources Corp. v. Thomas E. Talley (Tenn. Ct. App. 2004). “See T.C.A. § 47-3-306. Although Talley “reserve[d] the right to amend the answer to include affirmative defenses and additional responses as they bec[ame] known,” no such defenses were ever raised by amendment to the Answer.”
United Am. Fin. Corp. v. Fin. Interstate Serv. Corp. (In re United Am. Fin. Corp.), 36 B.R. 331 (Bankr. E.D. Tenn. 1984). “Tenn.Code Ann. § 47-3-306 (1979) enacts: Rights of one not holder in due course.”
— Tenn. Code Ann. § 47-3-306(b) — 1 case
Fed. Deposit Ins. Corp. v. Webb, 464 F. Supp. 520 (E.D. Tenn. 1978). “Under T.C.A. § 47-3-306 the F.D.I.C. as holder of the note is subject to: (a) all valid claims to it [the note] on the part of any person; and (b) all defenses of any party which would be available in an action on a simple contract; Therefore, if HNB failed to use reasonable…”
— Tenn. Code Ann. § 47-3-306(c) — 2 cases
Fed. Deposit Ins. Corp. v. Webb, 464 F. Supp. 520 (E.D. Tenn. 1978). “Under T.C.A. § 47-3-306 the F.D.I.C. as holder of the note is subject to: (a) all valid claims to it [the note] on the part of any person; and (b) all defenses of any party which would be available in an action on a simple contract; Therefore, if HNB failed to use reasonable…”
Fed. Deposit Ins. v. Newton, 737 S.W.2d 278 (Tenn. Ct. App. 1987). “The defendants also assert the defense of failure of consideration provided by Tenn.Code Ann. §§ 47-3-306 and 47-3-408. Tennessee Code Ann.”
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