Colorado § 4-3-301 - Person entitled to enforce instrument.

§ 4-3-301. Person entitled to enforce instrument.

"Person entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to section 4-3-309 or 4-3-418 (d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

Source: L. 94: Entire article R&RE, p. 853, § 1, effective January 1, 1995.

Editor's note: This section is similar to former § 4-3-301 as it existed prior to 1994.

ANNOTATION

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

A note drawn to alternative, not joint, payees can be discharged only by a holder of the instrument. Reese v. Lietzan, 160 Colo. 253, 419 P.2d 959 (1966).

A holder of a note may sue upon it even if held as collateral to another which is unpaid. Rogers v. First State Bank, 79 Colo. 84, 243 P. 637 (1926); Smith v. Weindrop, 833 P.2d 856 (Colo. App. 1992).

If holder does not have entire interest. A holder may bring suit on a promissory note even if he does not have the entire interest in it. Retallic v. Dickson, 75 Colo. 123, 224 P. 1054 (1924).

If holder paid nothing. The indorsee of a promissory note is entitled to an action thereon against the maker though he paid nothing for it as well as against a prior indorser. Sykes v. Kruse, 49 Colo. 560, 113 P. 1013 (1914).

Payee, not the owner, cannot by suit cut off defense which maker might have against real party in interest. Retallic v. Dickson, 75 Colo. 123, 224 P. 1054 (1924).

Bank not authorized to enforce note because authorized agent already accepted a payoff of the note. Payment to an authorized agent of the holder has the same legal effect as payment to the holder. Section contains no explicit requirement that payment must be made only to the holder of an instrument, and the common law of agency supplements the UCC. Citywide Banks v. Armijo, 313 P.3d 647 (Colo. App. 2011).

No judgment can be legally rendered against the makers of a promissory note in favor of the original payee who has parted with his title thereto before the bringing of the action where there is nothing to show there had been a redelivery to him before the beginning of the action or at the time of the trial. Shaw v. Brady, 80 Colo. 337, 251 P. 532 (1926).

Plaintiff's possession of a promissory note is prima facie evidence of ownership although indorsed by him as against a general objection that his complaint does not state any cause of action. Gumaer v. Jackson, 37 Colo. 39, 86 P. 885 (1906).

The holder of a promissory note may set off the amount thereof in an action by the maker against him, even though he purchased the note solely for the purpose of so applying it and regardless of the fact that he acquired the note at a great discount. Holick v. Stokes, 53 Colo. 385, 127 P. 143 (1912).

Applied in Commercial Credit Corp. v. Univ. Nat'l Bank, 590 F.2d 849 (10th Cir. 1979); La Junta State Bank v. Travis, 727 P.2d 48 (Colo. 1986).