§ 3305. Defenses and claims in recoupment
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 13 Pa.C.S.A. Commercial Code
13 Pa.C.S.A. § 3305
§ 3305. Defenses and claims in recoupment
(3) a claim in recoupment of the obligor against the original payee of the instrument if the claim arose from the transaction that gave rise to the instrument, but the claim of the obligor may be asserted against a transferee of the instrument only to reduce the amount owing on the instrument at the time the action is brought.
(b) Right of holder in due course to enforce obligation.--The right of a holder in due course to enforce the obligation of a party to pay the instrument is subject to defenses of the obligor stated in subsection (a)(1), but is not subject to defenses of the obligor stated in subsection (a)(2) or claims in recoupment stated in subsection (a)(3) against a person other than the holder.
(c) Claims and defenses of person other than obligor on instrument.--Except as stated in subsection (d), in an action to enforce the obligation of a party to pay the instrument, the obligor may not assert against the person entitled to enforce the instrument a defense, claim in recoupment or claim to the instrument (section 3306) of another person, but the other person's claim to the instrument may be asserted by the obligor if the other person is joined in the action and personally asserts the claim against the person entitled to enforce the instrument. An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument.
(d) Instrument signed for accommodation.--In an action to enforce the obligation of an accommodation party to pay an instrument, the accommodation party may assert against the person entitled to enforce the instrument any defense or claim in recoupment under subsection (a) that the accommodated party could assert against the person entitled to enforce the instrument, except the defenses of discharge in insolvency proceedings, infancy and lack of legal capacity.
Credits
1992, July 9, P.L. 507, No. 97, § 5, effective in one year.
13 Pa.C.S.A. § 3305, PA ST 13 Pa.C.S.A. § 3305
Current through Act 11 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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