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.
Alabama Legal Code
Section 7-3-306 - Claims to an Instrument
Source: https://alison.legislature.state.al.us/code-of-alabama?section=7-3-306· Version 2026