Okla. Stat. tit. 12A § 3-301

Current through Laws 2024, c. 453.

Section 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 3-309 or subsection (d) of Section 3-418 of this title. 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.

Okla. Stat. tit. 12A, § 3-301

Laws 1961, p. 108, § 3-301; Amended by Laws 1991, SB 25, c. 117, § 52, eff. 1/1/1992.

Oklahoma Code Comment

This Section clarifies who entitled to enforce an instrument. The Section is not limited to holders. Of particular importance is that a nonholder in possession of an instrument who has the rights of a holder may enforce the instrument.

Under prior Oklahoma law, the holder of legal title to an instrument could maintain an action on the instrument, even though others might be beneficial owners. The beneficiaries were not necessary parties to the action. See Wood & Co. v. Wood, 169 Okla. 217, 37 P.2d 256 (1934); Turner v. Crowder, 134 Okla. 215, 273 P. 349 (1928). Under Section 3-301, in certain circumstances, the beneficiaries could also maintain the action.

An Oklahoma case that is an example of how this Section might operate is Russell v. Maxson Sales Co., 591 P.2d 703 (Okla. 1979). In that action, the plaintiffs were seeking to enforce a check and were denied that right, although they had rights in the proceeds, because they were not holders of the check. The court found that the bank, which was the collecting bank, was not the plaintiffs' agent for collection purposes. However, the court did not address whether the bank was the plaintiffs' common-law agent or whether the payee's wife, who deposited the check with the bank, was the plaintiffs' agent for the purpose of holding the check. If such a finding were made, then under this Section, the plaintiffs would be in possession of the check through their agent and would have the right to enforce the instrument, even though they were non-holders, because the check was not found to have been negotiated to them.

It is possible that if the court in Russell had found the payee's wife to be the plaintiffs' agent, then the court also could have found negotiation because the indorsement of the instrument was in blank and, therefore, the instrument was payable to bearer. Thus, the court could have reached the same result under the Code prior to the 1992 revisions as this Section now dictates. The court, however, found that the plaintiffs were not holders of the instrument and, therefore, they could not be holders in due course and were subject to all defenses