Okla. Stat. tit. 12A § 3-601

Current through Laws 2024, c. 453.

Section 3-601 - Discharge and Effect of Discharge

(a) The obligation of a party to pay the instrument is discharged as stated in this article or by an act or agreement with the party which would discharge an obligation to pay money under a simple contract.

(b) Discharge of the obligation of a party is not effective against a person acquiring rights of a holder in due course of the instrument without notice of the discharge.

Okla. Stat. tit. 12A, § 3-601

Laws 1961, p. 118, § 3-601; Amended by Laws 1991, SB 25, c. 117, § 89, eff. 1/1/1992.

Oklahoma Code Comment

Subsection (a) is not exclusive with respect to the discharge of a party's obligation to pay an instrument. Other types of discharge exist, as for example, a discharge in bankruptcy or a statutory provision for discharge if an instrument is negotiated in a gaming transaction. Prior Oklahoma decisions to the effect that the debtor has the burden of proving payment should still be valid. See John Deem Co. v. Payne, 592 P.2d 544 (Okla.Ct.App. 1979).

Under pre-revision sub section 3-601(3), there was authority denying subrogation where a mortgagor-maker paid the holder of a note and took an assignment of the note and mortgage after an assuming grantee had defaulted, reasoning that all liability on the note was discharged when the maker reacquired the note and therefore the mortgage was released. See Best Fertilizers v. Burns, 116 Ariz. 492, 570 P.2d 179 (1977). However, the 1992 UCC revisions omitted sub section 3-601(3) . By the omission of that subsection and by virtue of the right of reimbursement recognized in sub section 3-419(e), the line of authority represented by Best Fertilizers is rejected.