N.Y. U.C.C. Law § 3-305 — Rights of a Holder in Due Course

Section 3--305. Rights of a Holder in Due Course.

To the extent that a holder is a holder in due course he takes the instrument free from

(1) all claims to it on the part of any person; and

(2) all defenses of any party to the instrument with whom the holder has not dealt except

(a) infancy, to the extent that it is a defense to a simple

contract; and

(b) such other incapacity, or duress, or illegality of the

transaction, as renders the obligation of the party a

nullity; and

(c) such misrepresentation as has induced the party to sign the

instrument with neither knowledge nor reasonable opportunity

to obtain knowledge of its character or its essential terms;

and

(d) discharge in insolvency proceedings; and

(e) any other discharge of which the holder has notice when he

takes the instrument.