Liberty Mortg. Corp. v. Fiscus
Annotate this CasePetitioner Branch Banking and Trust Company (BB&T) petitioned the Colorado Supreme Court for review of whether a deed of trust securing a promissory note was a negotiable instrument under Colorado's Uniform Commercial Code (UCC). The court of appeals held that deeds of trust were not negotiable instruments within the meaning of Article 3 of the UCC, therefore BB&T was not a holder in due course with respect to the deed at issue here. The Supreme Court affirmed, but on different grounds: in this case, the deed and other documents were forged. "[E]ven assuming a deed of trust qualifies as a negotiable instrument, holder-in-due-course status does not preclude a purported maker from asserting a forgery defense." Here, the purported maker possessed a valid forgery defense, his negligence didn't contribute to the forgery, and he did not ratify the forged documents. As such, the Court did not reach the issue of negotiability under Article 3 of the UCC.
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