Hwang bankruptcy Case – Financial Double Jeopardy – Borrower is entitled to credit for payments made on an instrument – California Commercial Code Section 3602

This California Code is to discuss the Hwang Bankruptcy Case in California.

California Commercial Code Section 3602.

(a) Subject to subdivision (b), an instrument is paid to the extent payment is made

(1) by or on behalf of a party obliged to pay the instrument, and

(2) to a person entitled to enforce the instrument.

To the extent of the payment, the obligation of the party

obliged to pay the instrument is discharged even though payment is
made with knowledge of a claim to the instrument under Section 3306
by another person.
   (b) The obligation of a party to pay the instrument is not
discharged under subdivision (a) if either of the following applies:
   (1) A claim to the instrument under Section 3306 is enforceable
against the party receiving payment and (A) payment is made with
knowledge by the payor that payment is prohibited by injunction or
similar process of a court of competent jurisdiction, or (B) in the
case of an instrument other than a cashier's check, teller's check,
or certified check, the party making payment accepted, from the
person having a claim to the instrument, indemnity against loss
resulting from refusal to pay the person entitled to enforce the
instrument.
   (2) The person making payment knows that the instrument is a
stolen instrument and pays a person it knows is in wrongful
possession of the instrument.