Section 3--304. Notice to Purchaser

(1) The purchaser has notice of a claim or defense if
         (a) the  instrument is so incomplete, bears such visible evidence
             of forgery or alteration, or is otherwise so irregular as  to
             call  into  question  its  validity, terms or ownership or to
             create an ambiguity as to the party to pay; or
         (b) the purchaser has notice that the obligation of any party  is
             voidable  in  whole or in part, or that all parties have been
             discharged.
    (2) The purchaser has notice of a claim against the instrument when he
  has knowledge that a fiduciary has negotiated the instrument in  payment
  of  or  as  security  for his own debt or in any transaction for his own
  benefit or otherwise in breach of duty.
    (3) The purchaser has notice that an instrument is overdue if  he  has
  reason to know
         (a) that  any  part  of  the  principal amount is overdue or that
             there is an uncured default in payment of another  instrument
             of the same series; or
         (b) that acceleration of the instrument has been made; or
         (c) that  he  is taking a demand instrument after demand has been
             made or more than a  reasonable  length  of  time  after  its
             issue. A reasonable time for a check drawn and payable within
             the  states  and  territories  of  the  United States and the
             District of Columbia is presumed to be thirty days.
    (4) Knowledge of the following facts  does  not  of  itself  give  the
  purchaser notice of a defense or claim
         (a) that the instrument is antedated or postdated;
         (b) that  it  was issued or negotiated in return for an executory
             promise or accompanied by a separate  agreement,  unless  the
             purchaser  has notice that a defense or claim has arisen from
             the terms thereof;
         (c) that any party has signed for accommodation;
         (d) that an incomplete instrument has been completed, unless  the
             purchaser has notice of any improper completion;
         (e) that  any  person  negotiating  the  instrument  is  or was a
             fiduciary;
         (f) that there has been default in payment  of  interest  on  the
             instrument  or in payment of any other instrument, except one
             of the same series.
    (5) The  filing  or  recording  of  a  document  does  not  of  itself
  constitute  notice within the provisions of this Article to a person who
  would otherwise be a holder in due course.
    (6) To be effective notice must be received at such time and  in  such
  manner as to give a reasonable opportunity to act on it.
    (7)  In  any  event,  to  constitute notice of a claim or defense, the
  purchaser must have knowledge of the claim or defense  or  knowledge  of
  such  facts  that  his  action  in  taking the instrument amounts to bad
  faith.