Section 3--306. Rights of One Not Holder in Due Course.

Unless he has the rights of a holder in due course any person takes
the instrument subject to

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

(b) all defenses of any party which would be available in an action on
a simple contract; and

(c) the defenses of want or failure of consideration, non-performance
of any condition precedent, non-delivery, or delivery for a special
purpose (Section 3--408); and

(d) the defense that he or a person through whom he holds the
instrument acquired it by theft, or that payment or satisfaction to such
holder would be inconsistent with the terms of a restrictive
indorsement. The claim of any third person to the instrument is not
otherwise available as a defense to any party liable thereon unless the
third person himself defends the action for such party.