Also known as: persons entitled to enforce an instrument · PETEI · entitled to enforce
Written by attorneys · grounded in primary & secondary sources — see below
A party authorized by law to demand payment or other performance from the obligor on a negotiable instrument.
Pamela Phillips transferred her leased warehouse to Premier Manufacturing but remained personally bound on the repair covenant. Premier Manufacturing failed to make repairs. The original lessor demanded performance from Pamela Phillips because she had not been released from the promise.
Pacific Bank originated a loan to Precision Tools secured by a mortgage. Pacific Bank assigned the note to Prime Logistics without mentioning the mortgage. When Precision Tools defaulted, Prime Logistics foreclosed because it held the right to enforce the underlying obligation.
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Phuong Pham subdivided her benefited parcel into two lots and sold one to Paige Porter. Both lots remained subject to the same restrictive covenant. Paige Porter sued to enforce the covenant against the burdened neighbor because each separately owned parcel holds enforcement rights.
Pierre Poulin lost the promissory note secured by his home mortgage. He attempted to foreclose after default. The court required Pierre Poulin to prove he satisfied the lost-instrument rules before allowing enforcement because only the person entitled to enforce the instrument may commence foreclosure.
Pablo Perez acquired a leased retail space from Premier Manufacturing. The original lease required the tenant to maintain the HVAC system. The landlord demanded that Pablo Perez perform the maintenance because the transfer placed him in privity of estate with the party holding enforcement rights under the covenant.
The person entitled to enforce an instrument is the holder or any other party granted enforcement rights under UCC Section 3-301. This includes a person in possession of a bearer instrument or a person with rights through proper negotiation or transfer.
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Yes. When the obligation secured by a mortgage is transferred, the mortgage follows the obligation unless the parties agree otherwise. The transferee becomes the person entitled to enforce the instrument and therefore may foreclose.
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The person seeking to enforce must satisfy additional requirements such as those in Section 403 of the Uniform Home Foreclosure Procedures Act. Mere possession is not required if the claimant proves ownership and the instrument's loss, theft, or destruction.
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