§ 41-03-34 — (3-308) Proof of signatures and status as holder in due course

1. In an action with respect to an instrument, the authenticity of and authority to make
each signature on the instrument is admitted unless specifically denied in the
pleadings. If the validity of a signature is denied in the pleadings, the burden of
establishing validity is on the person claiming validity, but the signature is presumed to
be authentic and authorized unless the action is to enforce the liability of the purported
signer and the signer is dead or incompetent at the time of trial of the issue of validity
of the signature. If an action to enforce the instrument is brought against a person as
the undisclosed principal of a person who signed the instrument as a party to the
instrument, the plaintiff has the burden of establishing that the defendant is liable on
the instrument as a represented person pursuant to subsection 1 of section 41-03-39.
2. If the validity of signatures is admitted or proved and there is compliance with
subsection 1, a plaintiff producing the instrument is entitled to payment if the plaintiff
proves entitlement to enforce the instrument under section 41-03-27, unless the
defendant proves a defense or claim in recoupment. If a defense or claim in
recoupment is proved, the right to payment of the plaintiff is subject to the defense or
claim except to the extent the plaintiff proves that the plaintiff has rights of a holder in
due course which are not subject to the defense or claim.