Page:United States Statutes at Large Volume 77.djvu/766

 734

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

(2) When the buyer fails to pay the price as it comes due under a contract of sale the seller may recover the price (a) of securities accepted by the buyer; and (b) of other securities if efforts at their resale would be unduly burdensome or if there is no readily available market for their resale. PART 2—ISSUE—ISSUER §28:8—201. "Issuer" (1) With respect to obligations on or defenses to a security "issuer" includes a person who (a) places or authorizes the placing of his name on a security (otherwise than as authenticating trustee, registrar, transfer agent or the like) to evidence that it represents a share, participation or other interest in his property or in an enterprise or to evidence his duty to perform an obligation evidenced by the security; or (b) directly or indirectly creates fractional interests in his rights or property which fractional interests are evidenced by securities; or (c) becomes responsible for or in place of any other person described as an issuer in this section. (2) With respect to obligations on or defenses to a security a guarantor is an issuer to the extent of his guaranty whetlier or not his obligation is noted on the security. (3) With respect to registration of transfer (part 4 of this article) "issuer" means a person on whose behalf transfer b(K)ks are maintained. § 28:8—^202. Issuer's responsibility and defenses; notice of defect or defense (1) Even against a purchaser for value and without notice, the terms of a security include those stated on the security and those made part of the security by reference to another instrument, indenture or document or to a constitution, statute, ordinance, rule, regulation, order or the like to the extent that the terms so referred to do not conflict with the stated terms. Such a reference does not of itself charge a purchaser for value with notice of a defect going to the validity of the security even though the security expressly states that a person accepting it admits such notice. (2)(a) A security other than one issued by a goverimient or governmental agency or unit even though issued with a defect going to its validity is valid in the hands of a purchaser for value and without notice of the particular defect unless the defect involves a violation of constitutional provisions in which case the security is valid in the hands of a subsequent purchaser for value and without notice of the defect. (b) The rule of subparagraph (a) applies to an issuer which is a government or governmental agency or unit only if either there has been substantial compliance with the legal requirements governing the issue or the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security. (3) Except as otherwise provided in the case of certain unauthorized signatures on issue (section 28:8—205), lack of genuineness of a security is a complete defense even against a purchaser for value and without notice. (4) All other defenses of the issuer including nondelivery and conditional delivery of the security are ineffective against a purchaser for value who has taken without notice of the particular defense.

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