Page:United States Statutes at Large Volume 77.djvu/768

 736

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

§28:8—^208. Effect of signature of authenticating trustee, registrar or transfer agent (1) A person placing his signature upon a security as authenticating trustee, registrar, transfer ageiit or the like wan-ants to a purchaser for value without notice of the particular defect that (a) the security is genuine; and (b) his own participation in the issue of the security is within his capacity and witliin the scope of the authorization received by him from the issuer; and (c) lie has reasonable grounds to believe that the security is in the form and within the amount the issuer is authorized to issue. (2) Unless otherwise agreed, a person by so placing his signature does not assume responsibility for the validity of the security in other respects. PART 3—PURCHASE § 28:8—301. Rights acquired by purchaser; "adverse claim"; title acquired by bona fide purchaser (1) Upon delivery of a security the purchaser acquires the rights in the security which his transferor had or had actual authority to convey except that a purchaser who has himself been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim cannot improve his position by taking from a later bona fide purchaser. "Adverse claim" includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security. (2) A bona fide purchaser in addition to acquiring the rights of a purchaser also acquires the security free of any adverse claim. (3) A purchaser of a limited interest acquires rights only to the extent of the interest purchased. §28:8—302. "Bona fide purchaser" A "bona fide purchaser'' is a purchaser for vakie in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or of one in registered form issued to him or indorsed to him or in blank. §28:8—303. "Broker" "Broker" means a person engaged for all or part of his time in the business of buying and selling securities, who in the transaction concerned acts for, or buys a security from or sells a security to a customer. Nothing in this article determines the capacity in which a person acts for purposes of any other statute or rule to which such person is subject. § 28:8—304. Notice to purchaser of adverse claims (1) A purchaser (including a broker for the seller or buyer but excluding an intermediary bank) of a security is charged with notice of adverse claims if (a) the security whether in bearer or registered form has been indorsed "for collection" or "for surrender" or for some other purpose not involving transfer; or (b) the security is m bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor. The mere writing of a name on a security is not such a statement. (2) The fact that the purchaser (including a broker for the seller or buyer) has notice that the security is held for a third person or is registered in the name of or indorsed by a fiduciary does not create a duty of inquiry into the rightfulness of the transfer or constitute

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