Page:United States Statutes at Large Volume 77.djvu/769

 77 STAT. ]

PUBLIC LAW 88-243-DEC. 30, 1963

notice of adverse claims. If, however, the purchaser (exchiding an intermediary bank) lias knowledge that the proceeds are being used or that the transaction is for the individual benefit of the fiduciary or otherwise in breach of duty, the purchaser is charged with notice of adverse claims. §28:8—305. Stateness as notice of adverse claims An act or event which creates a right to immediate performance of the principal obligation evidenced by the security or which sets a date on or after which the security is to be presented or surrendered for redemption or exchange does not of itself constitute any notice of adverse claims except in the case of a purchase (a) after one year from any date set for such presentment or surrender for redemption or exchange; or (b) after six months from any date set for payment of money against presentation or surrender of the security if funds are available for payment on that date. §28:8—306. Warranties on presentment and transfer (1) A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that he is entitled to Ihe registration, payment or exchange. But a purchaser for value without notice of adverse claims who receives a new, reissued or re-registered security on registration of transfer warrants only that he has no loiowiedge of any unauthorized signature (section 28:8—311) in a necessary indorsement. (2) A person by transferring a security to a purchaser for value warrants only that (a) his transfer is effective and rightful; and (b) the security is genuine and has not been materially altered; and (c) he knows no fact which might impair the validity of the security. (3) Where a security is delivered by an intermediary known to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim against such delivery, the intermediary by such delivery warrants only his own good faith and authority even though he has purchased or made advances against the claim to be collected against the delivery. (4) A pledgee or other holder for security who redelivers the seculity received, or after payment and on order of the debtor delivers that security to a third person makes only the warranties of an intermediary under subsection (3). (5) A broker gives to his customer and to the issuer and a purchaser the warranties provided in this section and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of his customer. § 28:8—307. Effect of delivery without indorsement; right to compel indorsement Where a security in registered form has been delivered to a purchaser without a necessary indorsement he may become a bona fide purchaser only as of the time the indorsement is supplied, but against the transferor the transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary indorsement supplied. 93-025 0-64-49

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