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  • Ch. 678 UNIFORM COMMERCIAL CODE INVESTMENT SECURITIES Ch. 678

    may be effected by the making of appropriate entries on the books of the clearing corporation reducing the account of the transferor or pledg-or and increasing the account of the trans-feree or pledgee by the amount of the obliga-tion or the number of shares or rights trans-ferred or pledged.

    (2) Under this section entries may be with respect to like securities or interests therein as a part of a fungible bulk and may refer merely to a quantity of a particular security without reference to the name of the registered owner, certificate or bond number or the like and, in appropriate cases, may be on a net basis taking into account other transfers or pledges of the same security.

    (3) A transfer or pledge under this section has the effect of a delivery of a security in bearer form or duly indorsed in blank ( 678.-

    301 ) representing the amount of the obliga-tion or the number of shares or rights trans-ferred or pledged. If a pledge or the creation of a security interest is intended, the making of entries has the effect of a taking of delivery by the pledgee or a secured party

  • Ch. 678 UNIFORM COMMERCIAL CODE-INVESTMENT SECURITIES Ch. 678

    issuer is not charged with notice of the contents of any document obtained pursuant to this paragraph (b) except to the extent that the con-tents relate directly to the appointment or in-cumbency.

    (4) The issuer may elect to require reason-able assurance beyond that specified in this section but if it does so and for a purpose other than that specified in subsection (3) (b) both re-quires and obtains a copy of a will, trust, in-denture, articles of co-partnership, by-laws or other controlling instrument it is charged with notice of all matters contained therein affecting the transfer.

    History.-!, ch . 65-25'. Note.-18-,02, U .C.C.

    cr.-610.051 Evidence or appointment or Incumbency.

    678.403 Limited duty of inquiry.-(!) An issuer to whom a security is pre-

    sented for registration is under a duty to in-quire into adverse claims if:

    (a) A written notification of an adverse claim is received at a time and in a manner which affords the issuer a reasonable opportu-nity to act on it prior to the issuance of a new, reissued or re-registered security and the noti-fication identifies the claimant, the registered owner and the issue of which the security is a part and provides an address for communica-tions directed to the claimant; or

    (b) The issuer is charged with notice of an adverse claim from a controlling instrument which it has elected to require under 678.-402 (4).

    (2) The issuer may discharge any_ duty of inquiry by any reasonable means, including no~ tifying an adverse claimant by registered or certified mail at the address furnished by him or if there be no such address at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be reg-istered unless within thirty days from the date of mailing the notification, either:

    (a) An appropriate restraining order, in-junction or other process issues from a court of competent jurisdiction; or

    (b) An indemnity bond sufficient in the is-suer's judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved, from any loss which it or they may suffer by complying with the adverse claim is filed with the issuer.

    (3) Unless an issuer is charged with notice of an adverse claim from a controlling instru-ment which it has elected to require under 678.402 ( 4) or receives notification of an ad-verse claim under subsection (1) of this section, where a security presented for registration is indorsed by the appropriate person or persons the issuer is under no duty to inquire into ad-verse claims. In particular:

    (a) An issuer registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent, or correct description of the fiduciary relationship and thereafter the

    issuer may assume without inquiry that the newly registered owner continues to be the fiduciary until the issuer receives written notice that the fiduciary is no longer acting as such with respect to the particular security;

    (b) An issuer registering transfer on an in-dorsement by a fiduciary is not bound to inquire whether the transfer is made in compliance with a controlling instrument or with the law of the state having jurisdiction of the fiduciary rela-tionship, including any law requiring the fidu-ciary to obtain court approval of the transfer; and

    (c) The issuer is not charged with notice of the contents of any court record or file or other recorded or unrecorded document even though the document is in its possession and even though the transfer is made on the indorsement of a fiduciary to the fiduciary himself or to his nominee.

    Hlstory.-1, ch. 65-25,. Nole.-18-03, U .C.C.

    cf.-610.031 Registration In the name or a fiduciary . f 610.0U Assignment by a fiduciary. 1610.081 Nonl!ab!llty of third persons.

    678.404 Liability and non-liability for reg-istration.-

    (1) Except as otherwise provided in any law relating to the collection of taxes, the is-suer is not liable to the owner or any other person suffering loss as a result of the registra-tion of a transfer of a security if:

    (a) There were on or with the security the necessary indorsements (678.308) ; and

    (b) The issuer had no duty to inquire into adverse claims or has discharged any such duty (678.403) .

    (2) Where an issuer has registered a trans-fer of a security to a person not entitled to it the issuer on demand must deliver a like se-curity to the true owner unless:

    (a) The registration was pursuant to sub-section (1 ) ; or

    (b) The owner is precluded from asserting any claim for registering the transfer under 678.405(1 ) ; or

    (c) Such delivery would result in overissue, in which case the issuer's liability is governed by 678.104. .

    History.-!, ch . 65-254. Note.- 8-404, U .C .C.

    cr.-610.071 Nonl!ab!llty of corporation or transfer agent.

    678.405 Lost, destroyed and stolen secu-rities.-

    (1) Where a security has been lost, ap-parently destroyed or wrongfully taken and the owner fails to notify the issuer of that fact within a reasonable time after he has notice of it and the issuer registers a transfer of the se-curity before receiving such a notification, the owner is precluded from asserting against the issuer any claim for registering the transfer under the preceding section or any claim to a new security under this section.

    (2) Where the owner of a security claims that the security has been lost, destroyed or wrongfully taken, the issuer must issue a new

    1802

  • UNIFORM COMMERCIAL CODE-INVESTMENT SECURITIES Ch. 678

    security in place of the original security if the owner:

    (a) So requests before the issuer has notice that the security has been acquired by a bona fide purchaser; and

    (b) Files with the issuer a sufficient in-demnity bond; and

    (c) Satisfies any other reasonable require-ments imposed by the issuer.

    (3) If, after the issue of the new security, a bona fide purchaser of the original security pre-sents it for registration of transfer, the issuer must register the transfer unless registration would result in overissue, in which event the issuer's liability is governed by 678.104. In addition to any rights on the indemnity bond, the issuer may recover the new security from the person to whom it was issued or any person taking under him except a bona fide purchaser.

    Bla&o17.-11. ch. 85-254. No&e.-18-405, u.c.c.; auperaedea 1814.111.

    678.406 Duty of authenticating trustee, transfer agent or registrar.-

    ( I) Where a person acts as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of transfers of its securities or in the issue of new securities or in the cancellation of surrendered securities:

    (a) He is under a duty to the issuer to ex-ercise good faith and due diligence in perform-ing his functions; and

    (b) He has with regard to the particular functions he performs the same obligation to the holder or owner of the security and has the same rights and privileges as the issuer has in regard to those functions.

    (2) Notice to an authenticating trustee, transfer agent, registrar or other such agent is notice to the issuer with respect to the functions performed by the agent.

    Hls&orr.-11. ch. 65-254. No&e.-18-406, u.c.c.

    1803

  • Ch. 679 UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS

    CHAPTER 679

    *UNIFORM COMMERCIAL CODE-SECURED TRANSACTIONS

    ARTICLE 9 SECURED TRANSACTIONS; SALES OF ACCOUNTS, CONTRACT RIGHTS AND CHATTEL PAPER

    PART I SHORT TITLE, APPLICABILITY AND DEFINITIONS (679.101-679.113)

    PART II VALIDITY OF SECURITY AGREEMENT AND RIGHTS OF PARTIES THERETO (679.201-679.208)

    PART III RIGHTS OF THIRD PARTIES; PERFECTED AND UNPERFECTED SECURITY INTERESTS; RULES OF PRIORITY ( ~679.301-679.-318)

    PART IV FILING (679.401-679.407)

    PART V DEFAULT ( 679.501-679.507)

    ARTICLE 9

    SECURED TRANSACTIONS; SALES OF ACCOUNTS, CONTRACT RIGHTS AND CHATTEL PAPER

    PART I

    SHORT TITLE, APPLICABILITY AND DEFINITIONS

    679.101 679.102 679.103

    679.104 679.105 679.106

    679.107

    Short title. Policy and scope of chapter. Accounts , contract rights, general in-

    tangibles and equipment relating to another jurisdiction; and incoming goods already subject to a secu-rity interest.

    Transactions excluded from chapter. Definitions an