Sec. 42a-8-105. Notice of adverse claim.
Sec. 42a-8-105. Notice of adverse claim. (a) A person has notice of an adverse
claim if:
(1) The person knows of the adverse claim;
(2) The person is aware of facts sufficient to indicate that there is a significant
probability that the adverse claim exists and deliberately avoids information that would
establish the existence of the adverse claim; or
(3) The person has a duty, imposed by statute or regulation, to investigate whether
an adverse claim exists, and the investigation so required would establish the existence
of the adverse claim.
(b) Having knowledge that a financial asset or interest therein is or has been transferred by a representative imposes no duty of inquiry into the rightfulness of a transaction
and is not notice of an adverse claim. However, a person who knows that a representative
has transferred a financial asset or interest therein in a transaction that is, or whose
proceeds are being used, for the individual benefit of the representative or otherwise in
breach of duty has notice of an adverse claim.
(c) An act or event that creates a right to immediate performance of the principal
obligation represented by a security certificate or sets a date on or after which the certificate is to be presented or surrendered for redemption or exchange does not itself constitute notice of an adverse claim except in the case of a transfer more than:
(1) One year after a date set for presentment or surrender for redemption or exchange; or
(2) Six months after a date set for payment of money against presentation or surrender of the certificate, if money was available for payment on that date.
(d) A purchaser of a certificated security has notice of an adverse claim if the security
certificate:
(1) Whether in bearer or registered form, has been endorsed "for collection" or "for
surrender" or for some other purpose not involving transfer; or
(2) Is in bearer form and has on it an unambiguous statement that it is the property
of a person other than the transferor, but the mere writing of a name on the certificate
is not such a statement.
(e) Filing of a financing statement under article 9 is not notice of an adverse claim
to a financial asset.
(1959, P.A. 133, S. 8-105; P.A. 79-435, S. 4; P.A. 97-182, S. 5.)
History: P.A. 79-435 specified "certificated" securities in Subsec. (1), inserted new Subsec. (2) re uncertificated securities and renumbered and amended former Subsec. (2) accordingly, adding provision re presumption of truth of facts in
initial transaction statement; P.A. 97-182 entirely replaced former provisions re status of certificated securities and of
statements and instructions with respect to uncertificated securities and procedures and presumptions in an action on a
security with provisions re notice of an adverse claim, a restatement in part of Sec. 42a-8-304(1) and (3) and Sec. 42a-8-305, revised to 1997.
See Sec. 42a-8-114 for successor provisions to Sec. 42a-8-105(3), revised to 1997, re rules in an action on a security.