400.8-306. Effect of guaranteeing signature, indorsement or instruction.
Effect of guaranteeing signature, indorsement or instruction.
400.8-306. (a) A person who guarantees a signature of an indorserof a security certificate warrants that at the time of signing:
(1) The signature was genuine;
(2) The signer was an appropriate person to indorse, or if thesignature is by an agent, the agent had actual authority to act on behalfof the appropriate person; and
(3) The signer had legal capacity to sign.
(b) A person who guarantees a signature of the originator of aninstruction warrants that at the time of signing:
(1) The signature was genuine;
(2) The signer was an appropriate person to originate theinstruction, or if the signature is by an agent, the agent had actualauthority to act on behalf of the appropriate person, if the personspecified in the instruction as the registered owner was, in fact, theregistered owner, as to which fact the signature guarantor does not make awarranty; and
(3) The signer had legal capacity to sign.
(c) A person who specially guarantees the signature of an originatorof an instruction makes the warranties of a signature guarantor undersubsection (b) and also warrants that at the time the instruction ispresented to the issuer:
(1) The person specified in the instruction as the registered ownerof the uncertificated security will be the registered owner; and
(2) The transfer of the uncertificated security requested in theinstruction will be registered by the issuer free from all liens, securityinterests, restrictions and claims other than those specified in theinstruction.
(d) A guarantor under subsections (a) and (b) or a special guarantorunder subsection (c) does not otherwise warrant the rightfulness of thetransfer.
(e) A person who guarantees an indorsement of a security certificatemakes the warranties of a signature guarantor under subsection (a) and alsowarrants the rightfulness of the transfer in all respects.
(f) A person who guarantees an instruction requesting the transfer ofan uncertificated security makes the warranties of a special signatureguarantor under subsection (c) and also warrants the rightfulness of thetransfer in all respects.
(g) An issuer may not require a special guaranty of signature, aguaranty of indorsement, or a guaranty of instruction as a condition toregistration of transfer.
(h) The warranties under this section are made to a person taking ordealing with the security in reliance on the guaranty, and the guarantor isliable to the person for loss resulting from their breach. An indorser ororiginator of an instruction whose signature, indorsement or instructionhas been guaranteed is liable to a guarantor for any loss suffered by theguarantor as a result of breach of the warranties of the guarantor.
(L. 1963 p. 503 § 8-306, A.L. 1992 S.B. 448, A.L. 1997 S.B. 6)