§ 25-8-105. Notice of adverse claim.
§ 25‑8‑105. Notice of adverse claim.
(a) A person has noticeof an adverse claim if:
(1) The person knows ofthe adverse claim;
(2) The person is awareof facts sufficient to indicate that there is a significant probability thatthe adverse claim exists and deliberately avoids information that wouldestablish the existence of the adverse claim; or
(3) The person has aduty, imposed by statute or regulation, to investigate whether an adverse claimexists, and the investigation so required would establish the existence of theadverse claim.
(b) Having knowledgethat a financial asset or interest therein is or has been transferred by arepresentative imposes no duty of inquiry into the rightfulness of atransaction and is not notice of an adverse claim. However, a person who knowsthat a representative has transferred a financial asset or interest therein ina transaction that is, or whose proceeds are being used, for the individualbenefit of the representative or otherwise in breach of duty has notice of an adverseclaim.
(c) An act or eventthat creates a right to immediate performance of the principal obligationrepresented by a security certificate or sets a date on or after which thecertificate is to be presented or surrendered for redemption or exchange doesnot itself constitute notice of an adverse claim except in the case of atransfer more than:
(1) One year after adate set for presentment or surrender for redemption or exchange; or
(2) Six months after adate set for payment of money against presentation or surrender of thecertificate if money was available for payment on that date.
(d) A purchaser of acertificated security has notice of an adverse claim if the securitycertificate:
(1) Whether in bearer orregistered form, has been indorsed "for collection" or "forsurrender" or for some other purpose not involving transfer; or
(2) Is in bearer formand has on it an unambiguous statement that it is the property of a personother than the transferor, but the mere writing of a name on the certificate isnot such a statement.
(e) Filing of afinancing statement under Article 9 of this Chapter is not notice of an adverseclaim to a financial asset. (1965, c. 700; s. 1; 1989, c.588, s. 1; 1997‑181, s. 1.)