§ 6A-3-307 - Notice of breach of fiduciary duty.
SECTION 6A-3-307
§ 6A-3-307 Notice of breach of fiduciaryduty. – (a) In this section:
(1) "Fiduciary" means an agent, trustee, partner, corporateofficer or director, or other representative owing a fiduciary duty withrespect to an instrument.
(2) "Represented person" means the principal, beneficiary,partnership, corporation, or other person to whom the duty stated in paragraph(1) is owed.
(b) If (i) an instrument is taken from a fiduciary forpayment or collection or for value, (ii) the taker has knowledge of thefiduciary status of the fiduciary, and (iii) the represented person makes aclaim to the instrument or its proceeds on the basis that the transaction ofthe fiduciary is a breach of fiduciary duty, the following rules apply:
(1) Notice of breach of fiduciary duty by the fiduciary isnotice of the claim of the represented person.
(2) In the case of an instrument payable to the representedperson or the fiduciary as such, the taker has notice of the breach offiduciary duty if the instrument is (i) taken in payment of or as security fora debt known by the taker to be the personal debt of the fiduciary, (ii) takenin a transaction known by the taker to be for the personal benefit of thefiduciary, or (iii) deposited to an account other than an account of thefiduciary, as such, or an account of the represented person.
(3) If an instrument is issued by the represented person orthe fiduciary as such, and made payable to the fiduciary personally, the takerdoes not have notice of the breach of fiduciary duty unless the taker knows ofthe breach of fiduciary duty.
(4) If an instrument is issued by the represented person orthe fiduciary as such, to the taker as payee, the taker has notice of thebreach of fiduciary duty if the instrument is (i) taken in payment of or assecurity for a debt known by the taker to be the personal debt of thefiduciary, (ii) taken in a transaction known by the taker to be for thepersonal benefit of the fiduciary, or (iii) deposited to an account other thanan account of the fiduciary, as such, or an account of the represented person.