8.3A-307 - A-307. Notice of breach of fiduciary duty.
§ 8.3A-307. Notice of breach of fiduciary duty.
(a) In this section:
(1) "Fiduciary" means an agent, trustee, partner, corporate officer ordirector, or other representative owing a fiduciary duty with respect to aninstrument.
(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 for payment or collectionor for value, (ii) the taker has knowledge of the fiduciary status of thefiduciary, and (iii) the represented person makes a claim to the instrumentor its proceeds on the basis that the transaction of the fiduciary is abreach of fiduciary duty, the following rules apply:
(1) Notice of breach of fiduciary duty by the fiduciary is notice of theclaim of the represented person.
(2) In the case of an instrument payable to the represented person or thefiduciary as such, the taker has notice of the breach of fiduciary duty ifthe instrument is (i) taken in payment of or as security for a debt known bythe taker to be the personal debt of the fiduciary, (ii) taken in atransaction 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 or the fiduciary assuch, and made payable to the fiduciary personally, the taker does not havenotice of the breach of fiduciary duty unless the taker knows of the breachof fiduciary duty.
(4) If an instrument is issued by the represented person or the fiduciary assuch, to the taker as payee, the taker has notice of the breach of fiduciaryduty if the instrument is (i) taken in payment of or as security for a debtknown by the taker to be the personal debt of the fiduciary, (ii) taken in atransaction 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.
(Code 1950, § 6-408; 1964, c. 219, § 8.3-304; 1992, c. 693.)