California Commercial Code 8105 – (a) A person has notice of an adverse claim if any of the …
(a) A person has notice of an adverse claim if any of the following applies:
(1) The person knows of the adverse claim.
Terms Used In California Commercial Code 8105
- Bearer: means a person in possession of a negotiable instrument, document of title, or certificated security that is payable to bearer or endorsed in blank. See California Commercial Code 1201
- Money: means a medium of exchange that is currently authorized or adopted by a domestic or foreign government. See California Commercial Code 1201
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
- Purchaser: means a person that takes by purchase. See California Commercial Code 1201
- Representative: means a person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor, or administrator of an estate. See California Commercial Code 1201
- Right: includes remedy. See California Commercial Code 1201
- Statute: A law passed by a legislature.
- Writing: includes printing, typewriting, or any other intentional reduction to tangible form. See California Commercial Code 1201
(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.
(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 either of the following:
(1) One year after a date set for presentment or surrender for redemption or exchange.
(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 is any of the following:
(1) Whether in bearer or registered form, has been endorsed “for collection” or “for surrender” or for some other purpose not involving transfer.
(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 Division 9 (commencing with Section 9101) is not notice of an adverse claim to a financial asset.
(Repealed and added by Stats. 1996, Ch. 497, Sec. 9. Effective January 1, 1997.)