Michigan Laws 440.8105 – Notice of adverse claim
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(1) A person has notice of an adverse claim if 1 or more of the following apply:
(a) The person knows of the adverse claim.
Terms Used In Michigan Laws 440.8105
- Adverse claim: means a claim that a claimant has a property interest in a financial asset and that it is a violation of the rights of the claimant for another person to hold, transfer, or deal with the financial asset. See Michigan Laws 440.8102
- Bearer: means a person in control of a negotiable electronic document of title or a person in possession of an instrument, a negotiable tangible document of title, or a certificated security payable to bearer or indorsed in blank. See Michigan Laws 440.1201
- Certificated security: means a security that is represented by a certificate. See Michigan Laws 440.8102
- Financial asset: except as otherwise provided in section 8103, means 1 or more of the following:
(i) A security. See Michigan Laws 440.8102Money: means a medium of exchange authorized or adopted by a domestic or foreign government. See Michigan Laws 440.1201 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, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201 Purchaser: means a person that takes by purchase. See Michigan Laws 440.1201 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 Michigan Laws 440.1201 Right: includes remedy. See Michigan Laws 440.1201 Security: except as otherwise provided in section 8103, means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer and is all of the following:
(i) Represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer. See Michigan Laws 440.8102Security certificate: means a certificate representing a security. See Michigan Laws 440.8102 Statute: A law passed by a legislature. writing: includes printing, typewriting, or any other intentional reduction to tangible form. See Michigan Laws 440.1201
(b) 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.
(c) 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.
(2) Having knowledge that a financial asset or interest in a financial asset 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 in a financial asset 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.
(3) 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 that meets either of the following:
(a) Is more than 1 year after a date set for presentment or surrender for redemption or exchange.
(b) Is more than 6 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.
(4) A purchaser of a certificated security has notice of an adverse claim if the security certificate applies to 1 of the following:
(a) Whether in bearer or registered form, has been indorsed “for collection” or “for surrender” or for some other purpose not involving transfer.
(b) 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.
(5) Filing of a financing statement under article 9 is not notice of an adverse claim to a financial asset.