400.3-307. Notice of breach of fiduciary duty.
Notice of breach of fiduciary duty.
400.3-307. (a) In this section:
(1) "Fiduciary" means an agent, trustee, partner, corporateofficer or director, or other representative owing a fiduciaryduty with respect to an instrument.
(2) "Represented person" means the principal, beneficiary,partnership, corporation, or other person to whom the duty statedin paragraph (1) is owed.
(b) If (i) an instrument is taken from a fiduciary forpayment or collection or for value, (ii) the taker has knowledgeof the fiduciary status of the fiduciary, and (iii) therepresented person makes a claim to the instrument or itsproceeds 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 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 thebreach of fiduciary duty if the instrument is (i) taken inpayment of or as security for a debt known by the taker to be thepersonal debt of the fiduciary, or (ii) taken in a transactionknown by the taker to be for the personal benefit of thefiduciary.
(3) If an instrument is issued by the represented person orthe fiduciary as such, and made payable to the fiduciarypersonally, the taker does not have notice of the breach offiduciary duty unless the taker knows of the breach of fiduciaryduty.
(4) If an instrument is issued by the represented person orthe fiduciary as such, to the taker as payee, the taker hasnotice of the breach of fiduciary duty if the instrument is (i)taken in payment of or as security for a debt known by the takerto be the personal debt of the fiduciary, or (ii) taken in atransaction known by the taker to be for the personal benefit ofthe fiduciary.
(L. 1992 S.B. 448, A.L. 1994 S.B. 701)*No continuity with § 400.3-307 as repealed by L. 1992 S.B. 448.