§ 25-8-402. Assurance that indorsement or instruction is effective. - North Carolina Statutes

§ 25‑8‑402. Assurance that indorsement or instruction is effective.

(a)        An issuer mayrequire the following assurance that each necessary indorsement or eachinstruction is genuine and authorized:

(1)        In all cases, aguaranty of the signature of the person making an indorsement or originating aninstruction including, in the case of an instruction, reasonable assurance ofidentity;

(2)        If the indorsementis made or the instruction is originated by an agent, appropriate assurance ofactual authority to sign;

(3)        If the indorsementis made or the instruction is originated by a fiduciary pursuant to G.S. 25‑8‑107(a)(4)or G.S. 25‑8‑107(a)(5), appropriate evidence of appointment orincumbency;

(4)        If there is morethan one fiduciary, reasonable assurance that all who are required to sign havedone so; and

(5)        If the indorsementis made or the instruction is originated by a person not covered by anotherprovision of this subsection, assurance appropriate to the case correspondingas nearly as may be to the provisions of this subsection.

(b)        An issuer may electto require reasonable assurance beyond that specified in this section.

(c)        In this section:

(1)        "Guaranty ofthe signature" means a guaranty signed by or on behalf of a personreasonably believed by the issuer to be responsible. An issuer may adoptstandards with respect to responsibility if they are not manifestlyunreasonable.

(2)        "Appropriateevidence of appointment or incumbency" means:

(i)         In the case of afiduciary appointed or qualified by a court, a certificate issued by or underthe direction or supervision of the court or an officer thereof and datedwithin 60 days before the date of presentation for transfer; or

(ii)        In any other case,a copy of a document showing the appointment or a certificate issued by or onbehalf of a person reasonably believed by an issuer to be responsible or, inthe absence of that document or certificate, other evidence the issuerreasonably considers appropriate. (1965, c. 700, s. 1; 1989, c.588, s. 1; 1997‑181, s. 1.)