70A-8-306 - Effect of guaranteeing signature, indorsement, or instruction. - Utah Statutes

70A-8-306. Effect of guaranteeing signature, indorsement, or instruction.
(1) A person who guarantees a signature of an indorser of a security certificate warrantsthat at the time of signing:
(a) the signature was genuine;
(b) the signer was an appropriate person to indorse, or if the signature is by an agent, theagent had actual authority to act on behalf of the appropriate person; and
(c) the signer had legal capacity to sign.
(2) A person who guarantees a signature of the originator of an instruction warrants thatat the time of signing:
(a) the signature was genuine;
(b) the signer was an appropriate person to originate the instruction, or if the signature isby an agent, the agent had actual authority to act on behalf of the appropriate person, if the personspecified in the instruction as the registered owner was, in fact, the registered owner, as to whichfact the signature guarantor does not make a warranty; and
(c) the signer had legal capacity to sign.
(3) A person who specially guarantees the signature of an originator of an instructionmakes the warranties of a signature guarantor under Subsection (2) and also warrants that at thetime the instruction is presented to the issuer:
(a) the person specified in the instruction as the registered owner of the uncertificatedsecurity will be the registered owner; and
(b) the transfer of the uncertificated security requested in the instruction will be registeredby the issuer free from all liens, security interests, restrictions, and claims other than thosespecified in the instruction.
(4) A guarantor under Subsection (1) and (2) or a special guarantor under Subsection (3)does not otherwise warrant the rightfulness of the transfer.
(5) A person who guarantees an indorsement of a security certificate makes thewarranties of a signature guarantor under Subsection (1) and also warrants the rightfulness of thetransfer in all respects.
(6) A person who guarantees an instruction requesting the transfer of an uncertificatedsecurity makes the warranties of a special signature guarantor under Subsection (3) and alsowarrants the rightfulness of the transfer in all respects.
(7) An issuer may not require a special guaranty of signature, a guaranty of indorsement,or a guaranty of instruction as a condition to registration of transfer.
(8) The warranties under this section are made to a person taking or dealing with thesecurity in reliance on the guaranty, and the guarantor is liable to the person for loss resultingfrom their breach. An indorser or originator of an instruction whose signature, indorsement, orinstruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor as aresult of breach of the warranties of the guarantor.

Repealed and Re-enacted by Chapter 204, 1996 General Session