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(810 ILCS 5/8-306) (from Ch. 26, par. 8-306)
Sec. 8-306.
Effect of guaranteeing signature,
indorsement, or instruction.
(a) A person who guarantees a signature of an indorser of a
security certificate warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to indorse, |
| or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and
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(3) the signer had legal capacity to sign.
(b) A person who guarantees a signature of the originator of an
instruction warrants that at the time of signing:
(1) the signature was genuine;
(2) the signer was an appropriate person to originate
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| the instruction, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, if the person specified in the instruction as the registered owner was, in fact, the registered owner, as to which fact the signature guarantor does not make a warranty; and
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(3) the signer had legal capacity to sign.
(c) A person who specially guarantees the signature of an originator
of an instruction makes the warranties of a signature guarantor under
subsection (b) and also warrants that at the time the instruction is presented
to the issuer:
(1) the person specified in the instruction as the
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| registered owner of the uncertificated security will be the registered owner; and
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(2) the transfer of the uncertificated security
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| requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction.
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(d) A guarantor under subsections (a) and (b) or a special
guarantor under subsection (c) does not otherwise warrant the rightfulness
of the transfer.
(e) A person who guarantees an indorsement of a security
certificate makes the warranties of a signature guarantor under subsection
(a) and also warrants the rightfulness of the transfer in all respects.
(f) A person who guarantees an instruction requesting the transfer
of an uncertificated security makes the warranties of a special signature
guarantor under subsection (c) and also warrants the rightfulness of the
transfer in all respects.
(g) 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.
(h) The warranties under this Section are made to a person taking
or dealing with the security in reliance on the guaranty, and the guarantor is
liable to the person for loss resulting from their breach. An indorser or
originator of an instruction whose signature, indorsement, or instruction has
been guaranteed is liable to a guarantor for any loss suffered by the
guarantor as a result of breach of the warranties of the guarantor.
(Source: P.A. 89-364, eff. 1-1-96.)
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