Scope.
This Chapter shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it, and it may be cited as the Uniform Law for Simplification of Fiduciary Security Transfers.
1. Definitions
For the purposes of this Chapter, unless the context or subject matter otherwise requires:
a. “Bank” includes any person or association of persons, whether incorporated or not, carrying on the business of banking.
b. “Fiduciary” includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other persons acting in a fiduciary capacity for any person, trust or estate.
c. “Person” includes a corporation, partnership, or other association, or two or more persons having a joint or common interest.
d. “Principal” includes any person to whom a fiduciary as such owes an obligation.
e. A thing is done “in good faith” within they meaning of this Chapter when it is in fact done honestly, whether it be done negligently or not.
2. Payment or transfer to fiduciary; responsibility for proper application
A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.
3. Endorsement of negotiable instrument; duty and liability of endorsee
If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary, or if any negotiable instrument payable or endorsed to his principal is endorsed by a fiduciary empowered to endorse such instrument, on behalf of his principal, the endorsee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in endorsing or delivering the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in transferring the instrument.
4. Payee of check or bill of exchange; duties and liability
If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, the payee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in drawing or delivering the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of, or as security for, a personal debt of the fiduciary, to the actual knowledge of the creditor, or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the instrument.
5. Check or bill of exchange payable to, or transferred to, fiduciary; duties and liability of transferee
If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary, unless he takes the instrument with actual knowledge of such breach, or with the knowledge of such facts that his action in taking the instrument amounts to bad faith.
6. Bank paying check; liability of
If a deposit is made in a bank to the credit of the fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof, upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check, or with the knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such check is payable to the drawee bank and is delivered to it in payment of, or as, security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
7. Check upon principal’s account; liability of bank paying
If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal’s account the bank is authorized to pay any such check without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing such check, or with the knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of, or as security for, a personal debt of the fiduciary to it, the bank is liable to the principal, if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
8. Deposit by fiduciary to his personal credit; duties and liabilities of bank
If a fiduciary makes a deposit in a bank to his personal credit of checks drawn by him upon an account in his own name as fiduciary or of checks payable to him as fiduciary, or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks thereon, or of checks payable to his principal and endorsed by him, if he is empowered to endorse such checks, or if he otherwise makes a deposit of funds held by him as fiduciary, the bank receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of his obligation as fiduciary; and the bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal, unless, the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making such deposit or in drawing such check, or with knowledge of such facts that its action in receiving the deposit or paying the checks amounts to bad faith.
9. Check upon deposit in name of two or more trustees; duties of bank and holder
When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account, by any trustee or trustees, authorized by the other trustee or trustees to draw checks upon the trust account, neither the payee nor other holder, nor the bank, is bound to inquire whether it is a breach of trust to authorize such trustee or trustees to draw checks upon the trust account, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.
19. Cases not provided for; rules applicable
In any case not provided for in this Chapter the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply.
10. Uniform construction
This Chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.
11. Securities Transfers
- Definitions
In this Chapter, unless the context otherwise requires:
a. “Assignment” includes any written stock power, bond power, bill of sale, deed, declaration of trust or other instrument of transfer;
b. “Claim of beneficial interest” includes a claim of any interest by a decedent’s legatee, distributee, heir or creditor, a beneficiary under a trust, a ward, a beneficial owner of a security registered in the name of a nominee, or a minor owner of a security registered in the name of a custodian, or a claim of any similar interest, whether the claim is asserted by the claimant or by a fiduciary or by any other authorized person on his behalf, and includes a claim that the transfer would be in breach of fiduciary duties;
c. “Corporation” means a private or public corporation, association or trust issuing a security;
d. “Fiduciary” means an executor, administrator, trustee, guardian, committee, conservator, curator, tutor, custodian or nominee;
e. “Person” includes an individual, a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal or commercial entity;
f. “Security” includes any share of stock, bond, debenture, note or other security issued by a corporation which is registered as to ownership on the books of the corporation;
g.”Transfer” means a change on the books of a corporation in the registered ownership of a security;
h.”Transfer agent” means a person employed or authorized by a corporation to transfer securities issued by the corporation.
2. Registration in the name of a fiduciary
A corporation or transfer agent registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent, or correct description of the fiduciary relationship, and thereafter the corporation and its transfer agent may assume without inquiry that the newly registered owner continues to be the fiduciary until the corporation or transfer agent receives written notice that the fiduciary is no longer acting as such with respect to the particular security.
3. Assignment by a fiduciary
Except as otherwise provided in this Chapter, a corporation or transfer agent making a transfer of a security pursuant to an assignment by a fiduciary
a. may assume without inquiry that the assignment, even though to the fiduciary himself or to his nominee, is within his authority and capacity and is not in breach of his fiduciary duties;
b. may assume without inquiry that the fiduciary has complied with any controlling instrument and with the law of the jurisdiction governing the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of the transfer; and
c. is not charged with notice of and is not bound to obtain or examine any court record or any recorded or unrecorded document relating to the fiduciary relationship or the assignment, even though the record or document is in its possession.
4. Evidence of appointment or incumbency
A corporation or transfer agent making a transfer pursuant to an assignment by a fiduciary who is not the registered owner shall obtain the following evidence of appointment or incumbency:
A. In the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of that court or an officer thereof and dated within sixty days before the transfer; or
B. In any other case, a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by the corporation or transfer agent to be responsible or, in the absence of such a document or certificate, other evidence reasonably deemed by the corporation or transfer agent to be appropriate. Corporations and transfer agents may adopt standards with respect to evidence of appointment or incumbency under this paragraph (2) provided such standards are not manifestly unreasonable. Neither the corporation nor transfer agent is charged with notice of the contents of any document obtained pursuant to this paragraph (2) except to the extent that the contents relate directly to the appointment or incumbency.
5. Adverse claims
A. A person asserting a claim of beneficial interest adverse to the transfer of a security pursuant to an assignment by a fiduciary may give the corporation or transfer agent written notice of the claim. The corporation or transfer agent is not put on notice unless the written notice identifies the claimant, the registered owner and the issue of which the security is a part, provides an address for communications directed to the claimant and is received before the transfer. Nothing in this Chapter relieves the corporation or transfer agent of any liability for making or refusing to make the transfer after it is so put on notice, unless it proceeds in the manner authorized in Sub-section B of this Section.
B. As soon as practicable after the presentation of a security for transfer pursuant to an assignment by a fiduciary, a corporation or transfer agent which has received notice of a claim of beneficial interest adverse to the transfer may send notice of the presentation by registered or certified mail to the claimant at the address given by him. If the corporation or transfer agent so mails such a notice it shall withhold the transfer for thirty days after the mailing and shall then make the transfer unless restrained by a court order.
6. Non-liability of corporation and transfer agent
A corporation or transfer agent incurs no liability to any person by making a transfer or otherwise acting in a manner authorized by this Chapter.
7. Non-liability of third persons
A. No person who participates in the acquisition, disposition, assignment or transfer of a security by or to a fiduciary including a person who guarantees the signature of the fiduciary is liable for participation in any breach of fiduciary duty by reason of failure to inquire whether the transaction involves such a breach unless it is shown that he acted with actual knowledge that the proceeds of the transaction were being or were to be used wrongfully for the individual benefit of the fiduciary or that the transaction was otherwise in breach of duty.
B. If a corporation or transfer agent makes a transfer pursuant to an assignment by a fiduciary, a person who guaranteed the signature of the fiduciary is not liable on the guarantee to any person to whom the corporation or transfer agent incurs no liability by reason of this Chapter.
C. This Section does not impose any liability upon the corporation or its transfer agent
8. Territorial application
A. The rights and duties of a corporation and its transfer agents in registering a security in the name of a fiduciary or in making a transfer of a security pursuant to an assignment by a fiduciary are governed by the law of the jurisdiction under whose laws the corporation is organized.
B. This Chapter applies to the rights and duties of a person other than the corporation and its transfer agents with regard to acts and omissions in Louisiana in connection with the acquisition, disposition, assignment or transfer of a security by or to a fiduciary and of a person who guarantees in Louisiana the signature of a fiduciary in connection with such a transaction.
9. Tax obligations
This Chapter does not affect any obligation of a corporation or transfer agent with respect to taxes imposed by the laws of Louisiana.
10. Express mandate between spouses; revocation
An express mandate from one spouse to another authorizing transactions with a specified creditor may be revoked only by delivery of written revocation to the creditor.
11. Action to Review the Acts of a Fiduciary
A. Who may file; petition contents; service; venue
B. When a principal is a natural person for whom a curator with appropriate authority has not qualified, any of the following persons may petition a court on behalf of the principal to review the acts of the principal’s mandatary and to grant relief authorized by this Chapter:
(1) A person authorized to make healthcare decisions for the principal.
(2) A spouse, a parent, or a descendant of the principal.
(3) A presumptive heir or legatee of the principal.
(4) A person named as a beneficiary to receive any real or personal right upon the death of the principal.
(5) A trustee or beneficiary of an inter vivos or testamentary trust created by or for the principal
(6) A caregiver of the principal.
(7) Any other person with sufficient interest in the welfare of the principal.
C. The petition shall be verified and shall name as defendants the principal, the mandatary, and any other person against whom relief is sought. The petition shall state with particularity the facts establishing the petitioner’s right to bring the action, the reasons that a review of the acts of the mandatary is needed, and the relief sought.
D. The principal shall be personally served with the citation and petition. Service on the principal through a mandatary shall not be effective.
E. The action shall be filed in the parish / County where the principal is domiciled, where the principal resides if without a domicile in this state, or where the principal is physically present or where immovable property of the principal is located if the principal is without either a domicile or a residence in this state.
F. On motion of any interested person or on its own motion, the court may review the acts of a mandatary and for good cause, grant any relief provided in R.S. 9:3854 or Code of Civil Procedure Article 3605. Good cause shall include but not be limited to a violation of Civil Code Article 299
12. Dismissal upon motion to dismiss filed by the principal
A. If the principal files a motion to dismiss the action, the principal shall testify in person at the hearing on the motion or, with the agreement of the parties or for good cause shown, by visual remote technology or by deposition.
B. The court shall grant the principal’s motion to dismiss the action if it finds that the principal is able to comprehend generally the nature and consequences of the acts of the mandatary and that the mandatary’s authority to act is not the result of fraud, duress, or undue influence.
13. Substitution
Upon the interdiction or death of the principal, the court shall allow a curator with appropriate authority or the principal’s legal successor to be substituted for the plaintiff.
14. Relief
A. If the court finds that a mandatary has violated a duty or failed to perform any obligation as a mandatary, the court may:
(1) Grant any relief to which the principal is entitled.
(2) Enjoin the mandatary from exercising all or some of the powers granted by the mandate.
B. While the action is pending, the court may do any of the following:
(1) Order an accounting from the mandatary.
(2) Order, without first holding a contradictory hearing, a financial institution, a healthcare provider, or any other person to provide the financial, medical, or other information of any defendant to the action.
(3) Appoint a qualified person to investigate the allegations of the petition and to report the findings.
(4) On its own motion, order other appropriate discovery.
(5) Enjoin the mandatary from exercising all or some of the powers granted by the mandate during the pendency of the action.
(6) Appoint a person to exercise some or all of the authority granted by the mandate, including authority to perform routine financial transactions and to make healthcare decisions, if there is no successor or substitute mandatary named in the mandate who is able or willing to serve, or if no law otherwise provides a person to act.
C. In reaching its decision, the court shall consider the mandate and may consider any other relevant factors, including any of the following:
(1) The expressed wishes of the principal.
(2) The known or reasonable expectations of the principal.
(3) The best interests of the principal.
(4) Any will, trust, or beneficiary designation executed by the principal.
(5) The principal’s history or pattern of donations inter vivos.
(6) Physical, financial, or psychological abuse of the principal.
(7) Fraud, duress, or undue influence.
(8) The principal’s regular contact with family and friends other than the mandatary.
(9) The ability of the principal to comprehend generally the nature and consequences of the acts of the mandatary.
(10) The donee’s knowledge or imputed knowledge that a donation was not for the benefit or gratification of the principal.
(11) The good or bad faith of a defendant.
D. Unauthorized acts by or with the consent of a mandatary are subject to injunctive relief without a showing of irreparable injury.
ยง3855. Payment of costs and attorney fees
The court may render judgment for costs and attorney fees, or any part thereof, against any party. Nevertheless, costs or attorney fees shall not be awarded to a petitioner when the petition is dismissed on the merits.
15. Applicability
A. The fiduciary in capacity of mandate applies to a procuration and a representative in the same manner as it applies to a mandate and a mandatary, respectively, and allows an action against a representative for violating any duty or failing to fulfill any obligation in the procuration.
B. This Fiduciary does not apply to a mandate to the extent that the mandate is irrevocable as provided by law
