24.40.120 Effect of Guaranteeing Signature, Endorsement or Instruction

(a) Any person guaranteeing a signature of an endorser of a certificated security warrants that at the time of signing:

(1) the signature was genuine;

(2) the signer was an appropriate person to endorse (Section 24.40.080); and

(3) the signer had legal capacity to sign.

(b) Any person guaranteeing 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 the instruction if the person specified in the instruction as the registered owner or registered pledgee of the uncertificated security was, in fact, the registered owner or registered pledgee of such security, as to which fact the signature guarantor makes no warranty;

(3) the signer had legal capacity to sign; and

(4) the taxpayer identification number, if any, appearing on the instruction as that of the registered owner or registered pledgee was the taxpayer identification number of the signer or of the owner or pledgee for whom the signer was acting.

(c) Any person specially guaranteeing the signature of the originator of an instruction makes not only the warranties of a signature guarantor (Subsection (b)) but also warrants that at the time the instruction is presented to the issuer:

(1) the person specified in the instruction as the registered owner or registered pledgee of the uncertificated security will be the registered owner or registered pledgee; and

(2) the transfer, pledge, or release of the uncertificated security 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.

(d) The guarantor under Subsections (a) and (b) or the special guarantor under Subsection (c) does not otherwise warrant the rightfulness of the particular transfer, pledge, or release.

(e) Any person guaranteeing an endorsement of a certificated security makes not only the warranties of a signature guarantor under Subsection (a) but warrants the rightfulness of the particular transfer in all respects.

(f) Any person guaranteeing an instruction requesting the transfer, pledge, or release of an uncertificated security makes not only the warranties of a special signature guarantor under Subsection (c) but also warrants the rightfulness of the particular transfer, pledge, or release in all respects.

(g) No issuer may require a special guarantee of signature (subsection (c)), a guarantee of endorsement (subsection (e)), or a guarantee of instruction (subsection (f)) as a condition to registration of transfer, pledge or release.

(h) The foregoing warranties are made to any person taking or dealing with the security in reliance on the guarantee, and the guarantor is liable to the person for any loss resulting from breach of the warranties.