250

LAWS OF MARYLAND

[Ch. 49

(1)    A person who presents a security for
registration of transfer or for payment or exchange
warrants to the issue that he is entitled to the
registration, payment or exchange. But a purchaser for
value without notice of adverse claims who receives a
new, reissued or reregistered security on registration of
transfer warrants only that he has no knowledge of any
unauthorized signature (§ 8—311) in a necessary
indorsement.

(2)    A person by transferring a security to a
purchaser for value warrants only that

(a) His transfer is effective and rightful;
and

(b) The security is genuine and has not been
materially altered; and

(c) He knows no fact which might impair the
validity of the security.

(3)     there a security is delivered by an
intermediary known to be entrusted with delivery of the
security on behalf of another or with collection of a
draft or other claim against such delivery, the
intermediary by such delivery warrants only his own good
faith and authority even though he has purchased or made
advances against the claim to be collected against the
delivery.

(4) A pledgee or other holder for security who
redelivers the security received, or after payment and on
order of the debtor delivers that security to a third
person makes only the warranties of an intermediary under
subsection (3).

(5) A broker gives to his customer and to the
issuer and a purchaser the warranties provided in this
section and has the rights and privileges of a purchaser
under this section. The warranties of and in favor of
the broker acting as an agent are in addition to
applicable warranties given by and in favor of his
customer.

8—307. Effect of delivery without indorsement; right to
compel indorsement.

Where a security in registered form has been
delivered to a purchaser without a necessary indorsement
he may become a bona fide purchaser only as of the time
the indorsement is supplied, but against the transferor
the transfer is complete upon delivery and the purchaser
has a specifically enforceable right to have any