Ch. 91                                     1996 LAWS OF MARYLAND

(1)     "FIDUCIARY" MEANS AN AGENT, TRUSTEE, PARTNER, CORPORATE
OFFICER OR DIRECTOR, OR OTHER REPRESENTATIVE OWING A FIDUCIARY DUTY
WITH RESPECT TO AN INSTRUMENT.

(2)     "REPRESENTED PERSON" MEANS THE PRINCIPAL, BENEFICIARY,
PARTNERSHIP, CORPORATION, OR OTHER PERSON TO WHOM THE DUTY STATED IN
PARAGRAPH (1) IS OWED.

(B) IF (I) AN INSTRUMENT IS TAKEN FROM A FIDUCIARY FOR PAYMENT OR
COLLECTION OR FOR VALUE, (II) THE TAKER HAS KNOWLEDGE OF THE FIDUCIARY
STATUS OF THE FIDUCIARY, AND (III) THE REPRESENTED PERSON MAKES A CLAIM
TO THE INSTRUMENT OR ITS PROCEEDS ON THE BASIS THAT THE TRANSACTION OF
THE FIDUCIARY IS A BREACH OF FIDUCIARY DUTY, THE FOLLOWING RULES APPLY:

(1)     NOTICE OF BREACH OF FIDUCIARY DUTY BY THE FIDUCIARY IS
NOTICE OF THE CLAIM OF THE REPRESENTED PERSON.

(2)     IN THE CASE OF AN INSTRUMENT PAYABLE TO THE REPRESENTED
PERSON OR THE FIDUCIARY AS SUCH, THE TAKER HAS NOTICE OF THE BREACH OF
FIDUCIARY DUTY IF THE INSTRUMENT IS (I) TAKEN IN PAYMENT OF OR AS
SECURITY FOR A DEBT KNOWN BY THE TAKER TO BE THE PERSONAL DEBT OF THE
FIDUCIARY, (II) TAKEN IN A TRANSACTION KNOWN BY THE TAKER TO BE FOR THE
PERSONAL BENEFIT OF THE FIDUCIARY, OR (III) DEPOSITED TO AN ACCOUNT
OTHER THAN AN ACCOUNT OF THE FIDUCIARY, AS SUCH, OR AN ACCOUNT OF THE
REPRESENTED PERSON.

(3)     IF AN INSTRUMENT IS ISSUED BY THE REPRESENTED PERSON OR
THE FIDUCIARY AS SUCH, AND MADE PAYABLE TO THE FIDUCIARY PERSONALLY,
THE TAKER DOES NOT HAVE NOTION OF THE BREACH OF FIDUCIARY DUTY.

(4)     IF AN INSTRUMENT IS ISSUED BY THE REPRESENTED PERSON OR
THE FIDUCIARY AS SUCH, TO THE TAKER AS PAYEE, THE TAKER HAS NOTICE OF THE
BREACH OF FIDUCIARY DUTY IF THE INSTRUMENT IS (I) TAKEN IN PAYMENT OF OR
AS SECURITY FOR A DEBT KNOWN BY THE TAKER TO BE THE PERSONAL DEBT OF
THE FIDUCIARY, (II) TAKEN IN A TRANSACTION KNOWN BY THE TAKER TO BE FOR
THE PERSONAL BENEFIT OF THE FIDUCIARY, OR (III) DEPOSITED TO AN ACCOUNT
OTHER THAN AN ACCOUNT OF THE FIDUCIARY, AS SUCH, OR AN ACCOUNT OF THE
REPRESENTED PERSON.

3-308.

(A) IN AN ACTION WITH RESPECT TO AN INSTRUMENT, THE AUTHENTICITY
OF, AND AUTHORITY TO MAKE EACH SIGNATURE ON THE INSTRUMENT IS
ADMITTED UNLESS SPECIFICALLY DENIED IN THE PLEADINGS. IF THE VALIDITY OF
A SIGNATURE IS DENIED IN THE PLEADINGS, THE BURDEN OF ESTABLISHING
VALIDITY IS ON THE PERSON CLAIMING VALIDITY, BUT THE SIGNATURE IS
PRESUMED TO BE AUTHENTIC AND AUTHORIZED UNLESS THE ACTION IS TO
ENFORCE THE LIABILITY OF THE PURPORTED SIGNER AND THE SIGNER IS DEAD OR
INCOMPETENT AT THE TIME OF TRIAL OF THE ISSUE OF VALIDITY OF THE
SIGNATURE. IF AN ACTION TO ENFORCE THE INSTRUMENT IS BROUGHT AGAINST A
PERSON AS THE UNDISCLOSED PRINCIPAL OF A PERSON WHO SIGNED THE

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