Okla. Stat. tit. 12A § 8-303
Okla. Stat. tit. 12A, § 8-303
Oklahoma Code Comment
This Section is a total revision of former Section 8-302 . The prior section used the term "bona fide purchaser" as a purchaser for value in good faith and without notice of any adverse claim. This Section replaces "bona fide purchaser" with "protected purchaser." A protected purchaser means a purchaser of a security who gives value, does not have notice of any adverse claim, and obtains control over the security. The absence of a requirement of good faith is deliberate.
The prior "bona fide purchaser" standard was similar to the requirements for a holder in due course of a negotiable instrument under the 1961 version of Section 3-302 , except there was no requirement that the instrument be complete and regular upon its face or a requirement that it be taken before maturity. Pre-Code cases required that municipal bonds be treated as any other negotiable instrument and the purchaser was required to purchase the bonds before maturity to obtain the status of a holder in due course. See Mays v. Bd. of County Comm'rs, 164 Okla. 231, 23 P.2d 664 (1933); Weems v. Town of Covington, 167 Okla. 443, 30 P.2d 462 (1934). See also State ex rel. Leecraft v. Incorporated Town of Hoffman, 127 Okla. 101, 260 P. 12 (1927).
Where a seller of stock gave notice to third-party purchasers prior to their purchase of stock from the defendant that the seller asserted a claim to the stock because of the defendant's fraud, the third parties were not bona fide purchasers and stood in no better position than did the defendant purchaser of stock from the seller. See Sellers v. Sellers, 428 P.2d 230, 239 (Okla. 1967). Pre-revision Article 8 used the term "bona fide purchaser" to connote an innocent purchaser who took free of adverse claims. The 1995 revisions eliminated this term, but the principle is carried forward using the concept of a "protected purchaser" who takes free of adverse claims absent a "notice of adverse claim." See UCC §§ 8-105 and 8-303. Thus, the substantive holding in Sellers remains valid despite the change in terminology.
Several cases in other jurisdictions have interpreted what constituted notice to the purchaser of adverse claims under former Section 8-304 . For example, receipt of notification that the particular security has been lost or stolen raises the question of notice that was "forgotten" in good faith. See Kentucky Rock Asphalt v. Mazza's Adm'r, 264 Ky. 158, 94 S.W.2d 316 (1936); Graham v. White-Phillips Co., 296 U.S. 27 , 56 S.Ct. 21, 80 L. Ed. 20 (1935). But cf. First Nat'l Bank v. Fazzari, 10 N.Y.2d 394, 179 N.E.2d 493 (1961). Also, suspicious characteristics of the transaction may give a purchaser (particularly a commercially sophisticated purchaser such as a broker) "reason to know." See U.S.F. & G. Co. v. Goetz, 285 N.Y. 74, 32 N.E.2d 798 (1941); Morris v. Muir, 111 Misc. 739, 180 N.Y.S. 913 (1920). Mere notice of the existence of a fiduciary relationship is not enough in itself to prevent a bona fide purchase, and the purchaser is free to take the security on the assumption that the fiduciary is acting properly. The fact that the security may be transferred to the fiduciary's individual account or the proceeds of the transaction are paid into that account in cash would not be sufficient to charge the purchaser with notice of a potential breach of a fiduciary obligation. However, as in State Bank of Binghamton v. Bache, 162 Misc. 128, 293 N.Y.S. 667 (1937), knowledge that the proceeds are being applied to the fiduciary's personal indebtedness will charge the purchaser with such notice. These cases must be measured against the requirements of Article 8, as well.
Prior Statutory Provisions:
48 Okla. Stat. §§ 122-124, 126-129 (1910).
See also 48 Okla. Stat. § 88 (1910).
Pre-revision UCC Sections 8-302 , 8-304 , 8-305 .