O.C.G.A.

O.C.G.A. § 11-3-307 (2019)

Notice of breach of fiduciary duty

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)

Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.

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(a) In this Code section: (1) “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument; and (2) “Represented person” means the principal, beneficiary, partnership, corporation, or other person to whom the duty stated in paragraph (1) of subsection (a) of this Code section is owed. (b) If an instrument is taken from a fiduciary for payment or collection or for value, the taker has knowledge of the fiduciary status of the fiduciary, and 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; and (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 notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty; and (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.

History

Code 1981, § 11-3-307, enacted by Ga. L. 1996, p. 1306, § 3.

Annotations

JUDICIAL DECISIONS Accord and satisfaction. - Accord and satisfaction must be set forth in pleading to a preceding pleading; where not pleaded, it is waived. George v. Rob-

erts, 220 Ga. App. 583, 469 S.E.2d 249, 1996 Ga. App. LEXIS 93 (1996), cert. denied, No. S96C1052, 1996 Ga. LEXIS 837 (Ga. May 17, 1996).

RESEARCH REFERENCES U.L.A. Uniform Commercial Code (U.L.A.) § 3307.

Notes of Decisions

Cited in 29 cases, 1983–1999 · leading case: Fabe v. Floyd, 405 S.E.2d 265 (Ga. Ct. App. 1991).

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Fabe v. Floyd, 405 S.E.2d 265 (Ga. Ct. App. 1991). · cites it 4× “While a party in Fabe's position is entitled ordinarily to rely on the notarized signature to sue on an agreement such as this, the evidence shows that Fabe knew months before he field this action that Floyd denied both knowing anything about or having signed the agreement and…”

Bradley v. Tattnall Bank, 318 S.E.2d 657 (Ga. Ct. App. 1984). · cites it 4× “This is consistent with our Commercial Code, OCGA § 11-3-307 (2), which states: "When signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense.”

Brooks v. McCorkle, 329 S.E.2d 214 (Ga. Ct. App. 1985). · cites it 6× “§ 109A-3 — 307 (2, 3) [now OCGA § 11-3-307]. As between the immediate parties to a note, it may be shown that its terms were modified or affected by other *133 written agreement executed as a part of the same transaction.”

Southtrust Bank of Georgia v. Parker, 486 S.E.2d 402 (Ga. Ct. App. 1997). · cites it 6× “Under OCGA § 11-3-307 (1), “[u]nless specifically denied in the pleadings each signature on an instrument is admitted.”

Hovendick v. Presidential Fin. Corp., 497 S.E.2d 269 (Ga. Ct. App. 1998). · cites it 4× “In their defense, appellants claim their attorney told them he was a board member of Milton Bank and could get them a line of credit with Milton.”

Bank South v. Jones, 364 S.E.2d 281 (Ga. Ct. App. 1987). · cites it 4× “OCGA § 11-3-307 provides that "(2) [w]hen signatures are admitted or established, production of the instrument entitled a holder to recover on it unless the defendant establishes a defense.”

Rodgers v. First Union Nat. Bank of Georgia, 470 S.E.2d 246 (Ga. Ct. App. 1996). · cites it 2× “” OCGA § 11-3-307 (2). Because the evidence *822 indisputably shows that First Union established a prima facie right to the judgment it sought on the notes, we need examine only whether Rodgers raised any defense to preclude summary judgment.”

Commonwealth Land Title Ins. v. Miller, 395 S.E.2d 243 (Ga. Ct. App. 1990). · cites it 2× “OCGA § 11-3-307 (2). In the instant case, [Commonwealth] introduced the note, established its authenticity, and therefore, had a prima facie right as a matter of law to the face amount of the note and specified interest.”

Sadler v. Trust Co. Bank, 344 S.E.2d 694 (Ga. Ct. App. 1986). · cites it 2× “OCGA § 11-3-307 (2). In the instant case, the bank introduced the note, established its authenticity, and therefore, had a prima facie right as a matter of law to the face amount of the note and specified interest.”

Jay Gleason Advert. Serv., Inc. v. Gleason, 388 S.E.2d 43 (Ga. Ct. App. 1989). · cites it 2× “” OCGA § 11-3-307 (2). The evidence in the record shows the promissory note was duly executed and that defendant is in default.”

Dixie Diners Atlanta, Inc. v. GWINNETT Fed. BANK, FSB., 439 S.E.2d 53 (Ga. Ct. App. 1993). · cites it 2× “See OCGA § 11-3-307. The burden shifted to defendants to establish an affirmative defense.”

Sawgrass Builders, Inc. v. Realty Coop., Inc., 323 S.E.2d 243 (Ga. Ct. App. 1984). · cites it 2× “As proof of either defense, it emphasizes the two percent commission discrepancy in the closing statements and the actual sales contracts, and the variance between the sales contracts regarding the liability for broker’s commissions.”

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