Tennessee Code Annotated
Tenn. Code Ann. § 47-3-307 (2026)
Notice of breach of fiduciary duty
✓ current as of May 2026
- (a) In this section:
- (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 notice of the breach of fiduciary duty unless the taker knows 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.
Acts 1995, ch. 397, § 2.
Notes of Decisions
Cited in 8
cases, 1979–2020 · leading case: C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007).
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
Notredan, LLC v. Old Repub. Exch. Facilitator Co., 875 F. Supp. 2d 780 (W.D. Tenn. 2012). “Tenn.Code Ann. § 47-3-307 applies to a represented person's claim to an instrument on the basis that a fiduciary’s transaction with the instrument is a breach of fiduciary duty.”
Lawyers Title Ins. v. United Am. Bank of Memphis, 21 F. Supp. 2d 785 (W.D. Tenn. 1998). “Tenn. Code Ann. § 47-3-307 cmt.l. Because the amendments were not in effect during the relevant time period, nor when the case was filed, the court will not apply § 47-3-307 in determining these motions.”
Waller, Lansden, Dortch, & Davis v. Haney, 851 S.W.2d 131 (Tenn. 1992). “T.C.A. § 47-3-307(2) provides that when a signature is admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense.”
Pinzer v. Wood, 82 F.R.D. 607 (E.D. Tenn. 1979). “§ 24-506, T.C.A. § 47-3-307(1), and Birdwhistell v.”
Deutscher v. Long (In Re S. Indus. Banking Corp.), 36 B.R. 1010 (Bankr. E.D. Tenn. 1984). “Tenn. Code Ann. § 47-3-307 (1979). Alternatively, he maintains that, assuming the signature was forged, defendant ratified the forgery by retaining the shares of stock after *1013 learning of the forgery.”
Clara Jean West, by & through Janet L. Harvey, Conservator & Est. of Robert Stokes West, by & through Janet L. Harvey, Adm'r v. Regions Bank (Tenn. Ct. App. 2011). “The plaintiff now appeals, arguing that the immunity statute is inapplicable because her claim arose under the UCC, T.C.A. §§ 47-3-307 and 47-3-420. We reverse, finding that T.”
John R. Fuller v. Cmty. Nat'l Bank (2020). “, and Uniform Commercial Code, Tenn. Code Ann. §§ 47-3-307 (b)(2) and 47-3-402(a) (2001).”
— Tenn. Code Ann. § 47-3-307(1) — 1 case
Pinzer v. Wood, 82 F.R.D. 607 (E.D. Tenn. 1979). “§ 24-506, T.C.A. § 47-3-307(1), and Birdwhistell v.”
— Tenn. Code Ann. § 47-3-307(2) — 2 cases
Waller, Lansden, Dortch, & Davis v. Haney, 851 S.W.2d 131 (Tenn. 1992). “T.C.A. § 47-3-307(2) provides that when a signature is admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense.”
Pinzer v. Wood, 82 F.R.D. 607 (E.D. Tenn. 1979). “§ 24-506, T.C.A. § 47-3-307(1), and Birdwhistell v.”
— Tenn. Code Ann. § 47-3-307(a)(2) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
— Tenn. Code Ann. § 47-3-307(a)(l) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
— Tenn. Code Ann. § 47-3-307(b) — 1 case
Clara Jean West, by & through Janet L. Harvey, Conservator & Est. of Robert Stokes West, by & through Janet L. Harvey, Adm'r v. Regions Bank (Tenn. Ct. App. 2011). “The plaintiff now appeals, arguing that the immunity statute is inapplicable because her claim arose under the UCC, T.C.A. §§ 47-3-307 and 47-3-420. We reverse, finding that T.”
— Tenn. Code Ann. § 47-3-307(b)(2) — 1 case
Clara Jean West, by & through Janet L. Harvey, Conservator & Est. of Robert Stokes West, by & through Janet L. Harvey, Adm'r v. Regions Bank (Tenn. Ct. App. 2011). “The plaintiff now appeals, arguing that the immunity statute is inapplicable because her claim arose under the UCC, T.C.A. §§ 47-3-307 and 47-3-420. We reverse, finding that T.”
— Tenn. Code Ann. § 47-3-307(b)(2)(ii) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
— Tenn. Code Ann. § 47-3-307(b)(2)(iii) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
— Tenn. Code Ann. § 47-3-307(b)(ii) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
— Tenn. Code Ann. § 47-3-307(b)(iii) — 1 case
C-Wood Lumber Co. v. Wayne Cnty. Bank, 233 S.W.3d 263 (Tenn. Ct. App. 2007). “Section 3-307 (Tenn.Code Ann. § 47-3-307) is an elaborate statement of the “red flag” circumstances under which the taker from a fiduciary 26 will be deemed to be “on notice” and, therefore, subject to claims of the principal that the fiduciary has misappropriated funds.”
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