Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)
Assented to 2009-06-23
Marginal note:Guarantee of intermediary
75. An intermediary delivering a debt obligation to a purchaser who knows that the intermediary is an intermediary guarantees only its good faith.
Marginal note:Guarantee of broker
76. A broker shall give to a customer, to the issuer and to a purchaser the guarantees provided in sections 73 to 75 and has the rights and privileges of a purchaser under those sections, and those guarantees of and in favour of the broker acting as an agent or mandatary are in addition to guarantees given by the customer and guarantees given in favour of the customer.
Marginal note:Right to compel endorsement
77. If a registered debt obligation is delivered to a purchaser without a necessary endorsement, the purchaser has the right to demand the endorsement. The purchaser becomes a good faith purchaser after the endorsement.
Definition of “appropriate”
78. (1) In section 79, subsections 86(1) and 94(1) and section 98, “appropriate”, with respect to a person, means that the person is
(a) the person who is specified by the debt obligation or by a special endorsement to be entitled to the debt obligation;
(b) if the person described in paragraph (a) is described as a fiduciary but is no longer serving as one, either that person or their successor;
(c) if the debt obligation or endorsement mentioned in paragraph (a) specifies more than one person as fiduciaries and one or more of those persons is no longer a fiduciary, the remaining fiduciary or fiduciaries, whether or not a successor has been appointed or qualified;
(d) if the person described in paragraph (a) is an individual and is without capacity to act by reason of death, minority or other incapacity, the person’s fiduciary;
(e) if the debt obligation or endorsement mentioned in paragraph (a) specifies more than one person with a right of survivorship and by reason of death not all of the persons can sign, the survivor or survivors;
(f) a person who has the legal power to sign; or
(g) to the extent that a person described in any of paragraphs (a) to (f) may act through an agent or mandatary, the person’s authorized agent or mandatary.
Marginal note:Time for determination
(2) The authority of a person signing is determined as of the time of signing.
79. (1) An endorsement of a debt obligation in registered form for the purposes of assignment or transfer is made when an appropriate person signs either the debt obligation or a separate document, or when the signature of an appropriate person is written without more on the back of the debt obligation.
Marginal note:Blank or special
(2) An endorsement may be in blank or special.
Marginal note:Blank endorsement
(3) An endorsement in blank includes an endorsement to bearer.
Marginal note:Special endorsement
(4) A special endorsement specifies the person to whom the debt obligation is to be transferred or who has power to transfer it.
Marginal note:Right of holder
(5) A holder may convert an endorsement in blank into a special endorsement.
Marginal note:Immunity of endorser
80. Unless agreed otherwise, the endorser does not, by the endorsement, assume any obligation that the debt obligation will be honoured by the issuer.
Marginal note:Partial endorsement
81. An endorsement purporting to be an endorsement of only part of a debt obligation representing units intended by the issuer to be separately transferable is effective to the extent of the endorsement.
Marginal note:Effect of failure by fiduciary to comply
82. Failure of a fiduciary to comply with the document that is the source of the fiduciary’s power or with the law of the jurisdiction governing the fiduciary relationship does not render the fiduciary’s endorsement unauthorized for the purposes of this Part.
Marginal note:Effect of endorsement
83. An endorsement of a debt obligation does not constitute a transfer until delivery of the debt obligation on which it appears or, if the endorsement is on a separate document, until delivery of both the debt obligation and the document.
Marginal note:Endorsement in bearer form
84. An endorsement of a debt obligation in bearer form may give notice of an adverse claim under section 69 but does not otherwise affect any of the holder’s rights.
Marginal note:Effect of unauthorized endorsement
85. (1) The owner of a debt obligation may assert the ineffectiveness of an endorsement against the issuer or a purchaser, other than a purchaser for value without notice of an adverse claim who has in good faith received a new, reissued or re-registered debt obligation on registration of transfer, unless the owner
(a) has ratified an unauthorized endorsement of the debt obligation; or
(b) is otherwise precluded from impugning the effectiveness of an unauthorized endorsement.
Marginal note:Liability of issuer
(2) An issuer who registers the transfer of a debt obligation on an unauthorized endorsement is liable for improper registration.
Marginal note:Warranties of guarantor of signature
86. (1) A person who guarantees the signature of an endorser of a debt obligation warrants that, at the time of signing, the signer was an appropriate person to endorse and the signature was genuine.
Marginal note:Limitation of liability
(2) A person who guarantees the signature of an endorser does not otherwise warrant the rightfulness of the transfer to which the signature relates.
Marginal note:Warranties of guarantor of endorsement
(3) A person who guarantees the endorsement of a debt obligation warrants both the signature and the rightfulness, in all respects, of the transfer to which the signature relates, but an issuer may not require a guarantee of endorsement as a condition to registration of transfer.
Marginal note:Extent of liability
(4) If a guarantee referred to in subsection (1) or (3) is made to any person who, relying on the guarantee, takes or deals with the debt obligation, the guarantor is liable to the person for any loss resulting from breach of warranty.
Marginal note:Presumption of delivery
87. Delivery of a debt obligation to a purchaser occurs when
(a) the purchaser or a person designated by the purchaser acquires possession of it;
(b) the purchaser’s broker acquires possession of a debt obligation specially endorsed to or issued in the name of the purchaser;
(c) the purchaser’s broker sends the purchaser confirmation of the purchase and the broker in the broker’s records identifies a specific debt obligation as belonging to the purchaser; or
(d) in respect of an identified debt obligation to be delivered while still in the possession of a third person, that person acknowledges that it is held for the purchaser.
Marginal note:Presumption of ownership
88. (1) A purchaser is the owner of a debt obligation held for the purchaser by a broker, but a purchaser is not a holder except in the cases described in paragraphs 87(b) and (c).
Marginal note:Ownership of part of fungible bulk
(2) If a debt obligation is part of a fungible bulk, by nature or usage of trade, a purchaser of the debt obligation is the owner of the proportionate share in the bulk.
Marginal note:Notice to debt obligations broker of adverse claim
(3) Notice of an adverse claim received by a broker or by a purchaser after the broker takes delivery as a holder for value is not effective against the broker or the purchaser, except that, as between the broker and the purchaser, the purchaser may demand delivery of an equivalent debt obligation in respect of which no notice of an adverse claim has been received.
Marginal note:Delivery of debt obligation
89. (1) Unless agreed otherwise, if a sale of a debt obligation is made through brokers, on a stock exchange or otherwise,
(a) the selling customer fulfils their duty to deliver when the customer delivers the debt obligation to the selling broker or to a person designated by the selling broker or when they cause an acknowledgement to be made to the selling broker that the debt obligation is held for the selling broker; and
(b) the selling broker, including a correspondence broker, acting for a selling customer fulfils their duty to deliver by delivering the debt obligation or a similar debt obligation to the buying broker or to a person designated by the buying broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.
Marginal note:Duty to deliver
(2) Except as provided otherwise in this section and unless agreed otherwise, a transferor’s duty to deliver a debt obligation under a contract of purchase is not fulfilled until the transferor delivers the debt obligation in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgement to be made to the purchaser that the debt obligation is held for the purchaser.
Marginal note:Delivery to debt obligations broker
(3) A sale to a broker purchasing for the broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange.
Marginal note:Right to reclaim possession
90. (1) A person against whom the transfer of a debt obligation is wrongful may, against anyone except a good faith purchaser,
(a) reclaim possession of the debt obligation or obtain possession of a new debt obligation evidencing all or part of the same rights; or
(b) claim damages.
Marginal note:Recovery when unauthorized endorsement
(2) If the transfer of a debt obligation is wrongful by reason of an unauthorized endorsement, the owner may reclaim possession of the debt obligation or a new debt obligation even from a good faith purchaser if the ineffectiveness of the purported endorsement is asserted against the purchaser under section 85.
Marginal note:Right to requisites for registration
91. (1) Unless agreed otherwise, a transferor shall, on demand, supply a purchaser with proof of the transferor’s authority to transfer a debt obligation or with any other requisite that is necessary to obtain registration of the transfer of a debt obligation, but if the transfer is not for value, it is not necessary for the transferor to provide authority to transfer unless the purchaser pays the reasonable and necessary costs of the proof and transfer.
Marginal note:Rescission of transfer
(2) If a transferor fails to comply with a demand under subsection (1) within a reasonable time, the purchaser may reject, rescind or resolve the transfer.
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