CO Code § 4-8-302 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 8 - Investment Securities|Part 3 - Transfer of Certificated and Uncertificated Securities|§ 4-8-302. Rights of Purchaser

  Except as otherwise provided in subsections (b) and (c) of this section, a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer.    A purchaser of a limited interest acquires rights only to the extent of the interest purchased.    A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve its position by taking from a protected purchaser.     History. Source: L. 96: Entire article R&RE, p. 220, § 2, effective July 1. L. 2001: (a) amended, p. 1443, § 34, effective July 1.    Editor's note:   This section is similar to former §§ 4-8-301 and 4-8-302 as they existed prior to 1996.   OFFICIAL COMMENT   1. Subsection (a) provides that if a certificated or uncertificated security is delivered (Section 8-301) to a purchaser in a transfer, the purchaser acquires all rights that the transferor had or had power to transfer. This statement of the familiar “shelter” principle is qualified by the exceptions that a purchaser of a limited interest acquires only that interest, subsection (b), and that a person who does not qualify as a protected purchaser cannot improve its position by taking from a subsequent protected purchaser, subsection (c).   2. Although this section provides that a purchaser acquires a property interest in a certificated or uncertificated security upon “delivery,” it does not state that a person can acquire an interest in a security only by delivery. Article 8 is not a comprehensive codification of all of the law governing the creation or transfer of interests in securities. For example, the grant of a security interest is a transfer of a property interest, but the formal steps necessary to effectuate such a transfer are governed by Article 9 not by Article 8. Under the Article 9 rules, a security interest in a certificated or uncertificated security can be created by execution of a security agreement under Section 9-203 and can be perfected by filing. A transfer of an Article 9 security interest can be implemented by an Article 8 delivery, but need not be.   Similarly, Article 8 does not determine whether a property interest in certificated or uncertificated security is acquired under other law, such as the law of gifts, trusts, or equitable remedies. Nor does Article 8 deal with transfers by operation of law. For example, transfers from decedent to administrator, from ward to guardian, and from bankrupt to trustee in bankruptcy are governed by other law as to both the time they occur and the substance of the transfer. The Article 8 rules do, however, determine whether the issuer is obligated to recognize the rights that a third party, such as a transferee, may acquire under other law. See Sections 8-207, 8-401, and 8-404.   Definitional Cross References:   “Certificated security”. Section 8-102(a)(4)   “Notice of adverse claim”. Section 8-105   “Protected purchaser”. Section 8-303   “Purchaser”. Sections 1-201(33) 8-116   “Uncertificated security”. Section 8-102(a)(18)   “Delivery”. Section 8-301   ANNOTATION   Law reviews. For article, “One Year Review of Corporations, Partnerships, and Agency”, see 34 Dicta 129.   Annotator's note. Since § 4-8-302 is similar to § 4-8-301 as it existed prior to the 1996 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.   Under this section, one acquires the rights in a security which his transferor had. Dempsey-Tegeler Co. v. Otis Oil Gas Corp., 293 F. Supp. 1383 (D. Colo. 1968 ).   In order for one to be entitled to the protection afforded by this section, he must prove that he was a purchaser for value, and that either he or his transferor was without notice of a defect in the certificates. Dempsey-Tegeler Co. v. Otis Oil Gas Corp., 293 F. Supp. 1383 (D. Colo. 1968 ).   If one's transferor was without notice of a defect in the certificates, then the defect is ineffective against the transferor by virtue of § 8-4-202(2)(a) , and he has the right to require the transfer of the certificates; therefore, when such an individual purchases the certificates from his transferor he acquires his transferor's right to require the issuer to transfer the certificates. Dempsey-Tegeler Co. v. Otis Oil Gas Corp., 293 F. Supp. 1383 (D. Colo. 1968 ).   Purchaser of limited tax bond was not a “protected purchaser” acquiring rights greater than the seller held because purchaser had prior notice of another's adverse claim. Meadow Homes Dev. Corp. v. Bowens, 211 P.3d 743 (Colo. App. 2009).   For the construction of “title” under prior provisions, see Fehr v. Hadden, 134 Colo. 102 , 300 P.2d 533 (1956); Arfsten v. Higby, 150 Colo. 254 , 372 P.2d 166 (1962) (decided under repealed § 31-9-21 , CRS 53, uniform stock transfer act).