Lecture on UCC, Fiduciary Duty, and Surety Bonds

Introduction

• UCC Section 3-307: Defines fiduciary as a corporate officer owing a fiduciary duty with respect to an instrument.
• Importance of understanding fiduciary roles in banking and financial instruments.

Presentment and Surety Bonds

• Trading with the Enemy Act and banking emergencies are key contexts.
• Before making presentment, request copies of the surety bond.
• Use of template letters in the process.

UCC Section 3-603B

• Tender of Payment: Obligation to pay an instrument is crucial.
  • CFO is a fiduciary entitled to enforce the instrument.
  • Important in the context of banking emergency acts.

Certificate of Protest

• Rejection by CFO: Acquire a Certificate of Protest.
• Security Agreement: Creates a security interest.
  • Acceptance of their oath of office as a security agreement.
  • Proceeds of collateral related to surety bonds.

Claims on Surety Bonds

• Lack of performance and breach of fiduciary duty can lead to claims.
• Impact of claiming on surety bonds can affect office tenure.

UCC Codes

• UCC 9-315: Security interest in proceeds is perfected if original collateral was perfected.
• UCC 2-206: Offer to make a contract invites acceptance.
  • Acceptance involves fiduciary appointment and contract.

Contract and Fiduciary Duty

• Contracts are enforceable if tied to existing fiduciary duties.
• Memorandum of law and instructions based on U.S. laws.
  • Acceptance via contract and registered mail.

Proceeds and Collateral

• Proceeds: Collected or distributed on account of collateral (oath is collateral).
• Surety Bond: Represents the proceeds.

Filing a UCC1 Financing Statement

• Performance Enforcement: Filing a UCC1 if necessary.
  • Use surety bond number in collateral box.

Presentment to CFO and County Recorder

• First Presentment: To CFO, leads to notary Certificate of Dishonor.
• County Recorder: Certificate of Dishonor as evidence.

Legal Authority

• Authority from banking emergencies and memorandum of law.
• Constitutional rights cannot be deprived under color of law.
• Potential claims separate from UCC-1 lien and insurance claims.

Conclusion

• Importance of understanding the legal framework surrounding fiduciary duty, UCC codes, and surety bonds.
• Strategic use of legal instruments to ensure performance and uphold fiduciary duties.