Birth Certificate Bond - Applicable UCC Code
Birth Certificate Bond - Applicable UCC Code
Birth Certificate Bond - Applicable UCC Code
When the transferee receives an instrument issued and transferred for value, he
has options. He can 1) accept it and pay it, 2) refuse it for cause and return it, or 3)
accept it for value and return it as payment. The transferee gets an implied security
interest (consideration) that he can enforce against the security the issuer is supposed
to be passing on to the transferee. By operation of law, the instrument must carry the
issuer’s obligation to pay it.
To avoid fraud, the instrument has to be issued for value. It gives the transferee a security interest in the
instrument. The only piece of paper a man has the is proof of the security interest he has is the birth
certificate. It has no value on the private side, but it does on the public side if he deposits with an
appropriate banker, who can then be the man’s securities intermediary, and the man can be the
entitlement holder. This is explained in UCC Article 8 in the 500 series. The following insert is taken from
Wikipedia, an online dictionary.
Operation of law - The phrase "by operation of law" is a legal term that
indicates that a right or liability has been created for a party, irrespective of
the intent of that party, because it is dictated by existing legal principles. …
Events that occur by operation of law do so because courts have determined
over time that the rights thus created or transferred represent what the intent of
the party would have been, had they thought about the situation in advance; or
because the results fulfilled the settled expectations of parties with respect to
their property; or because legal instruments of title provide for these transfers
to occur automatically on certain named contingencies.
Rights that arise by operation of law often arise by design of certain
contingencies set forth in a legal instrument.
Depositing the birth certificate (security) makes the secretary of the treasury a
securities intermediary.
UCC 8-501
(a) “Securities account” means an account to which a financial asset is or
may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the
account is maintained as entitled to exercise the rights that comprise the
financial asset.
(b) Except as otherwise provided in subsection (d) and (e), a person acquires a
security entitlement if a securities intermediary:
(1) indicates by book entry that a financial asset has been credited to the
person’s securities account;
(2) receives a financial asset from the person or acquires a financial asset
for the person and, in either case, accepts it for credit to the person’s
securities account; or
(3) becomes obligated under other law, regulation, or rule to credit a
financial asset to the person’s securities account.
His acceptance of your financial asset makes you an entitlement holder with a
securities entitlement.
Official Comment
Because many of the rules of Part 5 impose duties on securities intermediaries
in favor of entitlement holders, the definition of entitlement holder is, in most
cases, limited to the person specifically designated as such on the records of
the intermediary. The last sentence of the definition covers the relatively
unusual cases where a person may acquire a security entitlement under Section
8-501 even though the person may not be specifically designated as an
entitlement holder on the records of the securities intermediary.
You can give him another bond written against the security (bond = birth
certificate) he is holding. A promissory note can be written against the bond that is
written against the security. Such a promissory note would be an order from the
entitlement holder to the securities intermediary to use the security he is maintaining
for a specific purpose.
Subsection 3 of 3-303 deals with options the transferee has when an instrument is
issued for value and transferred for value to him.
“Giving value” from 1-201 is not the same as “transferring for value” from 3-303.
The transferor (issuer) in 303 usually wants to get a valuable consideration back for
an instrument he issues for value, and he wants a new contract on which he or the
person he represents is the creditor. An issuer for value has no preexisting contract
and no antecedent claim that authorizes him to issue an instrument, so he issues it for
value and delivers it to someone (the target) with the hope that the receiver will
accept it without conditions. The one who receives an instrument issued for value
does not have to accept the liability attached to it, unless he has an obligation to accept the liability. If there
is no obligation, the transferee can view the instrument as
a payment, and return it with a proper endorsement to pay the instrument and to close
the account. The instrument pays the instrument! The issuer pays the issuer!
Confusing, isn’t it?
The instrument can also be an offer to contract, and no one is required to contract
if he does not choose to do so. The presumption that everyone is obligated to enter
these contracts is based on an implied simple contract. That is not a very strong
position.
Hopefully this will help you all understand. There is much more and if you would like to read the full text
please do not hesitate to e-mail me with a request.
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