Rights Acquired by Purchaser; Adverse Claim; Title

Acquired by Bona Fide Purchaser.

(1)Upon delivery of a security the purchaser acquires the rights in the security which his transferor had or had actual authority to convey except that a purchaser who has himself been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim cannot improve his position by taking from a later bona fide purchaser. Adverse claim includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security.

(2)A bona fide purchaser in addition to acquiring the rights of a purchaser also acquires the security free of any adverse claim.

(3)A purchaser of a limited interest acquires rights only to the extent of the interest purchased.