(8-510) Rights of purchaser of security entitlement from entitlement holder
N.D. Cent. Code § 41-08-50
in effect41-08-50. (8-510) Rights of purchaser of security entitlement from entitlement holder
1. In a case not covered by the priority rules in chapter 41-09 or the rules stated in
subsection 3, an action based on an adverse claim to a financial asset or security
entitlement, whether framed in conversion, replevin, constructive trust, equitable lien,
or other theory, may not be asserted against a person who purchases a security
entitlement, or an interest therein, from an entitlement holder if the purchaser gives
value, does not have notice of the adverse claim, and obtains control.
2. If an adverse claim could not have been asserted against an entitlement holder under
section 41-08-42, the adverse claim cannot be asserted against a person who
purchases a security entitlement, or an interest therein, from the entitlement holder.
3. In a case not covered by the priority rules in chapter 41-09, a purchaser for value of a
security entitlement, or an interest therein, who obtains control has priority over a
purchaser of a security entitlement, or an interest therein, who does not obtain control.
Except as otherwise provided in subsection 4, purchasers who have control rank
according to priority in time of:
a. The purchaser's becoming the person for whom the securities account, in which
the security entitlement is carried, is maintained, if the purchaser obtained control
under subdivision a of subsection 4 of section 41-08-06;
b. The securities intermediary's agreement to comply with the purchaser's
entitlement orders with respect to security entitlements carried or to be carried in
the securities account in which the security entitlement is carried, if the purchaser
obtained control under subdivision b of subsection 4 of section 41-08-06; or
c. If the purchaser obtained control through another person under subdivision c of
subsection 4 of section 41-08-06, the time on which priority would be based
under this subsection if the other person were the secured party.
4. A securities intermediary as purchaser has priority over a conflicting purchaser who
has control unless otherwise agreed by the securities intermediary.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c08.pdf#nameddest=41-08-50Fetched: 10/16/2026