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Intent of Indorser

Intent of Indorser

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Published by A. Campbell
Was there a lawful negotiation with assignment of agency relationship?
Was there a lawful negotiation with assignment of agency relationship?

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Categories:Types, Research
Published by: A. Campbell on Mar 25, 2013
Copyright:Attribution Non-commercial

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03/25/2013

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“Intent” of Indorser
U.C.C. - ARTICLE 3 - NEGOTIABLE INSTRUMENTS ..PART 2. NEGOTIATION, TRANSFER, AND INDORSEMENT 
§ 3-205. SPECIAL INDORSEMENT; BLANK INDORSEMENT;ANOMALOUS INDORSEMENT.
 
(a) If an indorsement is made by the holder of an instrument,
whetherpayable to an identified person or payable to bearer,
and theindorsement identifies a person to whom it makes the instrumentpayable, it is a "
special indorsement
." When specially indorsed, aninstrument becomes payable to the identified person and may benegotiated only by the indorsement of that person. The principlesstated in Section 3-110 apply to special indorsements.
 
(b) If an indorsement is made by the holder of an instrument and it isnot a special indorsement, it is a "
blank indorsement
." Whenindorsed in blank, an instrument becomes payable to bearer and maybe negotiated by transfer of possession alone until specially indorsed.
 
(c) The holder may convert a blank indorsement that consists only of asignature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument ismade payable.
 
(d) "
Anomalous indorsement
" means an indorsement made by aperson who is not the holder of the instrument. An anomalousindorsement does not affect the manner in which the instrument maybe negotiated.
 
§ 3-415. OBLIGATION OF INDORSER.
 
(a) Subject to subsections (b), (c), and (d) and to Section 3-419(d), if an instrument is dishonored, an indorser is obliged to pay the amountdue on the instrument (i) according to the terms of the instrument atthe time it was indorsed, or (ii) if the indorser indorsed an incompleteinstrument, according to its terms when completed, to the extent statedin Sections 3-115 and 3-407. The obligation of the indorser is owed toa person entitled to enforce the instrument or to a subsequent indorserwho paid the instrument under this section.
 
(b) If an indorsement states that it is made "without recourse" orotherwise disclaims liability of the indorser, the indorser is notliable under subsection (a) to pay the instrument.
 
(c) If notice of dishonor of an instrument is required by Section 3-503and notice of dishonor complying with that section is not given to anindorser, the liability of the indorser under subsection (a) isdischarged.
 
(d) If a draft is accepted by a bank after an indorsement is made, theliability of the indorser under subsection (a) is discharged.
 
(e) If an indorser of a check is liable under subsection (a) and thecheck is not presented for payment, or given to a depositary bank forcollection, within 30 days after the day the indorsement was made, theliability of the indorser under subsection (a) is discharged.
Definitely worth the time to watch:http://www.youtube.com/watch?v=KON9r5NwLQ4&feature=youtu.be 
In reviewing the intervening negotiation indorsement (right) noted above onthe face of an instrument, intent is clearly defined that the Indorsernegotiated the instrument as being an “Order” instrument with a restrictiveintent. The restrictive intent was that the Indorsee would have no legalrecourse against the Indorser, only to the maker of the instrument.Upon reviewing the (left) the subsequent indorsement we notice the identityof the Indorser is identified and the instrument is noted as to negotiatewithout recourse to a “Pay to the Order Of” who is unidentified until suchtime as their identity has been noted on the face of the instrument.

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