§490:3-205 - Special indorsement; blank indorsement; anomalous indorsement.

     §490:3-205  Special indorsement; blank indorsement; anomalous indorsement.  (a)  If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a "special indorsement".  When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person.  The principles stated in section 490:3-110 apply to special indorsements.

     (b)  If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a "blank indorsement".  When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.

     (c)  The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.

     (d)  "Anomalous indorsement" means an indorsement made by a person who is not the holder of the instrument.  An anomalous indorsement does not affect the manner in which the instrument may be negotiated. [L 1991, c 118, pt of §1]