Printable Format84-3-205. Special endorsement; blank endorsement; anomalous endorsement. (a) If an endorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the endorsement identifies a person to whom it makes the instrument payable, it is a "special endorsement." When specially endorsed, an instrument becomes payable to the identified person and may be negotiated only by the endorsement of that person. The principles stated in K.S.A. 84-3-311[84-3-110] apply to special endorsements.
(b) If an endorsement is made by the holder of an instrument and it is not a special endorsement, it is a "blank endorsement." When endorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially endorsed.
(c) The holder may convert a blank endorsement that consists only of a signature into a special endorsement by writing, above the signature of the endorser, words identifying the person to whom the instrument is made payable.
(d) "Anomalous endorsement" means an endorsement made by a person who is not the holder of the instrument. An anomalous endorsement does not affect the manner in which the instrument may be negotiated.
History: L. 1991, ch. 296, § 24; February 1, 1992.
KANSAS COMMENT, 1996
This section is identical to the 1995 Official Text. The section is derived from the former provisions of 84-3-204(1)(3). Historical case and statutory references may be obtained from the 1965 and 1983 bound Volume 7 of the Kansas Statutes Annotated.
Subsections (a) and (b). The unindorsed "special indorsement" instrument provides some additional protection for the holder of an instrument because a thief normally cannot further negotiate it. A bearer instrument (subsection (b)) can be further negotiated by a thief. Blank indorsements include all indorsements which do not name a specific person to enforce the instrument.
Both specially indorsed instruments and instruments indorsed in blank (bearer instruments) can be converted to the other format for safety or convenience by indorsing, in the first case, and by inserting the special payment instructions over a blank indorsement in the second case.
The anomalous indorsement is usually one out of the chain of title on order paper. It will cause the indorser to be liable on the instrument as an indorser, often as an accommodation party, and is notice of that status to later takers of the instrument. See 84-3-419(c).
Revisor's Note:
Former section 84-3-205 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.
Law Review and Bar Journal References:
"Changes in Check Collection and Access to Funds; Regulation CC and Revised UCC Article 4," William H. Lawrence, 61 J.K.B.A. No. 6, 26, 30 (1992).
CASE ANNOTATIONS
1. Note as a negotiable instrument can be endorsed in blank. Bank of America v. Inda, 48 Kan. App. 2d 658 (2013).