(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 4-3-110 apply to special indorsements.
If an indorsement is made by the holder of an instrument and it is not a specialindorsement, 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.
The holder may convert a blank indorsement that consists only of a signature into aspecial indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.
"Anomalous indorsement" means an indorsement made by a person who is not theholder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.
Source: L. 94: Entire article R&RE, p. 851, § 1, effective January 1, 1995.
Editor's note: This section is similar to former § 4-3-204 as it existed prior to 1994.