Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise. A former holder who reacquires the instrument may cancel indorsements made after the reacquirer first became a holder of the instrument. If the cancellation causes the instrument to be payable to the reacquirer or to bearer, the reacquirer may negotiate the instrument. An indorser whose indorsement is canceled is discharged, and the discharge is effective against any subsequent holder.
Source: L. 94: Entire article R&RE, p. 853, § 1, effective January 1, 1995.
Editor's note: This section is similar to former § 4-3-208 as it existed prior to 1994.
Cross references: For the effect of discharge against a holder in due course, see § 4-3601; for payment or satisfaction, see § 4-3-602; for cancellation and renunciation, see § 4-3-604.