(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 section 42a-3-110 apply to special endorsements.
(b) If an endorsement is made by the holder of an instrument and 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.
(1959, P.A. 133, S. 3-205; P.A. 91-304, S. 24.)
History: P.A. 91-304 entirely replaced former provisions re restrictive endorsements with provisions re special, blank and anomalous endorsements, a restatement of Sec. 42a-3-204, revised to 1991.
See Sec. 42a-3-206 for successor provisions to Sec. 42a-3-205, revised to 1991, re restrictive endorsements.
Subsec. (d):
Any endorsement by a nonholder is an anomalous endorsement and does not affect negotiability of the instrument. 68 CA 716.