INDORSEMENT
indorsement,n.1. The placing of a signature, sometimes with an additional notation, on the
back of a negotiable instrument to transfer or guarantee the instrument or to acknowledge payment.
2. The signature or notation itself. — Also spelled endorsement. — indorse,vb.
“The clever indorser can subscribe his or her name under a variety of magic phrases. The Code specifies the legal effect of some of these phrases. Qualified indorsements (‘without recourse’) limit the liability of the indorser if the instrument is dishonored. Restrictive indorsements such as ‘for deposit only,’ ‘pay any bank,’ and the like set the terms for further negotiation of the instrument. Their main purpose is to prevent thieves and embezzlers from cashing checks.” 2 James J. White & Robert S. Summers, Uniform Commercial Code § 16-7, at 92–93 (4th ed. 1995).
accommodation indorsement.An indorsement to an instrument by a third party who acts as surety for another party who remains primarily liable. See ACCOMMODATION PAPER. [Cases:
Bills and Notes 236. C.J.S. Bills and Notes; Letters of Credit § 63.] anomalous indorsement.See irregular indorsement.
blank indorsement.An indorsement that names no specific payee, thus making the instrument payable to the bearer and negotiable by delivery only. UCC § 3-205(b). — Also termed indorsement in blank; general indorsement. [Cases: Bills and Notes 188, 288. C.J.S. Bills and
Notes; Letters of Credit § 153.] collection indorsement.See restrictive indorsement.
conditional indorsement.An indorsement that restricts the instrument in some way, as by limiting how the instrument can be paid or transferred; an indorsement giving possession of the instrument to the indorsee, but retaining title until the occurrence of some condition named in the indorsement. • Wordings that indicate this type of indorsement are “Pay to Brad Jones when he becomes 18 years of age” and “Pay to Brigitte Turner, or order, unless before payment I give you notice to the contrary.” — Also termed restricted indorsement; restrictive indorsement. Cf. special indorsement. [Cases: Bills and Notes 190, 199, 290. C.J.S. Bills and Notes; Letters of Credit §§
154–155.] full indorsement.See irregular indorsement, special indorsement.
general indorsement.See blank indorsement. indorsement in blank.See blank indorsement. indorsement in full.See special indorsement. indorsement without recourse.See qualified indorsement.
irregular indorsement.An indorsement by a person who signs outside the chain of title and who therefore is neither a holder nor a transferor of the instrument. • An irregular indorser is generally treated as an accommodation party. UCC § 3-205(c). — Also termed anomalous indorsement; full indorsement. See ACCOMMODATION PARTY. [Cases: Bills and Notes 191,
294. C.J.S. Bills and Notes; Letters of Credit §§ 24, 156.]
qualified indorsement.An indorsement that passes title to the instrument but limits the indorser’s liability to later holders if the instrument is later dishonored. • Typically, a qualified indorsement is made by writing “without recourse” or “sans recourse” over the signature. — Also
termed indorsement without recourse. UCC § 3-415(b). See WITHOUT RECOURSE. [Cases:
Bills and Notes 293. C.J.S. Bills and Notes; Letters of Credit § 160.] restricted indorsement.See conditional indorsement.
restrictive indorsement.An indorsement that includes a condition (e.g., “pay Josefina Cardoza only if she has worked 8 full hours on April 13”) or any other language restricting further negotiation (e.g., “for deposit only”). — Also termed collection indorsement. See conditional indorsement. [Cases: Bills and Notes 190, 199, 290. C.J.S. Bills and Notes; Letters of Credit §§
154–155.]
special indorsement.An indorsement that specifies the person to receive payment or to whom the goods named by the document must be delivered. UCC § 3-205(a). — Also termed indorsement in full; full indorsement. Cf. conditional indorsement. [Cases: Bills and Notes 189,
289. C.J.S. Bills and Notes; Letters of Credit § 152.]
trust indorsement.An indorsement stating that the payee becomes a trustee for a third person (e.g., “pay Erin Ray in trust for Kaitlin Ray”); a restrictive indorsement that limits the instrument to the use of the indorser or another person.
unauthorized indorsement.An indorsement made without authority, such as a forged indorsement. [Cases: Bills and Notes 239, 279. C.J.S. Bills and Notes; Letters of Credit §§ 29,
150–151.]
unqualified indorsement.An indorsement that does not limit the indorser’s liability on the
paper. • It does not, for example, include the phrase “without recourse.” [Cases: Bills and Notes
281, 287, 293. C.J.S. Bills and Notes; Letters of Credit §§ 147, 160.]
unrestrictive indorsement.An indorsement that includes no condition or language restricting negotiation. — Also termed unrestricted indorsement. [Cases: Bills and Notes 190, 199, 290. C.J.S. Bills and Notes; Letters of Credit §§ 154–155.]
[Blacks Law 8th]