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SPECIAL INDORSEMENT
Payable to: ORDER vs BEARER (SPECIAL indorsment)
Payable to ORDER:
Indorsement is NECESSARY,
whether it be first
indorsement or subsequent
one.
No indorsement renders the
Negotiable Instrument
invalid. The holder thereof
is a mere assignee only.
In this instance, Madam A.
is a mere assignee.
Payment or Discharge of
the instrument may be
avoided in her hands.
Payable to BEARER:
RULE: Once payable to BEARER Special Indorsement on a
always payable to BEARER. BEARER INSTRUMENT- the
DELIVERY only to effectuate special indorser is liable to
indorsement. only such holders as make
Special Indorsement does not title through his
transform it to a BEARER indorsement (sec 40)
INSTRUMENT.
PARTIES LIABLE to holders:
maker and direct/immediate
indorser (PN); drawer, drawee
and immediate indorser (BOE)
BLANK INDORSEMENT
Specifies no particular indorsee.
Negotiated by mere delivery only