Ch. 91

1996 LAWS OF MARYLAND

(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 § 3-110 APPLY TO SPECIAL INDORSEMENTS.

(B)     IF AN INDORSEMENT IS MADE BY THE HOLDER OF AN INSTRUMENT AND
IT IS NOT A SPECIAL INDORSEMENT, 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.

(C)     THE HOLDER MAY CONVERT A BLANK INDORSEMENT THAT CONSISTS
ONLY OF A SIGNATURE INTO A SPECIAL INDORSEMENT BY WRITING, ABOVE THE
SIGNATURE OF THE INDORSER, WORDS IDENTIFYING THE PERSON TO WHOM THE
INSTRUMENT IS MADE PAYABLE.

(D)    "ANOMALOUS INDORSEMENT" MEANS AN INDORSEMENT MADE BY A
PERSON WHO IS NOT THE HOLDER OF THE INSTRUMENT. AN ANOMALOUS
INDORSEMENT DOES NOT AFFECT THE MANNER IN WHICH THE INSTRUMENT MAY
BE NEGOTIATED.

3-206.

(A)    AN INDORSEMENT LIMITING PAYMENT TO A PARTICULAR PERSON OR
OTHERWISE PROHIBITING FURTHER TRANSFER OR NEGOTIATION OF THE
INSTRUMENT IS NOT EFFECTIVE TO PREVENT FURTHER TRANSFER OR
NEGOTIATION OF THE INSTRUMENT.

(B)     AN INDORSEMENT STATING A CONDITION TO THE RIGHT OF THE
INDORSEE TO RECEIVE PAYMENT DOES NOT AFFECT THE RIGHT OF THE INDORSEE
TO ENFORCE THE INSTRUMENT. A PERSON PAYING THE INSTRUMENT OR TAKING IT
FOR VALUE OR COLLECTION MAY DISREGARD THE CONDITION, AND THE RIGHTS
AND LIABILITIES OF THAT PERSON ARE NOT AFFECTED BY WHETHER THE
CONDITION HAS BEEN FULFILLED.

(C)     IF AN INSTRUMENT BEARS AN INDORSEMENT (I) DESCRIBED IN § 4-201(B),
OR (II) IN BLANK OR TO A PARTICULAR BANK USING THE WORDS "FOR DEPOSIT",
"FOR COLLECTION", OR OTHER WORDS INDICATING A PURPOSE OF HAVING THE
INSTRUMENT COLLECTED BY A BANK FOR THE INDORSER OR FOR A PARTICULAR
ACCOUNT, THE FOLLOWING RULES APPLY:

(1)     A PERSON, OTHER THAN A BANK, WHO PURCHASES THE
INSTRUMENT WHEN SO INDORSED CONVERTS THE INSTRUMENT UNLESS THE
AMOUNT PAID FOR THE INSTRUMENT IS RECEIVED BY THE INDORSER OR APPLIED
CONSISTENTLY WITH THE INDORSEMENT.

(2)     A DEPOSITARY BANK THAT PURCHASES THE INSTRUMENT OR
TAKES IT FOR COLLECTION WHEN SO INDORSED CONVERTS THE INSTRUMENT

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