Colorado § 4-3-204 - Indorsement.

§ 4-3-204. Indorsement.

(a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument.

(b) "Indorser" means a person who makes an indorsement.

(c) For the purpose of determining whether the transferee of an instrument is a holder, an indorsement that transfers a security interest in the instrument is effective as an unqualified indorsement of the instrument.

(d) If an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.

Source: L. 94: Entire article R&RE, p. 851, § 1, effective January 1, 1995.

Editor's note: This section is similar to former §§ 4-3-201, 4-3-202, and 4-3-203 as they existed prior to 1994.

ANNOTATION

Law reviews. For article, "One Year Review of Contracts", see 36 Dicta 19 (1959).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

Under the negotiable instruments law an indorsement must have been written on the instrument or upon a paper attached thereto, and the signature of the indorser without additional words was a sufficient indorsement. Am. Nat'l Bank v. First Nat'l Bank, 130 Colo. 557, 277 P.2d 951 (1954).

Stapling indorsement to negotiable instrument is permanent attachment to checks so that it becomes "a part thereof". Lamson v. Commercial Credit Corp., 187 Colo. 382, 531 P.2d 966 (1975).

It is not the written name of the payee on the note, but his "signature" which constitutes an indorsement. Marks v. Munson, 59 Colo. 440, 149 P. 440 (1915).

In an action on a note where an indorsement is denied by the answer, the mere production of the note by the plaintiff is insufficient; rather both the execution and indorsement must be proved. Marks v. Munson, 59 Colo. 440, 149 P. 440 (1915); Myrick v. Garcia, 138 Colo. 298, 332 P.2d 900 (1958).

Production of a note by the plaintiff is a prima facie title under a general denial. In an action on a promissory note by the indorsee, possession and production of the note by the plaintiff with an indorsement of the payee's name is prima facie evidence of title in the plaintiff where the title is at issue under a general denial. Gumaer v. Sowers, 31 Colo. 164, 71 P. 1103 (1903).

Indorsement must be written on behalf of holder. La Junta State Bank v. Travis, 727 P.2d 48 (Colo. 1986).

The term "indorsement" is generally understood to mean the indorser's writing of his or her signature on the instrument or some designation identifying the indorsement on the instrument. A check simply inscribed "For deposit only" to an account other than the payee's account and without the payee's signature is not an effective "indorsement." Kelly v. Ctr. Bank & Trust Co., 794 P.2d 1037 (Colo. App. 1989).

A negotiable instrument may be indorsed by an authorized representative on behalf of the holder. First Nat. Bank v. Lohman, 827 P.2d 583 (Colo. App. 1992).

Former § 4-3-202 applied in Barclay Receivables v. Mtn. Majesty, Ltd., 903 P.2d 37 (Colo. App. 1995).

Allonge reflecting indorsement that was affixed to note constitutes an indorsement for purposes of subsection (a). In re Sandrin, 536 B.R. 309 (Bankr. D. Colo. 2015).

Where joint payees fail to indorse a check and a bank accepts such for deposit to the credit of one indorsing payee only, the negotiability of the check is destroyed, and subsequent holders are not holders in due course, but rather the relation of all parties thereafter is governed by rules of assignment. Am. Nat'l Bank v. First Nat'l Bank, 130 Colo. 557, 277 P.2d 951 (1954) (decided under repealed CSA, C. 112, § 32, negotiable instruments law).

Transferee for value, whether under transaction denoted an "assignment" or otherwise, was entitled to unqualified indorsement by the payee of the instrument transferred in absence of agreement to the contrary. Pierce v. DeZeeuw, 824 P.2d 97 (Colo. App. 1991).

Transferee for value, whether under transaction denoted an "assignment" or otherwise, was entitled to unqualified indorsement by the payee of the instrument transferred in absence of agreement to the contrary. Pierce v. DeZeeuw, 824 P.2d 97 (Colo. App. 1991).

A negotiable instrument may be indorsed by an authorized representative on behalf of the holder. First Nat. Bank v. Lohman, 827 P.2d 583 (Colo. App. 1992).

In an action on a note where an indorsement is denied by the answer, the mere production of the note by a party is insufficient; both the execution and indorsement must be proved. Marks v. Munson, 59 Colo. 440 (1915); Myrick v. Garcia, 138 Colo. 298, 332 P.2d 900 (1958).

Purported assignments of a note did not constitute negotiations of the note because the indorsements were not "made on" or "affixed to" the original note as required by subsection (a). In re Sandrin, 536 B.R. 309 (Bankr. D. Colo. 2015).

Indorsement "Demand, notice and protest waived. Payment guaranteed" held to be a surety or accommodation party. See Winton v. Sullivan, 104 Colo. 450, 91 P.2d 996 (1939).