Colorado § 4-8-304 - Indorsement.

§ 4-8-304. Indorsement.

(a) An indorsement may be in blank or special. An indorsement in blank includes an indorsement to bearer. A special indorsement specifies to whom a security is to be transferred or who has power to transfer it. A holder may convert a blank indorsement to a special indorsement.

(b) An indorsement purporting to be only of part of a security certificate representing units intended by the issuer to be separately transferable is effective to the extent of the indorsement.

(c) An indorsement, whether special or in blank, does not constitute a transfer until delivery of the certificate on which it appears or, if the indorsement is on a separate document, until delivery of both the document and the certificate.

(d) If a security certificate in registered form has been delivered to a purchaser without a necessary indorsement, the purchaser may become a protected purchaser only when the indorsement is supplied. However, against a transferor, a transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary indorsement supplied.

(e) An indorsement of a security certificate in bearer form may give notice of an adverse claim to the certificate, but it does not otherwise affect a right to registration that the holder possesses.

(f) Unless otherwise agreed, a person making an indorsement assumes only the obligations provided in section 4-8-108 and not an obligation that the security will be honored by the issuer.

Source: L. 96: Entire article R&RE, p. 221, § 2, effective July 1.

Editor's note: This section is similar to former §§ 4-8-307, 4-8-308, 4-8-309, and 4-8-310 as they existed prior to 1996.

ANNOTATION

I. General Consideration.

II. Transfer.

III. Attempted Transfer Without Delivery.

I. GENERAL CONSIDERATION.

Law reviews. For note, "Attachment of Corporate Stock Where the Method is Not Prescribed by Statute", see 2 Rocky Mt. L. Rev. 190 (1930). For article, "When Corporate Stock Becomes Real Estate", see 21 Dicta 53 (1944). For article, "Application of the Uniform Stock Transfer Act to Gifts of Stock", see 20 Rocky Mt. L. Rev. 67 (1947). For article, "One Year Review of Agency, Partnerships, Corporations, and Municipal Corporations", see 41 Den. L. Ctr. J. 61 (1964). For article, "Impact of the Uniform Commercial Code on Colorado Law", see 42 Den. L. Ctr. J. 67 (1965).

II. TRANSFER.

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

Title to corporate stock can only be transferred as provided by statute. Quandary Land Dev. Co. v. Porter, 159 Colo. 8, 408 P.2d 978 (1965).

The statutory methods are exclusive. Brennan v. W. A. Wills, Ltd., 263 F.2d 1 (10th Cir. 1959); Goeddel v. Aircraft Fin., Inc., 152 Colo. 419, 382 P.2d 812 (1963); Quandary Land Dev. Co. v. Porter, 159 Colo. 8, 408 P.2d 978 (1965).

This section requires delivery of the certificate to effect a transfer of title. Brennan v. Korholz, 293 F.2d 751 (10th Cir. 1961).

Any attempt to transfer stock without delivery of the certificate does not have the effect of passing title, but merely constitutes a promise to transfer. Brennan v. W. A. Wills, Ltd., 263 F.2d 1 (10th Cir. 1959); Goeddel v. Aircraft Fin., Inc., 152 Colo. 419, 382 P.2d 812 (1963); Quandary Land Dev. Co. v. Porter, 159 Colo. 8, 408 P.2d 978 (1965).

Under the uniform stock transfer act, title to a certificate and to the shares represented thereby could be transferred only by (1) delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby, or by (2) delivery of the certificate and a separate document containing a written assignment of the certificate or a power of attorney to sell, assign, or transfer the same or the shares represented thereby signed by the person appearing by the certificate to be the owner of the shares represented thereby. Brennan v. W. A. Wills, Ltd., 263 F.2d 1 (10th Cir. 1959); Arfsten v. Higby, 150 Colo. 254, 372 P.2d 166 (1962); Goeddel v. Aircraft Fin., Inc., 152 Colo. 419, 382 P.2d 812 (1963).

An assignment of a shareholder's interest without delivery of the certificates operates to vest an equitable title in the assignee. Arfsten v. Higby, 150 Colo. 254, 372 P.2d 166 (1962).

Under prior stock transfer statutes the holder of an equitable title to stock had an enforceable status, where rights of third parties were not involved. Arfsten v. Higby, 150 Colo. 254, 372 P.2d 166 (1962).

III. ATTEMPTED TRANSFER WITHOUT DELIVERY.

Law reviews. For article, "One Year Review of Agency, Partnerships, Corporations, and Municipal Corporations", see 41 Den. L. Ctr. J. 61 (1964).

For prior provisions making attempted transfers without delivery a matter of contract, see Brennan v. W. A. Wills, Ltd., 263 F.2d 1 (10th Cir. 1959); Brennan v. Korholz, 293 F.2d 751 (10th Cir. 1961); Goeddel v. Aircraft Fin., Inc., 152 Colo. 419, 382 P.2d 812 (1963) (decided under repealed § 31-9-10, CRS 53, uniform stock transfer act).