KANSAS OFFICE of
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84-8-304. 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 K.S.A. 84-8-108 and not an obligation that the security will be honored by the issuer.

History: L. 1996, ch. 202, § 57; July 1.

KANSAS COMMENT, 1996

This section is derived from the former 84-8-308, 84-8-309 and 84-8-310. The section is identical to the 1995 Official Text.

An "indorsement" is defined in 84-8-102 as a signature on a security certificate or on a separate document to assign, transfer or redeem a security or to give the power to do those things. The indorsement can be special, to a specified person, or in blank, which includes to bearer. Subsection (a). Subsection (b) permits it to be for all or a part of the security. The transfer is not effective until the indorsed security or the security and the indorsement (or power) is delivered.

Subsection (d) provides that the transferee of a registered security has the right to demand the necessary indorsement from the transferor, but that protected purchaser status cannot attach until there is an indorsement. Subsection (e) provides that the indorsement in bearer form may be notice of an adverse claim to the security, such as an indorsement for surrender on a security that is not being surrendered.

Subsection (e) provides that an indorser makes the warranties specified in 84-8-108, but does not guarantee performance of the obligation. Thus the security is warranted, but not its value. An indorsement of a security is similar to an indorsement without recourse under 84-3-415(b).

Revisor's Note:

Former section 84-8-304 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.


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