Okla. Stat. tit. 12A § 3-201
Okla. Stat. tit. 12A, § 3-201
Oklahoma Code Comment
Part 2 of current Article 3 essentially continues the provisions of Part 2 of pre-revision Article 3, but in considerably rearranged form and the provisions are redrafted for clarity. The roadmap is as follows:
Pre-Revision Article 3 Section | Current Article 3 Section |
§ 3-201(1) | § 3-203(b) |
§ 3-201(2) | § 3-204(c) |
§ 3-201(3). | § 3-203(c) |
§ 3-202(1) | § 3-201(a) and (b) |
§ 3-202(2) | § 3-204(a) |
§ 3-202(3) | § 3-203(d) |
§ 3-202(4) | Omitted as subsumed in other provisions such as §§ 3-419 and 3-415 |
§ 3-203 | § 3-204(d) |
§ 3-204(1) | § 3-205(a) |
§ 3-204(2) | § 3-205(b) |
§ 3-204(3) | § 3-205(c) |
§ 3-205 | Omitted as subsumed into § 3-206 |
§ 3-206(1) | § 3-206(a) |
§ 3-206(2) | § 3-206(c)(4) and (d) |
§ 3-206(3) | § 3-206(b), (c) and (e) |
§ 3-206(4) | § 3-206(d) and (e) |
§ 3-207(1) | § 3-202(a) |
§ 3-207(2) | § 3-202(b) |
§ 3-208 | § 3-207 |
Several changes, however, were made. They are:
(1) A definition of "transfer" has been added in sub section 3-203(a).
(2) A definition of "indorsement," that includes explicit recognition of an anomalous indorsement, has been added in sub section 3-204(a) (see also UCC § 3-205(d)). Sub section 3-204(b) likewise defines "indorser."
(3) The groups of persons afforded protection against rescission of negotiation in sub section 3-202(b) is broadened to include payor banks. As under pre-revision Section 3-207, whether negotiation may be rescinded or other remedies invoked depends on law outside Article 3 under Section 1-103. See, e.g., Hummell v. Brown, 93 Okla. 256, 221 P.738 (1923) (holding replevin action may lie for specific personal property); Grant v. First State Bank of Miami, 96 Okla. 245, 221 P. 769 (1923) (one cannot rescind indorsement without restoring value received). See also, generally, 15 O.S. §§ 233-235. Note also that the basis for rescission or other remedy may be waived (see Wood & Co. v. State ex ret Johnson, 183 Okla. 71, 80 P.2d 261 (1938), holding maker who gives a note to renew another note with knowledge or under circumstances where, with exercise of ordinary diligence, maker should have discovered there was an absence of consideration for the original note, waives the right to claim absence of consideration), or the conduct giving the basis for rescission or other remedy may be ratified (see Leeper v. &as, 172 Okla. 133, 44 P.2d 78 (1935), holding payment not under duress ratifies contract although original execution of note was obtained by duress).
(4) Some case law under pre-revision Section 3-206 suggested that a restrictive indorsement could not be waived, arguably leading to absurd results. See Rutherford v. Darwin, 95 N.M. 340, 622 P.2d 245 (1980); Marine Midland Bank N.A. v. Price, Miller, Evans & Flowers, 57 N.Y.2d 220, 455 N.Y.S.2d 565, 441 N.E.2d 1083 (1982). Comment 3 to Section 3-206 makes it clear that the doctrine of waiver is not displaced under Sections 3-206 and 1-103 (on this in Oklahoma, see O'Petro Energy Corp. v. Canadian State Bank, 837 P.2d 1391 (Okla. 1992) (deposit slip can cancel restrictive indorsement)).
(5) Sub section 3-206(b) no longer treats a conditional indorsement like one for deposit or collection; it makes such an indorsement ineffective with respect to parties other than the indorser and indorsee. See UCC § 3-206, Official Comment 2.
Section 3-201 itself is taken from pre-revision sub section 3-202(1). Note two points in particular:
(a) A "negotiation" which involves a transfer of possession can occur involuntarily. See UCC § 3-202, Official Comment 1, which illustrates the case of a bearer instrument negotiated to a thief.
(b)While negotiation of non-bearer paper normally requires an authorized indorsement that is not the case where the remitter is the owner (see UCC § 3-201, Official Comment 2) or where an unauthorized indorsement is made effective (see UCC § 3-201, Official Comment 3).