Okla. Stat. tit. 12A § 8-304

Current through Laws 2024, c. 453.

Section 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 8-108 of this title and not an obligation that the security will be honored by the issuer.

Okla. Stat. tit. 12A, § 8-304

Added by Laws 1961, p. 155, § 8-304. Amended by Laws 1984, HB 1800, c. 76, § 21, eff. 11/1/1984; Amended by Laws 1995, SB 522, c. 242, § 30, eff. 2/1/1996.

Oklahoma Code Comment

This Section combines several separate sections of former Article 8. Subsection (a) is a restatement of former sub section 8-308(2) . Subsection (b) is a restatement of former sub section 8-308(3) . Subsection (c) is a restatement of former Section 8-309 . Subsection (d) is a restatement of former Section 8-307 . Subsection (e) is a restatement of former Section 8-310. Subsection (f) is a restatement of former sub section 8-308(4) .

Under subsection (a) of this Section, an indorsement may be blank or special, the same as under former 18 Okla. Stat. § 1.85(1) (1947).

Subsection (b) of this Section (as in the 1961 version of sub section 8-308(5) ) changes pre-Code Oklahoma law set forth in former 48 Okla. Stat. § 83 (1910), as to negotiable instruments.

Delivery is necessary to effect a transfer under subsection (c) of this Section. Pre-Code 18 Okla. Stat. §§ 1.85 and 1.93 (1947) imposed the same requirement.

Subsection (d) of this Section changes pre-Code law. Under former 18 Okla. Stat. § 1.92 (1947), the transfer itself was not effective until indorsement. Under the 1961 version of Section 8-307 , the transfer was effective upon delivery of the security to the purchaser, but the purchaser's rights as to third parties were determined at the time of indorsement. In addition, the 1961 version of Section 8-307 rejected such cases as Bethea v. Floyd, 177 S.C. 521, 181 S.E. 721 (1935), cert. denied, 296 U.S. 622 , which held that the indorsement of a note delivered prior to maturity but indorsed thereafter took effect as of the date of delivery to permit the purchaser to become a holder in due course.

Subsection (e) of this Section and the 1961 version of Section 8-310 changed somewhat the pre-Code rule of former 48 Okla. Stat. § 391 (1910).

Evidence in a declaratory judgment action to determine ownership of stock warranted a finding that the corporation owned stock, notwithstanding that the certificate was in another's possession or the stock was only transferred on the corporation's books and the stock certificate was not surrendered to the corporation. See Kirkpatrick v. Jacobson's Lifetime Bldgs., Inc., 467 P.2d 489 (Okla. 1970).

An action, under Rhode Island law, to enforce a corporation's liability for improper registration of the plaintiff's stock, where the plaintiff's signature was forged on transfer indorsements of shares, was, by virtue of Rhode Island conflict of laws rules, subject to the Oklahoma statute of limitations; the applicable time was the five-year limitation for actions not otherwise provided for. See Reinhard v. Textron, Inc., 516 P.2d 1325 (Okla. 1973).

The Securities Transfer Association has promulgated rules dealing with indorsements. Rule 1.02 provides that an indorsement by the individual and a signature guaranty are required when transfer by an individual acting in his or her individual capacity occurs. An individual whose name has changed may transfer securities into his or her name by indorsement in the form "JANE DOE SMITH FORMERLY JANE DOE" (with signature guaranteed).

Rule 1.03 provides that a security owner who cannot write his or her name may indorse a security with a mark and a signature guaranty if the indorsement is witnessed by two persons, neither of whom is the transferee of the security being indorsed. The witnesses should state in writing that the transfer instrument was read to the transferor in their presence, the transferor made his or her mark in their presence, and the transferor signified an intention to transfer the security.

Rule 1.05 provides that indorsement by facsimile signature without signature guaranty is acceptable if there is a sufficient indemnity bond for loss protection and the processor can verify the facsimile. Verification may be by "signature card" or by a local correspondent of the indorser. Rule 1.06 provides that in the event a processor is given two indorsements (with signature guaranteed) of the same security to different transferees, and one transferee was named later than the other, then the processor may transfer to the later-named transferee if the earlier named transferee's release is obtained with signature guaranteed, or satisfactory indemnification is obtained from the later-named transferee.

Rule 1.07 provides that if a certificate of one denomination is offered for split-up into certificates of smaller denominations in the same name, then an indorsement is not required. Likewise, an indorsement is not necessary if a number of certificates in the same name are offered for combination into a certificate of one denomination. The issuance of permanent or new forms of certificates in exchange for temporary or old forms of certificates in the same name does not require indorsement. See also UCC § 8-401, Oklahoma Comment.

Prior Statutory Provisions:

18 Okla. Stat. §§ 1.85, 1.89, 1.92, 1.93, 1.107, 1.108 (1947).

48 Okla. Stat. § 81-101, 144-150, 393 (1910).

Pre-revision UCC §§ 8-307, 8-308, 8-309, 8-310.