11 Am. Jur.

2d Bills and Notes § 179

American Jurisprudence, Second Edition

August 2017 Update

Bills and Notes

Jill Gustafson, J.D., Janice Holben, J.D., Jack K. Levin, J.D., Jeffrey J. Shampo, J.D., and Eleanor L.
Grossman, J.D. of the staff of the National Legal Research Group, Inc.

VI. Transfer, Negotiation, and Indorsement

A. Transfer, in General

§ 179. Transfer to and negotiation by multiple payees

Topic Summary | Correlation Table | References

West's Key Number Digest

 West's Key Number Digest, Bills and Notes 176, 203

Treatises and Practice Aids

 As to instruments payable to two or more persons, generally, see Lawrence's Anderson on the
Uniform Commercial Code, Article 3 [Rev] Negotiable Instruments [Westlaw®: Search Query]

An instrument payable to the order of two or more persons in the alternative is payable to any one of
them and may be negotiated, discharged, or enforced by any or all of them in possession of the
instrument.1 The purpose of this provision, providing the person in possession of an instrument, payable
to two or more persons alternatively, rights in the instrument which are superior to those of the joint
alternative payee who is not in possession of the instrument, is not to designate who owns an
instrument, but to designate who, as between copayees, has the right to negotiate that instrument. 2

If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may
be negotiated, discharged, or enforced only by all of them. 3 If an instrument payable to two or more
persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable
to the persons alternatively.4 Where the names of two indorsees on a cashier's check are separated by a
virgule symbol or a slash only, the check can be negotiated by only one indorsee. 5

The delivery of an instrument to one of the joint payees is delivery to all of them. 6 Thus, where one joint
payee takes and possesses a check, it suspends all obligations as to the other joint payees not in actual
possession of the check as the party possessing the draft holds the draft for the benefit of himself or
herself and the other payees.7
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Footnotes

U.C.C. § 3-110(d).

In re Ames Dept. Stores, Inc., 322 B.R. 238, 56 U.C.C. Rep. Serv. 2d 417 (Bankr. S.D. N.Y. 2005) (applying
Illinois law; one payee can endorse and negotiate a check without the other payee's consent or even
knowledge).

As to two or more payees as parties to an instrument, see § 58.

As to the discharge of instruments, see §§ 354 to 396.

Raichel v. Raichel, 65 S.W.3d 497, 46 U.C.C. Rep. Serv. 2d 173 (Ky. 2001).

U.C.C. § 3-110(d).

U.C.C. § 3-110(d).

Coregis Ins. Co. v. Fleet Nat. Bank, 68 Conn. App. 716, 793 A.2d 254, 47 U.C.C. Rep. Serv. 2d 1420 (2002).

New Wave Technologies, Inc. v. Legacy Bank of Texas, 66 U.C.C. Rep. Serv. 2d 113 (Tex. App. El Paso
2008), review denied, (Dec. 19, 2008); Mumma v. Rainier Nat. Bank, 60 Wash. App. 937, 808 P.2d 767, 14
U.C.C. Rep. Serv. 2d 1119 (Div. 1 1991).

Crystaplex Plastics, Ltd. v. Redevelopment Agency, 77 Cal. App. 4th 990, 92 Cal. Rptr. 2d 197, 40 U.C.C.
Rep. Serv. 2d 784 (4th Dist. 2000) (a supplier had been in possession of a check, and could potentially
recover against the drawer of the check, after a subcontractor cashed the check and did not pay the
supplier, even though the supplier had never been in physical possession of the check).

Graves v. Johnson, 862 N.E.2d 716 (Ind. Ct. App. 2007).

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