26-2a Blank Indorsements A blank indorsement does not specify a particular indorsee and can consist of a mere signature (UCC negotiation need to contain individual's name? That was the question in the follow- ing case. Case 26.1 In re Bass Supreme Court of North Carolina, 738 S.E.2d 173 (2013). Background and Facts Tonya Bass signed a note with Mortgage Lenders Network USA, Inc., to borrow $139,988, repayable with interest in monthly installments of $810.75, to buy a house in Durham County, North Carolina. The note was transferred by stamped imprints to Emax Financial Group LLC, then to Residential Funding Corporation, and finally to U.S. Bank N.A. When Bass stop- ping paying on the note, U.S. Bank filed an action in a North Carolina state court to foreclose. The court issued an order permitting the foreclosure to proceed, and Bass appealed. She argued that the stamp transferring the note from Mortgage lenders to Emax was invalid because it was not accompa- nied by a signature. A state intermediate appellate court issued a decision in Bass's favor based on the lack of a "proper indorsement." U.S. Bank appealed. In the Language of the Court MARTIN, Justice. The UCC defines "signature" broadly, as "any symbol executed or adopted with present intention to adopt or accept a writing." The official comment explains that CHAPTER 26 Transferability and Holder in Due Course 481 5.1 Continued as the term "god" is used in the Uniform Commercial Code, a complete signature is not necessary. The ymbol may be printed, stamped or written; it may be by initials or by thumbprint. It may be on any part of the document and in appropriate cases may be found in a billhead or letterhead. No catalog of possible situ- ations can be complete and the court must use common sense and commercial experience in passing upon these matters. The question always is whether the symbol was executed or adopted by the party with present intention to adopt or accept the writing. Thus, the UCC does not limit a signature to a long-form writing of an individual person's name. Under this broad definition, the authenticating intent is sufficiently shown by the fact that the name of a party is written on the line which calls for the name of that party. Even if there might be some irregulari- ties in the signature, the necessary intent can still be found based on the signature itself and other atten- dant circumstances. (Emphasis added.] *** (Bass) asserts the stamp by Mortgage Lenders does not qualify as an indorsement under [North Carolina General Statutes (N.C.G.S.) Section 25-3-204(a) [North Carolina's version of UCC 3-204(a)]. She contends) that an indorsement must include some representation of an individual signa- ture to be valid. The contested stamp indicates on its face an intent to transfer the debt from Mortgage Lenders to Emax: Pay to the order of Emax Financial Group, LLC without recourse By: Mortgage Lenders Network USA, Inc. In addition, the stamp appears on the page of the Note where other, uncontested indorsements were placed. We also observe that the original Note was indeed transferred in accordance with the stamp's clear intent. The stamp evidences that it was executed on adopted by the party with present intention to adopt or accept the writing. Under the broad definition of "signature" and the accompanying official comment, the stamp by Mortgage Lenders constitutes a signature. *** With no unambiguous evidence indicating the signature was made for any other purpose, the stamp was an indorsement that transferred the Note from Mortgage Lenders to Emax. Decision and Remedy The North Carolina Supreme Court reversed the decision of the lower court and held that U.S. Bank was the holder of the note. The indorsements on the note unambiguously indicated the intent of each creditor to transfer the note to a succeeding tender and finally to U.S. Bank. Critical Thinking Legal Environment Even though forged or unauthorized signatures on negotiable instruments are uncommon, should U.S. Banke have had to prove that the indorsements on this noteere valid and autho rized? Why or why not? Economic How does the presumption that an indorsement is legitimate without ambiguous evidence to the contrary" protect the transferability of a negotiable instrument? Critical Thinking Legal Environment Even though forged or unauthorized signatures on negotiable instruments are uncommon, should U.S. Bank have had to prove that the indorsements on this note were valid and autho- rized? Why or why not? Economic How does the presumption that an indorsement is legitimate without unambiguous evidence to the contrary" protect the transferability of a negotiable instrument? 26-2a Blank Indorsements A blank indorsement does not specify a particular indorsee and can consist of a mere signature (UCC negotiation need to contain individual's name? That was the question in the follow- ing case. Case 26.1 In re Bass Supreme Court of North Carolina, 738 S.E.2d 173 (2013). Background and Facts Tonya Bass signed a note with Mortgage Lenders Network USA, Inc., to borrow $139,988, repayable with interest in monthly installments of $810.75, to buy a house in Durham County, North Carolina. The note was transferred by stamped imprints to Emax Financial Group LLC, then to Residential Funding Corporation, and finally to U.S. Bank N.A. When Bass stop- ping paying on the note, U.S. Bank filed an action in a North Carolina state court to foreclose. The court issued an order permitting the foreclosure to proceed, and Bass appealed. She argued that the stamp transferring the note from Mortgage lenders to Emax was invalid because it was not accompa- nied by a signature. A state intermediate appellate court issued a decision in Bass's favor based on the lack of a "proper indorsement." U.S. Bank appealed. In the Language of the Court MARTIN, Justice. The UCC defines "signature" broadly, as "any symbol executed or adopted with present intention to adopt or accept a writing." The official comment explains that CHAPTER 26 Transferability and Holder in Due Course 481 5.1 Continued as the term "god" is used in the Uniform Commercial Code, a complete signature is not necessary. The ymbol may be printed, stamped or written; it may be by initials or by thumbprint. It may be on any part of the document and in appropriate cases may be found in a billhead or letterhead. No catalog of possible situ- ations can be complete and the court must use common sense and commercial experience in passing upon these matters. The question always is whether the symbol was executed or adopted by the party with present intention to adopt or accept the writing. Thus, the UCC does not limit a signature to a long-form writing of an individual person's name. Under this broad definition, the authenticating intent is sufficiently shown by the fact that the name of a party is written on the line which calls for the name of that party. Even if there might be some irregulari- ties in the signature, the necessary intent can still be found based on the signature itself and other atten- dant circumstances. (Emphasis added.] *** (Bass) asserts the stamp by Mortgage Lenders does not qualify as an indorsement under [North Carolina General Statutes (N.C.G.S.) Section 25-3-204(a) [North Carolina's version of UCC 3-204(a)]. She contends) that an indorsement must include some representation of an individual signa- ture to be valid. The contested stamp indicates on its face an intent to transfer the debt from Mortgage Lenders to Emax: Pay to the order of Emax Financial Group, LLC without recourse By: Mortgage Lenders Network USA, Inc. In addition, the stamp appears on the page of the Note where other, uncontested indorsements were placed. We also observe that the original Note was indeed transferred in accordance with the stamp's clear intent. The stamp evidences that it was executed on adopted by the party with present intention to adopt or accept the writing. Under the broad definition of "signature" and the accompanying official comment, the stamp by Mortgage Lenders constitutes a signature. *** With no unambiguous evidence indicating the signature was made for any other purpose, the stamp was an indorsement that transferred the Note from Mortgage Lenders to Emax. Decision and Remedy The North Carolina Supreme Court reversed the decision of the lower court and held that U.S. Bank was the holder of the note. The indorsements on the note unambiguously indicated the intent of each creditor to transfer the note to a succeeding tender and finally to U.S. Bank. Critical Thinking Legal Environment Even though forged or unauthorized signatures on negotiable instruments are uncommon, should U.S. Banke have had to prove that the indorsements on this noteere valid and autho rized? Why or why not? Economic How does the presumption that an indorsement is legitimate without ambiguous evidence to the contrary" protect the transferability of a negotiable instrument? Critical Thinking Legal Environment Even though forged or unauthorized signatures on negotiable instruments are uncommon, should U.S. Bank have had to prove that the indorsements on this note were valid and autho- rized? Why or why not? Economic How does the presumption that an indorsement is legitimate without unambiguous evidence to the contrary" protect the transferability of a negotiable instrument