KRS 355.3-205: Special indorsement -- Blank indorsement -- Anomalous indorsement.

(1) If an indorsement is made by the holder of an instrument, whether payable to an

identified person or payable to bearer, and the indorsement identifies a person to

whom it makes the instrument payable, it is a "special indorsement." When

specially indorsed, an instrument becomes payable to the identified person and may

be negotiated only by the indorsement of that person. The principles stated in KRS

355.3-110 apply to special indorsements.

(2) If an indorsement is made by the holder of an instrument and it is not a special

indorsement, it is a "blank indorsement." When indorsed in blank, an instrument

becomes payable to bearer and may be negotiated by transfer of possession alone

until specially indorsed.

(3) The holder may convert a blank indorsement that c onsists only of a signature into a

special indorsement by writing, above the signature of the indorser, words

identifying the person to whom the instrument is made payable.

(4) "Anomalous indorsement" means an indorsement made by a person who is not the

holder of the instrument. An anomalous indorsement does not affect the manner in

which the instrument may be negotiated.