Check Handling, Endorsements: Multiple Payees Endorsements
Printer-friendly VersionQuestion:
If for example a check is payable as follows:
John Doe
Jane Doe
Are both endorsements required on the check? We see this often from banks because of their software. I have been told it had to have "AND" in the title to require both endorsements. Is there a default of "AND" or "OR" in this situation?
John Doe
Jane Doe
Are both endorsements required on the check? We see this often from banks because of their software. I have been told it had to have "AND" in the title to require both endorsements. Is there a default of "AND" or "OR" in this situation?
Answer:
Good question. The law changed in 1996 to default to “either” where you have this sort of ambiguity! Here is the text from the UCC: 3.110 of Texas Business & Commerce Code, paragraph (d):
(d) If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. 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. 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.
In your case, the check is ambiguous. Therefore, it is payable to the persons alternatively, meaning either one may endorse.
(d) If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. 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. 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.
In your case, the check is ambiguous. Therefore, it is payable to the persons alternatively, meaning either one may endorse.