§12A-3-206.

§12A-3-206.
   
                          RESTRICTIVE INDORSEMENT
                                      
   (a) An indorsement limiting payment to a particular person or
   otherwise prohibiting further transfer or negotiation of the
   instrument is not effective to prevent further transfer or negotiation
   of the instrument.
   
   (b) An indorsement stating a condition to the right of the indorsee to
   receive payment does not affect the right of the indorsee to enforce
   the instrument. A person paying the instrument or taking it for value
   or collection may disregard the condition, and the rights and
   liabilities of that person are not affected by whether the condition
   has been fulfilled.
   
   (c) If an instrument bears an indorsement (i) described in subsection
   (b) of Section 4-201 of this title, or (ii) in blank or to a
   particular bank using the words "for deposit", "for collection", or
   other words indicating a purpose of having the instrument collected by
   a bank for the indorser or for a particular account, the following
   rules apply:
   
   (1) A person, other than a bank, who purchases the instrument when so
   indorsed converts the instrument unless the amount paid for the
   instrument is received by the indorser or applied consistently with
   the indorsement;
   
   (2) A depositary bank that purchases the instrument or takes it for
   collection when so indorsed converts the instrument unless the amount
   paid by the bank with respect to the instrument is received by the
   indorser or applied consistently with the indorsement;
   
   (3) A payor bank that is also the depositary bank or that takes the
   instrument for immediate payment over the counter from a person other
   than a collecting bank converts the instrument unless the proceeds of
   the instrument are received by the indorser or applied consistently
   with the indorsement; and
   
   (4) Except as otherwise provided in paragraph (3) of this subsection,
   a payor bank or intermediary bank may disregard the indorsement and is
   not liable if the proceeds of the instrument are not received by the
   indorser or applied consistently with the indorsement.
   
   (d) Except for an indorsement covered by subsection (c) of this
   section, if an instrument bears an indorsement using words to the
   effect that payment is to be made to the indorsee as agent, trustee,
   or other fiduciary for the benefit of the indorser or another person,
   the following rules apply:
   
   (1) Unless there is notice of breach of fiduciary duty as provided in
   Section 3-307 of this title, a person who purchases the instrument
   from the indorsee or takes the instrument from the indorsee for
   collection or payment may pay the proceeds of payment or the value
   given for the instrument to the indorsee without regard to whether the
   indorsee violates a fiduciary duty to the indorser; and
   
   (2) A subsequent transferee of the instrument or person who pays the
   instrument is neither given notice nor otherwise affected by the
   restriction in the indorsement unless the transferee or payor knows
   that the fiduciary dealt with the instrument or its proceeds in breach
   of fiduciary duty.
   
   (e) The presence on an instrument of an indorsement to which this
   section applies does not prevent a purchaser of the instrument from
   becoming a holder in due course of the instrument unless the purchaser
   is a converter under subsection (c) of this section or has notice or
   knowledge of breach of fiduciary duty as stated in subsection (d) of
   this section.
   
   (f) In an action to enforce the obligation of a party to pay the
   instrument, the obligor has a defense if payment would violate an
   indorsement to which this section applies and the payment is not
   permitted by this section.