The first indorsement in a chain of transfers of a mortgage note was simply a stamp, without an accompanying signature or initials. After falling behind on mortgage payments, Bass, relying on Econo-Travel Motor Hotel Corp. v. Taylor, 301 N.C. 200 (1980), challenged the standing of U.S. Bank as the holder of the note, arguing that it had not been properly indorsed.
The North Carolina Supreme Court rejected this argument relying on the broad definition of “signature” in the Uniform Commercial Code (UCC), at N.C.G.S. § 25-3-201(b)(37), as “any symbol executed or adopted with present intention to adopt or accept a writing.” As the official comment to the UCC includes that such symbol can be “printed, stamped or written; it may be by initials or by thumbprint”, the term “signature” is not limited to “a long-form writing of an individual person’s name.” Bass at 7. The Court distinguished Econ-Travel as a case where the note lacked any indicia of indorsement. Accordingly, the stamp was “an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement.” N.C.G.S. § 25-3-204(a) (emphasis added in the opinion.) Further, due to the presumption in the UCC in favor of the authenticity of signatures, N.C.G.S. § 25-3-308(a), Bass, and not U.S. Bank, bore the burden of making some sufficient showing that the stamp was valid.
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