N.Y. U.C.C. 3-201

Section 3--201. Transfer: Right to Indorsement.\n (1) Transfer of an instrument vests in the transferee such rights as\nthe transferor has therein, except that a transferee who has himself\nbeen a party to any fraud or illegality affecting the instrument or who\nas a prior holder had notice of a defense or claim against it cannot\nimprove his position by taking from a later holder in due course.\n (2) A transfer of a security interest in an instrument vests the\nforegoing rights in the transferee to the extent of the interest\ntransferred.\n (3) Unless otherwise agreed any transfer for value of an instrument\nnot then payable to bearer gives the transferee the specifically\nenforceable right to have the unqualified indorsement of the transferor.\nNegotiation takes effect only when the indorsement is made and until\nthat time there is no presumption that the transferee is the owner.\n