N.Y. U.C.C. 3-206

Section 3--206. Effect of Restrictive Indorsement.\n (1) No restrictive indorsement prevents further transfer or\nnegotiation of the instrument.\n (2) An intermediary bank, or a payor bank which is not the depositary\nbank, is neither given notice nor otherwise affected by a restrictive\nindorsement of any person except the bank's immediate transferor or the\nperson presenting for payment.\n (3) Except for an intermediary bank, any transferee under an\nindorsement which is conditional or includes the words "for collection",\n"for deposit", "pay any bank", or like terms (subparagraphs (a) and (c)\nof Section 3--205) must pay or apply any value given by him for or on\nthe security of the instrument consistently with the indorsement and to\nthe extent that he does so he becomes a holder for value. In addition\nsuch transferee is a holder in due course if he otherwise complies with\nthe requirements of Section 3--302 on what constitutes a holder in due\ncourse.\n (4) The first taker under an indorsement for the benefit of the\nindorser or another person (subparagraph (d) of Section 3--205) must pay\nor apply any value given by him for or on the security of the instrument\nconsistently with the indorsement and to the extent that he does so he\nbecomes a holder for value. In addition such taker is a holder in due\ncourse if he otherwise complies with the requirements of Section 3--302\non what constitutes a holder in due course. A later holder for value is\nneither given notice nor otherwise affected by such restrictive\nindorsement unless he has knowledge that a fiduciary or other person has\nnegotiated the instrument in any transaction for his own benefit or\notherwise in breach of duty (subsection (2) of Section 3--304).\n