N.Y. U.C.C. 3-208

Section 3--208. Reacquisition.\n Where an instrument is returned to or reacquired by a prior party he\nmay cancel any indorsement which is not necessary to his title and\nreissue or further negotiate the instrument, but any intervening party\nis discharged as against the reacquiring party and subsequent holders\nnot in due course and if his indorsement has been cancelled is\ndischarged as against subsequent holders in due course as well.\n