Court Opinion

ID: 9754456
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:01:30.78832+00
Date Added: 2024-06-11T07:27:53.642372
License: Public Domain

McAnany, J.,
concurring in part and dissenting in part: I agree with the majority’s analysis on the multiplicity issue. Coleman’s possessing the fraudulent check and then transferring it to another *672were not separate crimes for which he could be convicted and punished twice. But I disagree with the majority’s analysis of the alternative means issue and the holding in State v. Foster, 46 Kan. App. 2d 233, 264 P.3d 116 (2011), rev. granted 293 Kan. 1109 (2012), upon which it relies.
I agree with the Foster analysis with respect to the “issuing or delivering” of a negotiable instrument. These are not alternative means by which an instrument is transferred. In fact, K.S.A. 84-3-105(a) defines the issuance of an instrument as the “first delivery of an instrument.” Nevertheless, I disagree with the majority’s contention that “making, altering, or endorsing” are all related to the creation of an instrument.
A negotiable instrument, also referred to in the Uniform Commercial Code as simply an instrument, is an unconditional promise or order to pay a fixed amount of money that is payable to bearer or to order when issued and is payable on demand or at a definite time. K.S.A. 2011 Supp. 84-3-104(a). Creating a document with these features is how a negotiable instrument is made. The creation of such a document has nothing to do with its subsequent endorsement.
Under K.S.A. 84-3-105(a), an instrument is issued when there is the initial deliveiy of the instrument by its maker or drawer. “Drawer” means a person who signs or is identified in the draft as the person ordering payment. K.S.A. 2011 Supp. 84-3-103(3). Endorsement is not part of the issuance of an instrument.
Under K.S.A. 84-3-201(a), negotiation of an instrument means a transfer of possession by a person other than the issuer. Negotiation requires the holder to transfer possession and endorse the instrument. Thus, it is clear that the maker of an instrument does not negotiate it, but a later holder does so after the instrument has been created and issued. As the Official UCC Comment 1 to K.S.A. 84-3-201 notes: “ ‘Negotiation’ is the term used in Article 3 to describe this post-issuance event.”
Under K.S.A. 84-3-204(a), an endorsement is a signature other than that of a signer as maker, made on the instrument for the purpose of negotiating it. Thus, an endorsement is the signature of a later holder of the instrument, not its maker.
*673If an instrument is transferred for value and there is no endorsement of the instrument in order to malee the transferee a holder, under K.S.A. 84-3-203 the transferee has the right to require the transferor to endorse the instrument. But in any event, transfer does not occur until the endorsement is made. Thus, an endorsement is a necessary element to effect the transfer of an instrument that has already been created. Endorsing an instrument is not part of creating or issuing an instrument.
Finally, K.S.A. 84-3-405 deals with an employer s responsibility for a fraudulent endorsement by an employee. Under this provision, when an instrument is payable to an employer, it is fraudulently endorsed when it contains a forged endorsement purporting to be that of the employer. When tire instrument has been issued by the employer, it is fraudulently endorsed when it contains a forged endorsement purporting to be that of the payee of the instrument. Again, endorsement relates to the disposition of an instrument after it has been made and issued. It does not relate to the making and issuing of the instrument in the first instance.
With respect to the alteration of an instrument, K.S.A. 84-3-407(a) defines “alteration” as an unauthorized change in an instrument or an unauthorized addition of words or numbers or other changes to an incomplete instrument. An alteration also appears to relate to conduct after an instrument has been made and issued.
My examination of the statutory scheme tells me that the legislature has drawn a clear distinction between the making of an instrument, any subsequent alteration of the instrument, and its later endorsement when the instrument is transferred after issuance. This is consistent with what I perceive to be the universal practice in the banking and business communities. The majority relies on Foster for tire proposition that making, altering, and endorsing an instrument are part of the creation of an instrument. I disagree. I would hold that to avoid the adverse consequences of the alternative means doctrine, the State was required to show that there was substantial evidence presented at trial that Coleman performed each separate act of making, altering, and endorsing the instrument.