2006 New York Code - Effect Of Restrictive Indorsement.

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