Section 3--201. Transfer: Right to Indorsement

(1)  Transfer  of an instrument vests in the transferee such rights as
  the transferor has therein, except that a  transferee  who  has  himself
  been  a party to any fraud or illegality affecting the instrument or who
  as a prior holder had notice of a defense or  claim  against  it  cannot
  improve his position by taking from a later holder in due course.
    (2)  A  transfer  of  a  security  interest in an instrument vests the
  foregoing rights in  the  transferee  to  the  extent  of  the  interest
  transferred.
    (3)  Unless  otherwise  agreed any transfer for value of an instrument
  not then  payable  to  bearer  gives  the  transferee  the  specifically
  enforceable right to have the unqualified indorsement of the transferor.
  Negotiation  takes  effect  only  when the indorsement is made and until
  that time there is no presumption that the transferee is the owner.