Section 3--208. Reacquisition

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Where  an  instrument is returned to or reacquired by a prior party he
  may cancel any indorsement which is  not  necessary  to  his  title  and
  reissue  or  further negotiate the instrument, but any intervening party
  is discharged as against the reacquiring party  and  subsequent  holders
  not  in  due  course  and  if  his  indorsement  has  been  cancelled is
  discharged as against subsequent holders in due course as well.

                    
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