N.Y. UCC Law § 3-417

Section 3--417. Warranties on Presentment and Transfer.\n (1) Any person who obtains payment or acceptance and any prior\ntransferor warrants to a person who in good faith pays or accepts that\n (a) he has a good title to the instrument or is authorized to\n obtain payment or acceptance on behalf of one who has a good\n title; and\n (b) he has no knowledge that the signature of the maker or drawer\n is unauthorized, except that this warranty is not given by a\n holder in due course acting in good faith\n (i) to a maker with respect to the maker's own signature; or\n (ii) to a drawer with respect to the drawer's own signature,\n whether or not the drawer is also the drawee; or\n (iii) to an acceptor of a draft if the holder in due course\n took the draft after the acceptance or obtained the\n acceptance without knowledge that the drawer's signature\n was unauthorized; and\n (c) the instrument has not been materially altered, except that\n this warranty is not given by a holder in due course acting\n in good faith\n (i) to the maker of a note; or\n (ii) to the drawer of a draft whether or not the drawer is\n also the drawee; or\n (iii) to the acceptor of a draft with respect to an alteration\n made prior to the acceptance if the holder in due course\n took the draft after the acceptance, even though the\n acceptance provided "payable as originally drawn" or\n equivalent terms; or\n (iv) to the acceptor of a draft with respect to an alteration\n made after the acceptance.\n (2) Any person who transfers an instrument and receives consideration\nwarrants to his transferee and if the transfer is by indorsement to any\nsubsequent holder who takes the instrument in good faith that\n (a) he has a good title to the instrument or is authorized to\n obtain payment or acceptance on behalf of one who has a good\n title and the transfer is otherwise rightful; and\n (b) all signatures are genuine or authorized; and\n (c) the instrument has not been materially altered; and\n (d) no defense of any party is good against him; and\n (e) he has no knowledge of any insolvency proceeding instituted\n with respect to the maker or acceptor or the drawer of an\n unaccepted instrument.\n (3) By transferring "without recourse" the transferor limits the\nobligation stated in subsection (2) (d) to a warranty that he has no\nknowledge of such a defense.\n (4) A selling agent or broker who does not disclose the fact that he\nis acting only as such gives the warranties provided in this section,\nbut if he makes such disclosure warrants only his good faith and\nauthority.\n