400.3-404. (a) If an impostor, by use of the mails orotherwise, induces the issuer of an instrument to issue theinstrument to the impostor, or to a person acting in concert withthe impostor, by impersonating the payee of the instrument or aperson authorized to act for the payee, an endorsement of theinstrument by any person in the name of the payee is effective asthe endorsement of the payee in favor of a person who, in goodfaith, pays the instrument or takes it for value or forcollection.
(b) If (i) a person whose intent determines to whom aninstrument is payable (Section 400.3-110(a) or (b)) does notintend the person identified as payee to have any interest in theinstrument, or (ii) the person identified as payee of aninstrument is a fictitious person, the following rules applyuntil the instrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is itsholder.
(2) An endorsement by any person in the name of the payeestated in the instrument is effective as the endorsement of thepayee in favor of a person who, in good faith, pays theinstrument or takes it for value or for collection.
(c) Under subsection (a) or (b), an endorsement is made inthe name of a payee if (i) it is made in a name substantiallysimilar to that of the payee or (ii) the instrument, whether ornot endorsed, is deposited in a depositary bank to an account ina name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a)or (b) applies, if a person paying the instrument or taking itfor value or for collection fails to exercise ordinary care inpaying or taking the instrument and that failure substantiallycontributes to loss resulting from payment of the instrument, theperson bearing the loss may recover from the person failing toexercise ordinary care to the extent the failure to exerciseordinary care contributed to the loss.
(L. 1992 S.B. 448)
*No continuity with § 400.3-404 as repealed by L. 1992 S.B. 448.
400.3-404. (a) If an impostor, by use of the mails orotherwise, induces the issuer of an instrument to issue theinstrument to the impostor, or to a person acting in concert withthe impostor, by impersonating the payee of the instrument or aperson authorized to act for the payee, an endorsement of theinstrument by any person in the name of the payee is effective asthe endorsement of the payee in favor of a person who, in goodfaith, pays the instrument or takes it for value or forcollection.
(b) If (i) a person whose intent determines to whom aninstrument is payable (Section 400.3-110(a) or (b)) does notintend the person identified as payee to have any interest in theinstrument, or (ii) the person identified as payee of aninstrument is a fictitious person, the following rules applyuntil the instrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is itsholder.
(2) An endorsement by any person in the name of the payeestated in the instrument is effective as the endorsement of thepayee in favor of a person who, in good faith, pays theinstrument or takes it for value or for collection.
(c) Under subsection (a) or (b), an endorsement is made inthe name of a payee if (i) it is made in a name substantiallysimilar to that of the payee or (ii) the instrument, whether ornot endorsed, is deposited in a depositary bank to an account ina name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a)or (b) applies, if a person paying the instrument or taking itfor value or for collection fails to exercise ordinary care inpaying or taking the instrument and that failure substantiallycontributes to loss resulting from payment of the instrument, theperson bearing the loss may recover from the person failing toexercise ordinary care to the extent the failure to exerciseordinary care contributed to the loss.
(L. 1992 S.B. 448)
*No continuity with § 400.3-404 as repealed by L. 1992 S.B. 448.
400.3-404. (a) If an impostor, by use of the mails orotherwise, induces the issuer of an instrument to issue theinstrument to the impostor, or to a person acting in concert withthe impostor, by impersonating the payee of the instrument or aperson authorized to act for the payee, an endorsement of theinstrument by any person in the name of the payee is effective asthe endorsement of the payee in favor of a person who, in goodfaith, pays the instrument or takes it for value or forcollection.
(b) If (i) a person whose intent determines to whom aninstrument is payable (Section 400.3-110(a) or (b)) does notintend the person identified as payee to have any interest in theinstrument, or (ii) the person identified as payee of aninstrument is a fictitious person, the following rules applyuntil the instrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is itsholder.
(2) An endorsement by any person in the name of the payeestated in the instrument is effective as the endorsement of thepayee in favor of a person who, in good faith, pays theinstrument or takes it for value or for collection.
(c) Under subsection (a) or (b), an endorsement is made inthe name of a payee if (i) it is made in a name substantiallysimilar to that of the payee or (ii) the instrument, whether ornot endorsed, is deposited in a depositary bank to an account ina name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a)or (b) applies, if a person paying the instrument or taking itfor value or for collection fails to exercise ordinary care inpaying or taking the instrument and that failure substantiallycontributes to loss resulting from payment of the instrument, theperson bearing the loss may recover from the person failing toexercise ordinary care to the extent the failure to exerciseordinary care contributed to the loss.
(L. 1992 S.B. 448)
*No continuity with § 400.3-404 as repealed by L. 1992 S.B. 448.
