(a) If an impostor, by use of the mails or otherwise, induces the issuer ofan instrument to issue the instrument to the impostor, or to a person actingin concert with the impostor, by impersonating the payee of the instrument ora person authorized to act for the payee, an endorsement of the instrument byany person in the name of the payee is effective as the endorsement of thepayee in favor of a person who, in good faith, pays the instrument or takesit for value or for collection.
(b) If (i) a person whose intent determines to whom an instrument is payable(§ 8.3A-110 (a) or (b)) does not intend the person identified as payee tohave any interest in the instrument, or (ii) the person identified as payeeof an instrument is a fictitious person, the following rules apply until theinstrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is its holder.
(2) An endorsement by any person in the name of the payee stated in theinstrument is effective as the endorsement of the payee in favor of a personwho, in good faith, pays the instrument or takes it for value or forcollection.
(c) Under subsection (a) or (b), an endorsement is made in the name of apayee if (i) it is made in a name substantially similar to that of the payeeor (ii) the instrument, whether or not endorsed, is deposited in a depositarybank to an account in a name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a) or (b) applies, ifa person paying the instrument or taking it for value or for collection failsto exercise ordinary care in paying or taking the instrument and that failuresubstantially contributes to loss resulting from payment of the instrument,the person bearing the loss may recover from the person failing to exerciseordinary care to the extent the failure to exercise ordinary care contributedto the loss.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
(a) If an impostor, by use of the mails or otherwise, induces the issuer ofan instrument to issue the instrument to the impostor, or to a person actingin concert with the impostor, by impersonating the payee of the instrument ora person authorized to act for the payee, an endorsement of the instrument byany person in the name of the payee is effective as the endorsement of thepayee in favor of a person who, in good faith, pays the instrument or takesit for value or for collection.
(b) If (i) a person whose intent determines to whom an instrument is payable(§ 8.3A-110 (a) or (b)) does not intend the person identified as payee tohave any interest in the instrument, or (ii) the person identified as payeeof an instrument is a fictitious person, the following rules apply until theinstrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is its holder.
(2) An endorsement by any person in the name of the payee stated in theinstrument is effective as the endorsement of the payee in favor of a personwho, in good faith, pays the instrument or takes it for value or forcollection.
(c) Under subsection (a) or (b), an endorsement is made in the name of apayee if (i) it is made in a name substantially similar to that of the payeeor (ii) the instrument, whether or not endorsed, is deposited in a depositarybank to an account in a name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a) or (b) applies, ifa person paying the instrument or taking it for value or for collection failsto exercise ordinary care in paying or taking the instrument and that failuresubstantially contributes to loss resulting from payment of the instrument,the person bearing the loss may recover from the person failing to exerciseordinary care to the extent the failure to exercise ordinary care contributedto the loss.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
(a) If an impostor, by use of the mails or otherwise, induces the issuer ofan instrument to issue the instrument to the impostor, or to a person actingin concert with the impostor, by impersonating the payee of the instrument ora person authorized to act for the payee, an endorsement of the instrument byany person in the name of the payee is effective as the endorsement of thepayee in favor of a person who, in good faith, pays the instrument or takesit for value or for collection.
(b) If (i) a person whose intent determines to whom an instrument is payable(§ 8.3A-110 (a) or (b)) does not intend the person identified as payee tohave any interest in the instrument, or (ii) the person identified as payeeof an instrument is a fictitious person, the following rules apply until theinstrument is negotiated by special endorsement:
(1) Any person in possession of the instrument is its holder.
(2) An endorsement by any person in the name of the payee stated in theinstrument is effective as the endorsement of the payee in favor of a personwho, in good faith, pays the instrument or takes it for value or forcollection.
(c) Under subsection (a) or (b), an endorsement is made in the name of apayee if (i) it is made in a name substantially similar to that of the payeeor (ii) the instrument, whether or not endorsed, is deposited in a depositarybank to an account in a name substantially similar to that of the payee.
(d) With respect to an instrument to which subsection (a) or (b) applies, ifa person paying the instrument or taking it for value or for collection failsto exercise ordinary care in paying or taking the instrument and that failuresubstantially contributes to loss resulting from payment of the instrument,the person bearing the loss may recover from the person failing to exerciseordinary care to the extent the failure to exercise ordinary care contributedto the loss.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
