§ 8.3A-405. Employer's responsibility for fraudulent endorsement by employee.
(a) In this section:
(1) "Employee" includes an independent contractor and employee of anindependent contractor retained by the employer.
(2) "Fraudulent endorsement" means (i) in the case of an instrument payableto the employer, a forged endorsement purporting to be that of the employer,or (ii) in the case of an instrument with respect to which the employer isthe issuer, a forged endorsement purporting to be that of the personidentified as payee.
(3) "Responsibility" with respect to instruments means authority (i) tosign or endorse instruments on behalf of the employer, (ii) to processinstruments received by the employer for bookkeeping purposes, for deposit toan account, or for other disposition, (iii) to prepare or process instrumentsfor issue in the name of the employer, (iv) to supply information determiningthe names or addresses of payees of instruments to be issued in the name ofthe employer, (v) to control the disposition of instruments to be issued inthe name of the employer, or (vi) to act otherwise with respect toinstruments in a responsible capacity. "Responsibility" does not includeauthority that merely allows an employee to have access to instruments orblank or incomplete instrument forms that are being stored or transported orare part of incoming or outgoing mail, or similar access.
(b) For the purpose of determining the rights and liabilities of a personwho, in good faith, pays an instrument or takes it for value or forcollection, if an employer entrusted an employee with responsibility withrespect to the instrument and the employee or a person acting in concert withthe employee makes a fraudulent endorsement of the instrument, theendorsement is effective as the endorsement of the person to whom theinstrument is payable if it is made in the name of that person. If theperson 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 the fraud, the personbearing the loss may recover from the person failing to exercise ordinarycare to the extent the failure to exercise ordinary care contributed to theloss.
(c) Under subsection (b), an endorsement is made in the name of the person towhom an instrument is payable if (i) it is made in a name substantiallysimilar to the name of that person or (ii) the instrument, whether or notendorsed, is deposited in a depositary bank to an account in a namesubstantially similar to the name of that person.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
§ 8.3A-405. Employer's responsibility for fraudulent endorsement by employee.
(a) In this section:
(1) "Employee" includes an independent contractor and employee of anindependent contractor retained by the employer.
(2) "Fraudulent endorsement" means (i) in the case of an instrument payableto the employer, a forged endorsement purporting to be that of the employer,or (ii) in the case of an instrument with respect to which the employer isthe issuer, a forged endorsement purporting to be that of the personidentified as payee.
(3) "Responsibility" with respect to instruments means authority (i) tosign or endorse instruments on behalf of the employer, (ii) to processinstruments received by the employer for bookkeeping purposes, for deposit toan account, or for other disposition, (iii) to prepare or process instrumentsfor issue in the name of the employer, (iv) to supply information determiningthe names or addresses of payees of instruments to be issued in the name ofthe employer, (v) to control the disposition of instruments to be issued inthe name of the employer, or (vi) to act otherwise with respect toinstruments in a responsible capacity. "Responsibility" does not includeauthority that merely allows an employee to have access to instruments orblank or incomplete instrument forms that are being stored or transported orare part of incoming or outgoing mail, or similar access.
(b) For the purpose of determining the rights and liabilities of a personwho, in good faith, pays an instrument or takes it for value or forcollection, if an employer entrusted an employee with responsibility withrespect to the instrument and the employee or a person acting in concert withthe employee makes a fraudulent endorsement of the instrument, theendorsement is effective as the endorsement of the person to whom theinstrument is payable if it is made in the name of that person. If theperson 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 the fraud, the personbearing the loss may recover from the person failing to exercise ordinarycare to the extent the failure to exercise ordinary care contributed to theloss.
(c) Under subsection (b), an endorsement is made in the name of the person towhom an instrument is payable if (i) it is made in a name substantiallysimilar to the name of that person or (ii) the instrument, whether or notendorsed, is deposited in a depositary bank to an account in a namesubstantially similar to the name of that person.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
§ 8.3A-405. Employer's responsibility for fraudulent endorsement by employee.
(a) In this section:
(1) "Employee" includes an independent contractor and employee of anindependent contractor retained by the employer.
(2) "Fraudulent endorsement" means (i) in the case of an instrument payableto the employer, a forged endorsement purporting to be that of the employer,or (ii) in the case of an instrument with respect to which the employer isthe issuer, a forged endorsement purporting to be that of the personidentified as payee.
(3) "Responsibility" with respect to instruments means authority (i) tosign or endorse instruments on behalf of the employer, (ii) to processinstruments received by the employer for bookkeeping purposes, for deposit toan account, or for other disposition, (iii) to prepare or process instrumentsfor issue in the name of the employer, (iv) to supply information determiningthe names or addresses of payees of instruments to be issued in the name ofthe employer, (v) to control the disposition of instruments to be issued inthe name of the employer, or (vi) to act otherwise with respect toinstruments in a responsible capacity. "Responsibility" does not includeauthority that merely allows an employee to have access to instruments orblank or incomplete instrument forms that are being stored or transported orare part of incoming or outgoing mail, or similar access.
(b) For the purpose of determining the rights and liabilities of a personwho, in good faith, pays an instrument or takes it for value or forcollection, if an employer entrusted an employee with responsibility withrespect to the instrument and the employee or a person acting in concert withthe employee makes a fraudulent endorsement of the instrument, theendorsement is effective as the endorsement of the person to whom theinstrument is payable if it is made in the name of that person. If theperson 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 the fraud, the personbearing the loss may recover from the person failing to exercise ordinarycare to the extent the failure to exercise ordinary care contributed to theloss.
(c) Under subsection (b), an endorsement is made in the name of the person towhom an instrument is payable if (i) it is made in a name substantiallysimilar to the name of that person or (ii) the instrument, whether or notendorsed, is deposited in a depositary bank to an account in a namesubstantially similar to the name of that person.
(Code 1950, § 6-361; 1956, c. 149; 1964, c. 219, § 8.3-405; 1992, c. 693.)
