28-3-404. IMPOSTORS — FICTITIOUS PAYEES. (1) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an indorsement of the instrument by any person in the name of the payee is effective as the indorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.
(2) If (i) a person whose intent determines to whom an instrument is payable (section 28-3-110(1) or (2)) does not intend the person identified as payee to have any interest in the instrument, or (ii) the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special indorsement:
(a) Any person in possession of the instrument is its holder.
(b) An indorsement by any person in the name of the payee stated in the instrument is effective as the indorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.
(3) Under subsection (1) or (2) of this section, an indorsement is made in the name of a payee if (i) it is made in a name substantially similar to that of the payee, or (ii) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee.
(4) With respect to an instrument to which subsection (1) or (2) of this section applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
History:
[28-3-404, added 1993, ch. 288, sec. 2, p. 1039.]
Structure Idaho Code
Title 28 - COMMERCIAL TRANSACTIONS
Chapter 3 - UNIFORM COMMERCIAL CODE — NEGOTIABLE INSTRUMENTS
Section 28-3-402 - SIGNATURE BY REPRESENTATIVE.
Section 28-3-403 - UNAUTHORIZED SIGNATURE.
Section 28-3-404 - IMPOSTORS — FICTITIOUS PAYEES.
Section 28-3-405 - EMPLOYER’S RESPONSIBILITY FOR FRAUDULENT INDORSEMENT BY EMPLOYEE.
Section 28-3-406 - NEGLIGENCE CONTRIBUTING TO FORGED SIGNATURE OR ALTERATION OF INSTRUMENT.
Section 28-3-407 - ALTERATION.
Section 28-3-408 - DRAWEE NOT LIABLE ON UNACCEPTED DRAFT.
Section 28-3-409 - ACCEPTANCE OF DRAFT — CERTIFIED CHECK.
Section 28-3-410 - ACCEPTANCE VARYING DRAFT.
Section 28-3-411 - REFUSAL TO PAY CASHIER’S CHECKS, TELLER’S CHECKS, AND CERTIFIED CHECKS.
Section 28-3-412 - OBLIGATION OF ISSUER OF NOTE OR CASHIER’S CHECK.
Section 28-3-413 - OBLIGATION OF ACCEPTOR.
Section 28-3-414 - OBLIGATION OF DRAWER.
Section 28-3-415 - OBLIGATION OF INDORSER.
Section 28-3-416 - TRANSFER WARRANTIES.
Section 28-3-417 - PRESENTMENT WARRANTIES.
Section 28-3-418 - PAYMENT OR ACCEPTANCE BY MISTAKE.