Sec. 42a-3-404. Impostors. Fictitious payees. - Connecticut Statutes

      Sec. 42a-3-404. Impostors. Fictitious payees. (a) 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 endorsement of the instrument by any person in the name of the payee is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

      (b) If (i) a person whose intent determines to whom an instrument is payable, as provided in subsection (a) or (b) of section 42a-3-110, 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 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 the instrument is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

      (c) Under subsection (a) or (b), an endorsement 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 endorsed, is deposited in a depositary bank 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, 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.

      (1959, P.A. 133, S. 3-404; P.A. 91-304, S. 41; May Sp. Sess. P.A. 92-11, S. 17, 70.)

      History: P.A. 91-304 entirely replaced former provisions re unauthorized signatures with provisions re impostors and fictitious payees, a restatement in part of Sec. 42a-3-405(1)(a) and (b), revised to 1991; May Sp. Sess. P.A. 92-11 made technical changes in Subsecs. (b) and (c).

      See Sec. 42a-3-403(a) for successor provisions to Sec. 42a-3-404, revised to 1991, re unauthorized signatures.

      Annotations to former statute (1958 Rev., S. 39-24):

      Purchaser of note bearing forged endorsement allowed to recover from seller. 26 C. 23. Effect of forged bill of lading deposited with draft. 82 C. 227. Surrender of forged note not a good consideration. 89 C. 592. Payment, by mistake, of a forged instrument by purported maker does not entitle him to recover sum so paid if, in fact, he owed it to person to whom it was paid. 92 C. 671. Drawee bank which pays on forged endorsement of payee's name in ignorance of forgery may recover from presenting bank. 123 C. 622. Where plaintiff's negligence was cause of loss, it could not recover even where payee's endorsement was a forgery. 138 C. 298.

      Annotations to present section:

      Cited. 171 C. 63; Id., 63.

      Cited. 34 CS 606.