California Commercial Code

§ 3404

COM § 3404 Effective Jan 1, 1993Div. 3 · Ch. 4

Statute text

(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 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.

(b)If (i) a person whose intent determines to whom an instrument is payable (subdivision (a) or (b) of Section 3110) 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:

(1)Any person in possession of the instrument is its holder.

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Legislative history

Repealed and added by Stats. 1992, Ch. 914, Sec. 6. Effective January 1, 1993.