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Can you summarize MNST 336.3-404?
UNIFORM COMMERCIAL CODE > IMPOSTORS; FICTITIOUS PAYEES.
Short Summary
This legal provision, under the Uniform Commercial Code, addresses the issue of impostors and fictitious payees in relation to negotiable instruments. If an impostor induces the issuer of an instrument to issue it to the impostor or a person acting with the impostor, 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 pays the instrument or takes it in good faith. If the person intended to receive the instrument does not have any interest in it or if the payee is a fictitious person, certain rules apply until the instrument is negotiated by special endorsement. Any person in possession of the instrument becomes its holder, and an endorsement in the name of the payee stated in the instrument is effective in favor of a person who pays the instrument or takes it in good faith. The endorsement is considered to be made in the name of the payee if it is made in a name substantially similar to that of the payee or if the instrument is deposited in a depositary bank to an account in a name substantially similar to that of the payee. The provision also states that if a person paying or taking the instrument fails to exercise ordinary care and this failure contributes to a 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 that the failure contributed to the loss.
Whom does it apply to?
Issuers of instruments, persons acting in concert with impostors, persons in possession of the instrument
What does it govern?
Impostors; fictitious payees
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota