1. Ifan 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 itfor value or for collection. 2. If a person whose intent determines to whom an instrument is payable (section 554.3110, subsection 1 or 2) does not intend the person identified as payee to have any interest in the instrument, or the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument isnegotiated by special endorsement: a. Any person in possession of the instrument is itsholder. b. 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 itfor value or for collection. 3. Under subsection 1 or 2, an endorsement is made in the name of a payee ifit ismade in a name substantially similar to that of the payee or the instrument, whether or not endorsed, isdeposited 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 applies, ifa person paying the instrument or taking itfor value or for collection fails to exercise ordinary care in paying or taking the instrument and that failuresubstantially contributes toloss resulting frompayment ofthe 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.
‹ Prev All Iowa sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.