§ 34.1-3-405 — Employer's responsibility for fraudulent indorsement by employee

Wyoming § 34.1-3-405

• Jurisdiction: Wyoming
• Title 34.1: Uniform Commercial Code
• Art. 3: NEGOTIABLE INSTRUMENTS

Text

(a) In this section:
(i) "Employee" includes an independent contractor and
employee of an independent contractor retained by the employer;
(ii) "Fraudulent indorsement" means (1) in the case
of an instrument payable to the employer, a forged indorsement
purporting to be that of the employer, or (2) in the case of an
instrument with respect to which the employer is the issuer, a
forged indorsement purporting to be that of the person
identified as payee;
(iii) "Responsibility" with respect to instruments
means authority (1) to sign or indorse instruments on behalf of
the employer, (2) to process instruments received by the
employer for bookkeeping purposes, for deposit to an account, or
for other disposition, (3) to prepare or process instruments for
issue in the name of the employer, (4) to supply information
determining the names or addresses of payees of instruments to
be issued in the name of the employer, (5) to control the
disposition of instruments to be issued in the name of the
employer, or (6) to act otherwise with respect to instruments in
a responsible capacity. "Responsibility" does not include
authority that merely allows an employee to have access to
instruments or blank or incomplete instrument forms that are
being stored or transported or are part of incoming or outgoing
mail, or similar access.
(b) For the purpose of determining the rights and
liabilities of a person who, in good faith, pays an instrument
or takes it for value or for collection, if an employer
entrusted an employee with responsibility with respect to the
instrument and the employee or a person acting in concert with
the employee makes a fraudulent indorsement of the instrument,
the indorsement is effective as the indorsement of the person to
whom the instrument is payable if it is made in the name of that
person. If the 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 the fraud, 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.
(c) Under subsection (b), an indorsement is made in the
name of the person to whom an instrument is payable if (1) it is
made in a name substantially similar to the name of that person
or (2) the instrument, whether or not indorsed, is deposited in
a depositary bank to an account in a name substantially similar
to the name of that person.