Indiana Code 26-1-3.1-404. Impostors; fictitious payees
(b) If (i) a person whose intent determines to whom an instrument is payable (IC 26-1-3.1-110(a) or (b)) 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:
(1) it is made in a name substantially similar to that of the payee; or
(2) 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 person bearing the loss proves that the failure to exercise ordinary care substantially contributed to the loss.
As added by P.L.222-1993, SEC.5. Amended by P.L.248-1995, SEC.1.