Colorado Revised Statutes

Colo. Rev. Stat. § 4-3-404 (2026)

Impostors; fictitious payees

✓ current as of July 2026

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(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 (section 4- 3-110 (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 indorsement:

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

(2) An indorsement by any person in the name of the payee stated in the instrument 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.

(c) Under subsection (a) or (b) of this section, an indorsement is made in the name of a payee if (i) it is made in a name substantially similar to that of the payee or (ii) the instrument, whether or not indorsed, 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) of this section 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 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 failure to exercise ordinary care contributed to the loss.

Source: L. 94: Entire article R&RE, p. 863, § 1, effective January 1, 1995.

Editor's note: This section is similar to former § 4-3-405 as it existed prior to 1994.

Notes of Decisions

Cited in 4 cases, 1984–1994 · leading case: Willey v. Mayer, 876 P.2d 1260 (Colo. 1994).

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Willey v. Mayer, 876 P.2d 1260 (Colo. 1994). · cites it 28× “The trial court ruled that Mayer had not authorized Rhodes to sign Mayer's name to the note but that Mayer was precluded under sections 4-3-404, -406, 2 C.R.S. (1992), [4] from *1268 raising that defense.”

Willey v. Mayer, 862 P.2d 959 (Colo. Ct. App. 1993). · cites it 13× “However, the court also found, generally, that, even though Mayer had not revoked the power of attorney, he had not authorized Rhodes to sign his name pursuant to § 4-3-404, C.R.S. (1992 Repl.Vol. 2), because he had not ratified the signature.”

Cent., Inc. v. Cache Nat'l Bank, 748 P.2d 351 (Colo. Ct. App. 1987). · cites it 2× “See § 4-3-404, C.R.S. Upon such collection, however, the collecting bank held the funds for the payee’s benefit.”

Bill Manning, Inc. v. Denver West Bank & Trust, 697 P.2d 403 (Colo. Ct. App. 1984). · cites it 3× “The trial court apparently applied the U.C.C. standard and found against the bank on disputed evidence.”

— Colo. Rev. Stat. § 4-3-404(1) — 2 cases

Willey v. Mayer, 876 P.2d 1260 (Colo. 1994). “The trial court ruled that Mayer had not authorized Rhodes to sign Mayer's name to the note but that Mayer was precluded under sections 4-3-404, -406, 2 C.R.S. (1992), [4] from *1268 raising that defense.”

Willey v. Mayer, 862 P.2d 959 (Colo. Ct. App. 1993). “However, the court also found, generally, that, even though Mayer had not revoked the power of attorney, he had not authorized Rhodes to sign his name pursuant to § 4-3-404, C.R.S. (1992 Repl.Vol. 2), because he had not ratified the signature.”

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