Printable Format84-3-110. Identification of person to whom instrument is payable. (a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or in the name or on behalf of, the issuer of the instrument. The instrument is payable to the person intended by the signer even if that person is identified in the instrument by a name or other identification that is not that of the intended person. If more than one person signs in the name or behalf of the issuer of an instrument and all the signers do not intend the same person as payee, the instrument is payable to any person intended by one or more of the signers.
(b) If the signature of the issuer of an instrument is made by automated means, such as a check-writing machine, the payee of the instrument is determined by the intent of the person who supplied the name or identification of the payee, whether or not authorized to do so.
(c) A person to whom an instrument is payable may be identified in any way, including by name, identifying number, office or account number. For the purpose of determining the holder of an instrument, the following rules apply:
(1) If an instrument is payable to an account and the account is identified only by number, the instrument is payable to the person to whom the account is payable. If an instrument is payable to an account identified by number and by the name of a person, the instrument is payable to the named person, whether or not that person is the owner of the account identified by number.
(2) If an instrument is payable to:
(i) A trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named;
(ii) a person described as agent or similar representative of a named or identified person, the instrument is payable to the represented person, the representative, or a successor of the representative;
(iii) a fund or organization that is not a legal entity, the instrument is payable to a representative of the members of the fund or organization; or
(iv) an office or to a person described as holding an office, the instrument is payable to the named person, the incumbent of the office, or a successor to the incumbent.
(d) If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, pledged, discharged or enforced by any or all of them in possession of the instrument. If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, pledged, discharged or enforced only by all of them. If an instrument payable to two or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively. For the purposes of this subsection, the term "instrument" includes a writing that would otherwise qualify as a certificate of deposit but for the fact that the writing contains a limitation on transfer.
History: L. 1991, ch. 296, § 10; L. 1992, ch. 259, § 2; July 1.
KANSAS COMMENT, 1996
Except for the last sentence, this section is identical to the 1995 Official Text. Much of it is new, with parts derived from the prior versions of 84-3-110 and 84-3-117.
Subsections (a) and (b) are meant to compliment the maker's or drawer's intent. They provide that the person intended is the person who can become the holder and indorse the instrument, even if misnamed or named in an unusual fashion. Third persons may refuse to take the instrument, or may require two signatures, that in the name on the instrument and the more normal signature of the payee. These provisions are consistent with the impostor, fictitious payee, and fraudulent employee provisions of 84-3-404 and 84-3-405.
Subsection (c) provides that the successor of an office holder, or the representative of an informal group, can deal with the instrument. Instruments payable alternatively, "pay A or B," can be indorsed or enforced by any of them in possession. Instruments payable jointly ("not alternatively") can only be enforced by all. In Scharz v. Twin City State Bank, 201 K. 539, 441 P.2d 897 (1968), a bank was allowed to indorse and to exercise setoff against the proceeds of a cashier's check made payable to the bank and an insurance company and held by the bank as security for a debt of the insurance company to the bank. The court concluded that, even though a check made payable to "A and B" normally requires the indorsement of both A and B, the bank in this case had implied authority to apply the check to the insurance company's debt in order to effectuate the pledge arrangement. Implied authority to indorse on behalf of another payee was also found in Meador v. Ranchmart State Bank, 213 K. 372, 517 P.2d 123 (1973).
The nonuniform last sentence applies this same rule to certificates of deposit which have been made inalienable, and to which the provisions of Article 3 would not otherwise apply. Therefore, any certificate of deposit "payable" language is controlled by 84-3-110.
Revisor's Note:
Former section 84-3-110 was repealed by L. 1991, ch. 296, § 111 and the number reassigned to the current text.