Chapter 403

403.307(1)(b) (b) “Represented person” means the principal, beneficiary, partnership, corporation or other person to whom the duty stated in par. (a) is owed.

403.307(2) (2) If an instrument is taken from a fiduciary for payment or collection or for value, the taker has knowledge of the fiduciary status of the fiduciary and the represented person makes a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is a breach of fiduciary duty, the following rules apply:

403.307(2)(a) (a) Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the represented person.

403.307(2)(b) (b) In the case of an instrument payable to the represented person or the fiduciary as such, the taker has notice of the breach of fiduciary duty if the instrument is taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary or is taken in a transaction known by the taker to be for the personal benefit of the fiduciary.

403.307(2)(c) (c) If an instrument is issued by the represented person or the fiduciary as such, and made payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty.

403.307(2)(d) (d) If an instrument is issued by the represented person or the fiduciary as such to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary or is taken in a transaction known by the taker to be for the personal benefit of the fiduciary.

403.307 History History: 1995 a. 449.

403.308 403.308 Proof of signatures and status as holder in due course.

403.308(1) (1) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or adjudicated incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under s. 403.402 (1).

403.308(2) (2) If the validity of signatures is admitted or proved and there is compliance with sub. (1), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under s. 403.301, unless the defendant proves a defense or claim in recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is subject to the defense or claim, except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course which are not subject to the defense or claim.

403.308 History History: 1995 a. 449; 2005 a. 387.

403.309 403.309 Enforcement of lost, destroyed or stolen instrument.

403.309(1) (1) A person not in possession of an instrument is entitled to enforce the instrument if all of the following apply:

403.309(1)(a) (a) The person was in possession of the instrument and entitled to enforce it when loss of possession occurred.

403.309(1)(b) (b) The loss of possession was not the result of a transfer by the person or a lawful seizure.

403.309(1)(c) (c) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

403.309(2) (2) A person seeking enforcement of an instrument under sub. (1) shall prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, s. 403.308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

403.309 History History: 1995 a. 449.

403.310 403.310 Effect of instrument on obligation for which taken.

403.310(1) (1) Unless otherwise agreed, if a certified check, cashier’s check or teller’s check is taken for an obligation, the obligation is discharged to the same extent that discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an endorser of the instrument.

403.310(2) (2) Unless otherwise agreed and except as provided in sub. (1), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent that the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply:

403.310(2)(a) (a) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.

403.310(2)(b) (b) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment.

403.310(2)(c) (c) Except as provided in par. (d), if the check or note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. In the case of an instrument of a 3rd person which is negotiated to the obligee by the obligor, discharge of the obligor on the instrument also discharges the obligation.

403.310(2)(d) (d) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent that the obligation is suspended. If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent the obligee’s rights against the obligor are limited to enforcement of the instrument.

403.310(3) (3) If an instrument other than one described in sub. (1) or (2) is taken for an obligation, the effect is one of the following:

403.310(3)(a) (a) That stated in sub. (1) if the instrument is one on which a bank is liable as maker or acceptor.

403.310(3)(b) (b) That stated in sub. (2) in any other case.

403.310 History History: 1995 a. 449.

403.311 403.311 Accord and satisfaction by use of instrument.

403.311(1) (1) Subsections (2) to (4) apply if a person against whom a claim is asserted proves that all of the following conditions have been met:

403.311(1)(a) (a) That person in good faith tendered an instrument to the claimant as full satisfaction of the claim.

403.311(1)(b) (b) The amount of the claim was unliquidated or subject to a bona fide dispute.

403.311(1)(c) (c) The claimant obtained payment of the instrument.

403.311(2) (2) Unless sub. (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

403.311(3) (3) Subject to sub. (4), a claim is not discharged under sub. (2) if any of the following applies:

403.311(3)(a) (a) The claimant, if an organization, proves that all of the following conditions have been met:

403.311(3)(a)1. 1. Within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office or place.

403.311(3)(a)2. 2. The instrument or accompanying communication was not received by that designated person, office or place.

403.311(3)(b) (b) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with par. (a) 1.

403.311(4) (4) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

403.311 History History: 1995 a. 449.

403.312 403.312 Lost, destroyed or stolen cashier’s check, teller’s check or certified check.

403.312(1) (1) In this section:

403.312(1)(a) (a) “Check” means a cashier’s check, teller’s check or certified check.

403.312(1)(b) (b) “Claimant” means a person who claims the right to receive the amount of a check that was lost, destroyed or stolen.

403.312(1)(c) (c) “Declaration of loss” means a written statement, made under penalty of perjury, to the effect that the declarer lost possession of a check, that the declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check, in the case of a cashier’s check or teller’s check, that the loss of possession was not the result of a transfer by the declarer or a lawful seizure, and that the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined or it is in the wrongful possession of an unknown person or of a person that cannot be found or is not amenable to service of process.

403.312(1)(d) (d) “Obligated bank” means the issuer of a cashier’s check or teller’s check or the acceptor of a certified check.

403.312(2) (2) 

403.312(2)(a) (a) A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check if all of the following apply:

403.312(2)(a)1. 1. The claimant is the drawer or payee of a certified check or the remitter or payee of a cashier’s check or teller’s check.

403.312(2)(a)2. 2. The communication contains or is accompanied by a declaration of loss of the claimant with respect to the check.

403.312(2)(a)3. 3. The communication is received at a time and in a manner affording the obligated bank a reasonable time to act on it before the check is paid.

403.312(2)(a)4. 4. The claimant provides reasonable identification if requested by the obligated bank.

403.312(2)(b) (b) Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration of loss.

403.312(2)(c) (c) If a claim is asserted in compliance with this subsection, the following rules apply:

403.312(2)(c)1. 1. The claim becomes enforceable at the later of the time that the claim is asserted, or the 30th day following the date of the check, in the case of a cashier’s check or teller’s check, or the 30th day following the date of the acceptance, in the case of a certified check.

403.312(2)(c)2. 2. Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a teller’s check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability of the obligated bank with respect to the check.

403.312(2)(c)3. 3. If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the check.

403.312(2)(c)4. 4. When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to s. 404.302 (1) (a), payment to the claimant discharges all liability of the obligated bank with respect to the check.

403.312(3) (3) If the obligated bank pays the amount of a check to a claimant under sub. (2) (c) 4. and the check is presented for payment by a person having rights of a holder in due course, the claimant is obliged to refund the payment to the obligated bank if the check is paid or pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.

403.312(4) (4) If a claimant has the right to assert a claim under sub. (2) and is also a person entitled to enforce a check which is lost, destroyed or stolen, the claimant may assert rights with respect to the check either under this section or s. 403.309.

403.312 History History: 1995 a. 449; 2019 a. 65.

subch. IV of ch. 403 SUBCHAPTER IV

LIABILITY OF PARTIES

403.401 403.401 Signature.

403.401(1) (1) A person is not liable on an instrument unless the person signed the instrument, or the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under s. 403.402.

403.401(2) (2) A signature may be made manually or by means of a device or machine and may be made by the use of any name, including a trade or assumed name, or by a word, mark or symbol executed or adopted by a person with present intention to authenticate a writing.

403.401 History History: 1995 a. 449.

403.402 403.402 Signature by representative.

403.402(1) (1) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent that the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the authorized signature of the represented person and the represented person is liable on the instrument, whether or not identified in the instrument.

403.402(2) (2) If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:

403.402(2)(a) (a) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.

403.402(2)(b) (b) Subject to sub. (3), if the form of the signature does not show unambiguously that the signature is made in a representative capacity or the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.

403.402(3) (3) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.

403.402 History History: 1995 a. 449.

403.402 Annotation Sub. (3) does not shield a representative signer from claims of fraud in signing a corporate check. However, reliance upon a bookkeeper’s signing of a check on the instruction of a superior that the corporation was solvent was not justifiable reliance that would sustain a claim of fraud. Korhumel Steel Corp. v. Wandler, 229 Wis. 2d 395, 600 N.W.2d 592 (Ct. App. 1999), 98-2042.

403.403 403.403 Unauthorized signature.

403.403(1) (1) Unless otherwise provided in this chapter or ch. 404, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An unauthorized signature may be ratified for all purposes of this chapter.

403.403(2) (2) If the signature of more than one person is required to constitute the authorized signature of an organization, the signature of the organization is unauthorized if one of the required signatures is lacking.

403.403(3) (3) The civil or criminal liability of a person who makes an unauthorized signature is not affected by any provision of this chapter which makes the unauthorized signature effective for the purposes of this chapter.

403.403 History History: 1995 a. 449.

403.404 403.404 Impostors; fictitious payees.

403.404(1) (1) 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 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 it for value or for collection.

403.404(2) (2) If a person whose intent determines to whom an instrument is payable under s. 403.110 (1) or (2) does not intend the person identified as payee to have any interest in the instrument or if the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special endorsement:

403.404(2)(a) (a) Any person in possession of the instrument is its holder.

403.404(2)(b) (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 it for value or for collection.

403.404(3) (3) Under sub. (1) or (2), an endorsement is made in the name of a payee if it is made in a name substantially similar to that of the payee or if 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.

403.404(4) (4) With respect to an instrument to which sub. (1) or (2) 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 that the failure to exercise ordinary care contributed to the loss.