Chapter 403

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.

403.404 History History: 1995 a. 449.

403.405 403.405 Employer’s responsibility for fraudulent endorsement by employee.

403.405(1) (1) In this section:

403.405(1)(a) (a) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer.

403.405(1)(b) (b) “Fraudulent endorsement” means, in the case of an instrument payable to the employer, a forged endorsement purporting to be that of the employer or, in the case of an instrument with respect to which the employer is the issuer, a forged endorsement purporting to be that of the person identified as payee.

403.405(1)(c) (c)

403.405(1)(c)1. 1. “Responsibility” with respect to instruments means authority to do any of the following:

403.405(1)(c)1.a. a. Sign or endorse instruments on behalf of the employer.

403.405(1)(c)1.b. b. Process instruments received by the employer for bookkeeping purposes, for deposit to an account or for other disposition.

403.405(1)(c)1.c. c. Prepare or process instruments for issue in the name of the employer.

403.405(1)(c)1.d. d. Supply information determining the names or addresses of payees of instruments to be issued in the name of the employer.

403.405(1)(c)1.e. e. Control the disposition of instruments to be issued in the name of the employer.

403.405(1)(c)1.f. f. Act otherwise in a responsible capacity with respect to instruments.

403.405(1)(c)2. 2. “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.

403.405(2) (2) 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 endorsement of the instrument, the endorsement is effective as the endorsement 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 that the failure to exercise ordinary care contributed to the loss.

403.405(3) (3) Under sub. (2), an endorsement is made in the name of the person to whom an instrument is payable if the endorsement is made in a name substantially similar to the name of that person or if the instrument, whether or not endorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person.

403.405 History History: 1995 a. 449.

403.406 403.406 Negligence contributing to forged signature or alteration of instrument.

403.406(1) (1) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.

403.406(2) (2) Under sub. (1), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.

403.406(3) (3) Under sub. (1), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under sub. (2), the burden of proving failure to exercise ordinary care is on the person precluded.

403.406 History History: 1995 a. 449.

403.406 Annotation Although a claim for misrepresentation may “supplement” the provisions of the UCC, it may not supplant them. A bank customer’s failure to comply with ss. 403.406 and 404.406 precluded the customer’s claim for strict-liability misrepresentation. Weber, Leicht, Gohr & Associates v. Liberty Bank, 2000 WI App 249, 239 Wis. 2d 461, 620 N.W.2d 472, 99-1557.

403.407 403.407 Alteration.

403.407(1) (1) “Alteration” means an unauthorized change in an instrument that purports to modify in any respect the obligation of a party or an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.

403.407(2) (2) Except as provided in sub. (3), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.

403.407(3) (3) A payer bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument according to its original terms, or, in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.

403.407 History History: 1995 a. 449.

403.408 403.408 Drawee not liable on unaccepted draft. A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.

403.408 History History: 1995 a. 449.

403.409 403.409 Acceptance of draft; certified check.

403.409(1) (1) “Acceptance” means the drawee’s signed agreement to pay a draft as presented. The acceptance shall be written on the draft and may consist of the drawee’s signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.

403.409(2) (2) A draft may be accepted although it has not been signed by the drawer, is otherwise incomplete, is overdue or has been dishonored.

403.409(3) (3) If a draft is payable at a fixed period after sight and the acceptor fails to date the acceptance, the holder may complete the acceptance by supplying a date in good faith.

403.409(4) (4) “Certified check” means a check accepted by the bank on which it is drawn. Acceptance may be made as stated in sub. (1) or by a writing on the check which indicates that the check is certified. The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check.

403.409 History History: 1995 a. 449.

403.410 403.410 Acceptance varying draft.

403.410(1) (1) If the terms of a drawee’s acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance.

403.410(2) (2) The terms of a draft are not varied by an acceptance to pay at a particular bank or place in the United States, unless the acceptance states that the draft is to be paid only at that bank or place.

403.410(3) (3) If the holder assents to an acceptance varying the terms of a draft, the obligation of each drawer and endorser that does not expressly assent to the acceptance is discharged.

403.410 History History: 1995 a. 449.

403.411 403.411 Refusal to pay cashier’s checks, teller’s checks and certified checks.

403.411(1) (1) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier’s check or teller’s check bought from the issuer.

403.411(2) (2) If the obligated bank wrongfully refuses to pay a cashier’s check or certified check, wrongfully stops payment of a teller’s check or wrongfully refuses to pay a dishonored teller’s check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.