Colorado § 4-3-402 - Signature by representative.

§ 4-3-402. Signature by representative.

(a) 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 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.

(b) 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:

(1) 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.

(2) Subject to subsection (c) of this section, if (i) the form of the signature does not show unambiguously that the signature is made in a representative capacity or (ii) 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.

(c) 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.

Source: L. 94: Entire article R&RE, p. 862, § 1, effective January 1, 1995.

Editor's note: This section is similar to former § 4-3-103 as it existed prior to 1994.

Cross references: For unauthorized signatures, see § 4-3-403.

ANNOTATION

Law reviews. For article, "Augmenting the Anomalousness of the Anomalous Indorser", see 16 Dicta 254 (1939).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

The words "we promise to pay" on a note together with the signature of both a corporation and the corporation president do not impart personal liability to the corporate officer where it is clear that the signatures are intended to bind only the corporation. MacKay v. Lay, 28 Colo. App. 70, 470 P.2d 614 (1970). See New England Elec. Co. v. Shook, 27 Colo. App. 30, 145 P. 1002 (1915).

If an agent exceeds his authority, his principal may complain but a third person may not. MacKay v. Lay, 28 Colo. App. 70, 470 P.2d 614 (1970).

Indorsee may assume action of corporate officer is authorized. An indorsee before maturity and for value of a note subscribed with the name of a corporation by its principal officer who is without notice of any want of authority in such officer may assume that his action is authorized. Gold Glen Mines & Tunnel Co. v. Dennis, 21 Colo. App. 284, 121 P. 677 (1912).

If the agency of the party is made to appear, the principal will not be bound beyond the authority given. McClellan v. Morris, 71 Colo. 304, 206 P. 575 (1922).

Where corporate note is given for noncorporate debt. A promissory note of a corporation given under authority of the directors in acknowledgment of what is not a debt of the corporation and by which some of the directors become creditors of the corporation is invalid as to a payee with knowledge. Gold Glen Mining Co. v. Stimson, 44 Colo. 406, 98 P. 727 (1908).

Liability of party signing note as individual, without qualifying designation. Where parties sign a note as individuals, without any qualifying designations, they are individually liable as makers, and not as accommodation parties. Rink-A-Dinks v. TNT Motorcycles, Inc., 655 P.2d 431 (Colo. App. 1982).

Parol evidence may be admitted as between the original parties to show that one signed a note in a representative capacity. Bieser v. Irwin, 101 Colo. 210, 72 P.2d 271 (1937).

An otherwise authorized signature on a negotiable instrument is not converted into an unauthorized forgery when an agent, authorized to sign the principal's name, abuses that authority by negotiating the instrument to a holder in due course for the agent's own personal benefit. Willey v. Mayer, 876 P.2d 1260 (Colo. 1994).

Applied in Abrams v. Colo. Seal and Stripe, Inc., 702 P.2d 765 (Colo. App. 1985); La Junta State Bank v. Travis, 727 P.2d 48 (Colo. 1986); Kunz v. Cycles West, Inc., 969 P.2d 781 (Colo. App. 1998); Genesis Capital Ventures, LLC v. Restore with Apex, Inc., 282 F. Supp. 3d 1225 (D. Colo. 2017).