New Jersey § 12a:3-404

§ 12a:3-404.

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 a person whose intent determines to whom an instrument is payable (subsection

a. or b. of 12A:3-110) does not intend the person identified as payee to have any

interest in the instrument, or 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 it is made in a name substantially similar to that of the payee or 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 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 the

failure to exercise ordinary care contributed to the loss.