168

LAWS OF MARYLAND

[Ch. 49

signer in favor of any person who in good faith pays the
instrument or takes it for value.

(2) Any unauthorized signature may be ratified for
all purposes of this [subtitle] TITLE. Such
ratification does not of itself affect any rights of the
person ratifying against the actual signer.

3—405. Impostors; signature in name of payee.

(1)   An indorsement by any person in the name of a
named payee is effective if

(a)    An impostor by use of the mails or
otherwise has induced the maker or drawer to issue the
instrument to him or his confederate in the name of the
payee; or

(b)   A person signing as or on behalf of a
maker or drawer intends the payee to have no interest in
the instrument; or

(c)   An agent or employee of the maker or
drawer has supplied him with the name of the payee
intending the latter to have no such interest.

(2)    Nothing in this section shall affect the
criminal or civil liability of the person so indorsing.

3—406. Negligence contributing to alteration or
unauthorized signature.

Any person who by his negligence substantially
contributes to a material alteration of the instrument or
to the making of an unauthorized signature is precluded
from asserting the alteration or lack of authority
against a holder in due course or against a drawee or
other payor who pays the instrument in good faith and in
accordance with the reasonable commercial standards of
the drawee's or payor's business.

3-407. Alteration.

(1) Any alteration of an instrument is material
which changes the contract of any party thereto in any
respect, including any such change in

(a)   The number or relations of the parties;
or

(b)    An incomplete instrument, by completing
it otherwise than as authorized; or

(c)   The writing as signed, by adding to it or