Legal Question in Business Law in California

Re: Check Endorsement for Power of Attorney

Section 3204(d) of the Commercial Code says if an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.

I interpret this to mean that a bank may require endorsement somewhat as follows: "John A. Doe, payee, by Richard B. Roe, his attorney-in-fact"

Further, Probate Code section 4300 says "A third person [i.e., a bank] shall accord an attorney-in-fact acting pursuant to the provisions of a power of attorney the same rights and privileges that would be accorded the principal if the principal were personally present and seeking to act."

Probate Code section 4302 provides the bank with some protection by stating "When requested to engage in transactions with an attorney-in-fact, a third person, before incurring any duty to comply with the power of attorney, may require the attorney-in-fact to provide identification, specimens of the signatures of the principal and the attorney-in-fact, and any other information reasonably necessary or appropriate to identify the principal and the attorney-in-fact and to facilitate the actions of the third party in transacting business with the attorney-in-fact. A third person may require an attorney-in-fact to provide the current and permanent residence address of the principal before agreeing to engage in a transaction with the attorney-in-fact.

There are additional provisions in the Probate Code relating to attorneys-in-fact transacting business. Some of them protect the a-i-f, others are for the benefit of the third party. If you are an a-i-f you should read the Probate Code, sections 4000-4545. The Codes are available at the county law library and most general public libraries. You can skim the section titles and then study the ones that may affect your duties.