Recent Important Decisions
Bills and Notes – “Fictitious Payee” – Payee a Person Not Intended to Have Any Interest – A member of a firm, authorized to sign the firm’s name, made checks payable to an existing association, which he did not intend should ever gain possession of or have any interest in such checks, merely for the purpose of obtaining money for himself, which he did by unlawfully indorsing the association’s name to the checks. The plaintiff firm now seek to recover the amount of the checks, charged to their account by the defendant bank, and the defense is that the payee was a “fictitious payee” under the NEGOTIABIu INSTRUMENTS STATUTE, Sec. 9 (3), and hence the checks were payable to bearer. The statute provides, “The instrument is payable to bearer * * * when it is payable to the order of a fictitious or non-existing person and such fact was known to the person making it so payable.” Held, that the defendant bank was not liable, since the checks were made payable to the name of a person not having any interest in, and not intended to become a party to, the transaction, wherefore the payee is a fictitious person under the statute and the checks were payable to bearer. Mueller & Martin v. Liberty Ins. Bank (Ky., I92O), 218 S. W. 465.