Also known as: drawees · payor bank · acceptor
Written by attorneys — see sources below.
A person or entity ordered in a draft to make payment. The designation identifies the party responsible for honoring the instrument upon proper presentment.
Derek Douglas issues a check to Diamond Manufacturing for equipment purchased on credit. The instrument lists Derek's bank as the party required to pay the stated amount upon presentment. When Diamond presents the check, the bank must decide whether to honor the order and debit Derek's account.
Toyson Burruss draws a check payable to the order of a holder. The holder presents the check directly at a branch of Bank of America, the bank named on the face of the instrument. Bank of America examines the account and decides whether to pay cash or return the item unpaid.
In August 2000, petitioner Messing came into possession of a check in the amount of $976 drawn by Toyson J. Burruss on an account at Bank of America. On August 3, 2000, Messing presented the check for payment over the counter at a Bank of America branch in Baltimore City rather than depositing it at his own bank. The teller confirmed sufficient funds in the drawer's account, stamped the check with transaction data, and obtained Messing's endorsement along with information from his driver's license and a major credit card. When the teller learned that Messing was not a Bank of America customer, she requested that he place an inkless thumbprint on the check as required by the bank's Thumbprint Signature Program for non-customers. Messing refused the request. The branch manager likewise declined to cash the check without the thumbprint, and Messing departed the bank still holding the check. The teller then released the hold on the drawer's funds and voided the transaction. Two months later, on October 10, 2000, Messing filed a declaratory judgment action against Bank of America in the Circuit Court for Baltimore City. He sought declarations that he had provided reasonable identification, that the thumbprint requirement was unlawful and violated privacy, that the bank had accepted and wrongfully dishonored the check, and that it had converted the proceeds, along with injunctive relief to end the thumbprint program. The bank moved for summary judgment, which the circuit court granted, dismissing the complaint with prejudice. Messing appealed. The Court of Special Appeals affirmed the judgment in favor of the bank but remanded for entry of a proper declaratory judgment. Messing then petitioned for a writ of certiorari, which this Court granted on June 10, 2002.
View caseThe UCC defines the drawee as the person ordered in a draft to make payment. This designation fixes the party that must decide whether to honor the instrument when it is presented.
Supporting sources
If a draft names a nonbank drawee and it is unclear whether a bank named in the draft is a co-drawee or a collecting bank, the bank is treated as a collecting bank. This rule prevents confusion about collection responsibilities.
Supporting sources
A drawee bank that pays a check bearing a forged endorsement may face conversion claims from the true owner. The bank must verify endorsements before charging the drawer's account.
Supporting sources