Also known as: payees
Written by attorneys — see sources below.
A person identified as the recipient of payment on a negotiable instrument. The identity of the initial payee is fixed by the intent of the person signing on behalf of the issuer even when the name written on the instrument differs from the intended recipient.
Priscilla Parks signs a check drawn on her account and writes the name of her supplier as payee. She actually intends the funds for her accountant Pedro Pacheco. When the bank pays Pacheco the instrument is treated as payable to him because his identity matches the signer's intent.
Philip Powell receives a check made payable to him but never takes delivery. The bank later pays the proceeds to an unauthorized presenter. Powell cannot sue the bank for conversion because he never received the instrument and therefore never became a holder entitled to enforce it.
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 instrument is payable to the person the signer intended even if the written name or identification does not match that person. This rule fixes the initial payee by reference to the issuer's intent at the time of signing.
Supporting sources
No. A payee or indorsee who did not receive delivery of the instrument either directly or through an agent lacks standing to bring a conversion claim against the bank that paid an unauthorized presenter.
Supporting sources
Yes when the policy language directs payment directly to the named employee or beneficiary without employer intermediation. The repeated identification of the employee as the direct recipient manifests intent to confer enforceable rights on the payee.
Supporting sources
…no fee either to Continental or to Swiss Bank for the aborted transfer. A second type of loss, which either the payor or the payee may suffer, is a dislocation in one’s business triggered by the failure to pay. Swiss Bank’s failure to transfer funds to the Banque de Paris when requested to do so by Continental Bank set…