FICTITIOUS PAYEE. When a contract, such as negotiable paper, is drawn in favor of a fictitious person, and has been indorsed in such name, it is deemed payable to bearer as against all parties who are privy to the transaction ; and a holder in good faith may recover on it against them; Pars. Bills & N. 591, n.; 2 H. Bla. 178, 288; 19 Ves. 311; Tit tle v. Thomas, 30 Miss. 122, 64 Am. Dec. 154; Hunter v. Blodget, 2 Yeates (Pa.) 480.
The maker of such a note, by negotiating it, transfers title to it without Indorsement, and it is presumed that the note came into the possession of the holder with the names of all the indorsers on it, and prima facie he is treated as a holder for value; Plets v. Johnson, 3 Hill (N. Y.) 112; provided that the acceptor or indorser be ignorant of the fact that the payee is fictitious; Forbes v. Espy, 21 Ohio St. 483 ; 1 Camp. 130; and entitle the holder of such a note to a recov ery it must appear affirmatively that he was ignorant of-the fact that the payee was a fictitious person; Maniort v. Roberts, 4 E. D. Sm. (N. Y.) 83. As between the original par ties who put it into circulation with a knowl edge of the fiction, it might be held void as an inoperative instrument, but If money from the holder actually gets into the hands of the acceptor it may be recovered back as money had and received; 1 Camp. 130. See also Sto. Prom. Notes 39. In the hands of a bona fide holder the note or bill is good against the maker ; Irving National Bank v. Alley, 79 N. Y. 536 ; Lane v. Krekle, 22 Ia. 404; Farns worth v. Drake, 11 Ind. 103 ; Blodgett v. Jackson, 40 N. H. 21.
A bona fide holder for a valuable con sideration of a bill drawn payable to a fictitious person and indorsed in that name by the drawer may recover the amount of it in an action against the acceptor for money paid or money had and received, upon the idea that there was an appropria tion of so much money to be paid to the person who should become the holder of the bill ; 3 Term 174; and the mere fact of the acceptance of such a bill is evidence that the value has been received for it ; id. 182; in this case three judges thought that the bill was to be considered as payable to bearer, and in the leading case of Minet v. Gibson that view was taken and it was held that a recovery from the acceptor may be had upon a count upon a bill payable to bearer, where such acceptor is aware that the payee • is a fictitious person; 3 Term 481. This judgment was affirmed by the House of Lords, though with a dissent by Eyre, G. B., and Heath, J., with whom Lord Thurlow concurred; 1 H. Bla. 569; s. c. 6 Bro. P. C. 235. The case has been termed "anomal ous" by a text writer who quotes the dissent ing opinion of Eyre, C. B„ as one "whose rea soning, • it is conceived, has never been re futed ;" 2 Ames, Bills & Notes 864. But the same writer admits that "the doctrine of the case has been generally adopted." In an
action on such a bill, to show that the ac ceptor is aware that Ahe payee is a fictitious person, evidence is admissible to show the circumstances under which he had received other bills payable to fictitious persons; 2 H. Bla. 187, 288. See also 18 C. B. N. S. 694 ; L. R. 1 C. P. 463.
When a note is made payable to the name of some person not having any interest, and not intended to become a party to the trans action, whether a person of such a name is or is not known to exist, the payee may be deemed fictitious ; Foster v. Shattuck, 2 N. H. 446 ; [1891] A. C. 107; [1908] 1 K. B. 13 ; Jordan Marsh Co. v. Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250; Phillips v. Bank, 140 N. Y. 556, 35 N. E. 982, 23 L. R. A. 584, 37 Am. St. Rep. 596 ; Snyder v. Bank, 221 Pa. 599, 70 Atl. 876, 128 Am. St. Rep. 780.
If the maker did not know that the payee was a fictitious or non-existent person, and did not intend to make the paper payable to such person, the instrument cannot be treat ed as payable to bearer, for the intention of the maker or drawer is the test; Shipman v. Bank, 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821; Armstrong v. Bank, 46 Ohio St 512, 22 N. E. 866, 6 L. R. A. 625, 16 Am. St. Rep. 635; Jordan Marsh Co. v. Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250. In Kohn v. Watkins, 26 Kan. 691, 40 Am. Rep. 336, it was held that the drawer's benef that the person named was the real payee will prevent the application of the rule that an order to a fictitious payee is an order to bearer. If a check is drawn to an existing person intend ed by the drawer to be the payee, the latter is not "fictitious" within the Bills of Ex change act, no matter how much the drawer may have been deceived ; [1906] 2 K. B. 718, affirmed [1908] 1 K. B. 13, where it is said : "The word 'fictitious' implies that the name has been inserted by the person who has put it in for some dishonest purpose, without any intention that the check should be paid to that person only." The Uniform Negotiable Instruments act provides that where the drawee is a fictitious Person, the holder of the instrument may treat it either as a bill or note.
A note payable to a company or firm hav ing no existence legal or de facto, has been held to be such a note; Farnsworth v. Drake, 11 Ind. 101; Blodgett v. Jackson, 40 N. H. 21; Maniort .v. Roberts, 4 E. D. Smith (N. Y.) 83; Stevens v. Strang, 2 Sandf. (N. Y.) 138; one made payable to the estate of a.
•deceased person ; Scott v. Parker, 5 N. Y. Supp. 753; checks drawn to the order of an existing person, whose indorsement is forged; Jordan Marsh Co. v. Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250. See Douglass v. Wilkeson, 6 Wend. (N. Y.) 637; Bytes, Bills, Wood's ed. 383.