FICTITIOUS-PAYEE RULE
fictitious-payee rule.Commercial law. The principle that if a drawer or maker issues
commercial paper to a payee whom the drawer or maker does not actually intend to have any
interest in the instrument, an ensuing forgery of the payee’s name will be effective to pass good
title to later transferees. — Also termed padded-payroll rule. [Cases: Banks and Banking 148,
- C.J.S. Banks and Banking §§ 416–417, 419, 421–428, 430–432, 434–438.][Blacks Law 8th]