The president of the appellant company drew a cheque payable to a real creditor but fraudulently endorsed it and cashed it himself, never intending the payee to receive the funds.
The appellant sued the respondent bank for cashing the forged cheque.
The Supreme Court of Canada held that because the drawer inserted the payee's name by way of pretence without intending payment to her, the payee was a 'fictitious person' under s. 21(5) of the Bills of Exchange Act.
Consequently, the bank was entitled to treat the cheque as payable to bearer and charge it to the appellant's account.
The appeal was dismissed.
