Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Chemical Bank

Chief Judge Cooke,

(concurring). To permit a drawee bank to avoid liability for paying a check on a forged indorsement by asserting the “fictitious payee” rule, when the bank itself may have acted negligently in paying the check, is a harsh result. Inasmuch as section 3-405 of the Uniform Commercial Code does not include any requirement that a bank act with ordinary care, however, I am constrained to concur in the majority’s result.

As a general rule, a forged indorsement is wholly inoperative and ineffective to negotiate an instrument (see Uni-, form Commercial Code, § 3-404, subd [11).…