Papex International Brokers Ltd., A/K/A Les Courtiers Papex International Ltd. v. Chase Manhattan Bank, N.A.

WISDOM, Senior Circuit Judge:

This appeal presents the question whether, under Puerto Rican Law, a payee can sue the collecting bank that accepts and pays checks on the payee’s forged indorsement even though the drawer never delivered the checks to the payee. The district court dismissed the suit, holding that Puerto Rico’s version of the Negotiable Instruments Law does not provide the payee with a direct action against the collecting bank. We affirm, but on the alternate ground that the payee has no standing to sue on the checks because the payee never became a “holder” of those checks.

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