Nominal Payee Law and Legal Definition

Nominal payee is a payee named in a negotiable instrument who is not the beneficial owner and has no beneficial interest in the instrument.

The following is an example of a case law referring to nominal payee:

A receipt, executed by the nominal payee of a note in fraud of the person for whose benefit the note was taken, is void. [Haven v. Hobbs, 1 Vt. 238 (Vt. 1828)].