§ 26-1-3.1-420 — Conversion of instrument

Indiana § 26-1-3.1-420

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 3.1: Negotiable Instruments

Text

(a) The law applicable to conversion of
personal property applies to instruments. An instrument is also
converted if it is taken by transfer, other than a negotiation, from a
person not entitled to enforce the instrument or a bank makes or obtains
payment with respect to the instrument for a person not entitled to
enforce the instrument or receive payment. An action for conversion of
an instrument may not be brought by:
(1) the issuer or acceptor of the instrument; or
(2) a payee or endorsee who did not receive delivery of the
instrument either directly or through delivery to an agent or a
co-payee.
(b) Notwithstanding IC 34-24-3-1 or any other statute providing a
measure of damages for conversion, in an action under subsection (a)
for conversion of an instrument, the measure of liability is presumed to
be the amount payable on the instrument, but recovery may not exceed
the amount of the plaintiff's interest in the instrument.
(c) A representative, other than a depositary bank, who has in good
faith dealt with an instrument or its proceeds on behalf of one who was
not the person entitled to enforce the instrument is not liable in
conversion to that person beyond the amount of any proceeds that it has
not paid out.

Legislative History

As added by P.L.222-1993, SEC.5. Amended by P.L.1-1998, SEC.135.