§ 26-1-4-201 — Status of collecting banks as agent and provisional status of credits; applicability of chapter; item endorsed "pay any bank"

Indiana § 26-1-4-201

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4: Bank Deposits and Collections

Text

(a) Unless a contrary intent clearly appears
and before the time that a settlement given by a collecting bank for an
item is or becomes final, the bank, with respect to the item, is an agent
or subagent of the owner of the item, and any settlement given for the
item is provisional. This provision applies regardless of the form of
endorsement or lack of endorsement and even though credit given for
the item is subject to immediate withdrawal as of right or is in fact
withdrawn, but the continuance of ownership of an item by its owner
and any rights of the owner to proceeds of the item are subject to rights
of a collecting bank, such as those resulting from outstanding advances
on the item and rights of recoupment or setoff. If an item is handled by
banks for purposes of presentment, payment, collection, or return, the
relevant provisions of IC 26-1-4 apply, even though action of the
parties clearly establishes that a particular bank has purchased the item
and is the owner of it.
(b) After an item has been endorsed with the words "pay any bank"
or the like, only a bank may acquire the rights of a holder until the item
has been:
(1) returned to the customer initiating collection; or
(2) specially endorsed by a bank to a person who is not a bank.
Formerly: Acts 1963, c.317, s.4-201. As amended by
P.L.152-1986, SEC.213; P.L.222-1993, SEC.17.