§ 41-03-57 — (3-420) Conversion of instrument

1. The law applicable to conversion of personal property applies to instruments. An
instrument is also converted if it is purchased 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 the issuer or acceptor of the

instrument or by a payee or endorsee who did not receive delivery of the instrument
either directly or through delivery to an agent or a copayee.
2. In an action under subsection 1, 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.
3. A representative, other than a depositary bank, that 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.