N.Y. Uniform Commercial Code 4-405 – Death or Incompetence of Customer
Section 4–405. Death or Incompetence of Customer.
Terms Used In N.Y. Uniform Commercial Code 4-405
- Account: means any account with a bank and includes a
checking, time, interest or savings account;
(b) "Afternoon" means the period of a day between noon and
midnight;
(c) "Banking day" means that part of any day on which a bank is
open to the public for carrying on substantially all of its
banking functions;
(d) "Clearing house" means any association of banks or other
payors regularly clearing items;
(e) "Customer" means any person having an account with a bank or
for whom a bank has agreed to collect items and includes a
bank carrying an account with another bank;
(f) "Documentary draft" means any negotiable or non-negotiable
draft with accompanying documents, securities or other papers
to be delivered against honor of the draft;
(g) "Item" means any instrument for the payment of money even
though it is not negotiable but does not include money;
(h) "Midnight deadline" with respect to a bank is midnight on its
next banking day following the banking day on which it
receives the relevant item or notice or from which the time
for taking action commences to run, whichever is later;
(i) "Obligated bank" means the acceptor of a certified check, the
issuer of a cashier's check, or the drawer of a teller's
check;
(j) "Properly payable" includes the availability of funds for
payment at the time of decision to pay or dishonor;
(k) "Remitter" means the buyer from the obligated bank of a
cashier's check or a teller's check, and the drawer of a
certified check;
(l) "Settle" means to pay in cash, by clearing house settlement,
in a charge or credit or by remittance, or otherwise as
instructed. See N.Y. Uniform Commercial Code 4-104
(1) A payor or collecting bank's authority to accept, pay or collect an item or to account for proceeds of its collection if otherwise effective is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes such authority to accept, pay, collect or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it.
(2) Even with knowledge a bank may for ten days after the date of death pay or certify checks drawn on or prior to that date unless ordered to stop payment by a person claiming an interest in the account.