Michigan Laws 440.4205 – Depositary bank; item delivered by customer for collection
Current as of: 2023 | Check for updates
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If a customer delivers an item to a depositary bank for collection, then both of the following apply:
(a) The depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer endorses the item, and, if the bank satisfies the other requirements of section 3302, it is a holder in due course.
Terms Used In Michigan Laws 440.4205
- Account: means any depositor credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See Michigan Laws 440.4104
- Bank: means a person engaged in the business of banking, including a saving bank, saving and loan association, credit union, or trust company. See Michigan Laws 440.4105
- Customer: means any person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See Michigan Laws 440.4104
- Delivery: means either of the following:
(i) With respect to an electronic document of title, a voluntary transfer of control. See Michigan Laws 440.1201Depositary bank: means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter. See Michigan Laws 440.4105 Holder: means any of the following:
(i) A person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession. See Michigan Laws 440.1201Item: means an instrument or a promise or order to pay money handled by a bank for collection or pay. See Michigan Laws 440.4104 Payor bank: means a bank that is the drawee of a draft. See Michigan Laws 440.4105
(b) The depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer’s account.