30-4-402. Bank’s liability to customer for wrongful dishonor — time of determining insufficiency of account. (1) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.

Terms Used In Montana Code 30-4-402

  • account: means any deposit or credit account with a bank and includes a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit;

    (b)"afternoon" means the period of a day between noon and midnight;

    (c)"banking day" means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions;

    (d)"clearinghouse" means an association of banks or other payors regularly clearing items;

    (e)"customer" means a person having an account with a bank or for whom a bank has agreed to collect items and includes a bank maintaining an account at another bank;

    (f)"documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities (30-8-112) or instructions for uncertificated securities (30-8-112), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft;

    (g)"draft" means a draft as defined in 30-3-104 or an item, other than an instrument, that is an order;

    (h)"item" means an instrument or a promise or an order to pay money handled by a bank for collection or payment. See Montana Code 30-4-104

  • Arrest: Taking physical custody of a person by lawful authority.
  • bank: means any person engaged in the business of banking, including a savings bank, savings and loan association, credit union, or trust company;

    (2)"depositary 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;

    (3)"payor bank" means a bank that is the drawee of a draft;

    (4)"intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payor bank;

    (5)"collecting bank" means a bank handling an item for collection except the payor bank;

    (6)"presenting bank" means a bank presenting an item except a payor bank. See Montana Code 30-4-105

  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.

(2)A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.

(3)A payor bank’s determination of the customer’s account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one such determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank’s decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.

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