N.Y. Uniform Commercial Code 4-A-207 – Misdescription of Beneficiary
Section 4-A-207. Misdescription of Beneficiary.
Terms Used In N.Y. Uniform Commercial Code 4-A-207
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
(1) Subject to subsection (2), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.
(2) If a payment order received by the beneficiary's bank identifies the beneficiary both by name and by an identifying or bank account number and the name and number identify different persons, the following rules apply:
(a) Except as otherwise provided in subsection (3), if the
beneficiary's bank does not know that the name and number
refer to different persons, it may rely on the number as the
proper identification of the beneficiary of the order. The
beneficiary's bank need not determine whether the name and
number refer to the same person.
(b) If the beneficiary's bank pays the person identified by name
or knows that the name and number identify different persons,
no person has rights as beneficiary except the person paid by
the beneficiary's bank if that person was entitled to receive
payment from the originator of the funds transfer. If no
person has rights as beneficiary, acceptance of the order
cannot occur.
(3) If (i) a payment order described in subsection (2) is accepted, (ii) the originator's payment order described the beneficiary inconsistently by name and number, and (iii) the beneficiary's bank pays the person identified by number as permitted by paragraph (a) of subsection (2), the following rules apply:
(a) If the originator is a bank, the originator is obliged to pay
its order.
(b) If the originator is not a bank and proves that the person
identified by number was not entitled to receive payment from
the originator, the originator is not obliged to pay its
order unless the originator's bank proves that the
originator, before acceptance of the originator's order, had
notice that payment of a payment order issued by the
originator might be made by the beneficiary's bank on the
basis of an identifying or bank account number even if it
identifies a person different from the named beneficiary.
Proof of notice may be made by any admissible evidence. The
originator's bank satisfies the burden of proof if it proves
that the originator, before the payment order was accepted,
signed a writing stating the information to which the notice
relates.
(4) In a case governed by paragraph (a) of subsection (2), if the beneficiary's bank rightfully pays the person identified by number and that person was not entitled to receive payment from the originator, the amount paid may be recovered from that person to the extent allowed by the law governing mistake and restitution as follows:
(a) If the originator is obliged to pay its payment order as
stated in subsection (3), the originator has the right to
recover.
(b) If the originator is not a bank and is not obliged to pay its
payment order, the originator's bank has the right to
recover.