400.4-201. Status of collecting bank as agent and provisional status of credits--applicability of article--item endorsed "pay any bank".
Status of collecting bank as agent and provisional status ofcredits--applicability of article--item endorsed "pay any bank".
400.4-201. (a) Unless a contrary intent clearly appearsand before the time that a settlement given by a collecting bankfor an item is or becomes final, the bank, with respect to theitem, is an agent or sub-agent of the owner of the item and anysettlement given for the item is provisional. This provisionapplies regardless of the form of endorsement or lack ofendorsement and even though credit given for the item is subjectto immediate withdrawal as of right or is in fact withdrawn; butthe continuance of ownership of an item by its owner and anyrights of the owner to proceeds of the item are subject to rightsof a collecting bank such as those resulting from outstandingadvances on the item and rights of recoupment or setoff. If anitem is handled by banks for purposes of presentment, payment,collection, or return, the relevant provisions of this articleapply even though action of the parties clearly establishes thata particular bank has purchased the item and is the owner of it.
(b) After an item has been endorsed with the words "pay anybank" or the like, only a bank may acquire the rights of a holderuntil the item has been:
(1) returned to the customer initiating collection; or
(2) specially endorsed by a bank to a person who is not abank.
(L. 1963 p. 503 § 4-201, A.L. 1992 S.B. 448)