70A-4-201 - Status of collecting bank as agent and provisional status of credits -- Applicability of chapter -- Item indorsed "pay any bank."
70A-4-201. Status of collecting bank as agent and provisional status of credits --Applicability of chapter -- Item indorsed "pay any bank."
(1) Unless a contrary intent clearly appears and before the time that a settlement given bya collecting bank for an item is or becomes final, the bank, with respect to the item, is an agent orsubagent of the owner of the item and any settlement given for the item is provisional. Thisprovision applies regardless of the form of indorsement or lack of indorsement and even thoughcredit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; butthe continuance of ownership of an item by its owner and any rights of the owner to proceeds ofthe item are subject to rights of a collecting bank, such as those resulting from outstandingadvances on the item and rights of recoupment or setoff. If an item is handled by banks forpurposes of presentment, payment, collection, or return, the relevant provisions of this chapterapply even though action of the parties clearly establishes that a particular bank has purchased theitem and is the owner of it.
(2) After an item has been indorsed with the words "pay any bank" or the like, only abank may acquire the rights of a holder until the item has been:
(a) returned to the customer initiating collection; or
(b) specially indorsed by a bank to a person who is not a bank.
Amended by Chapter 237, 1993 General Session