47-4201. Status of collecting bank as agent
and provisional status of credits; applicability of chapter; item
indorsed "pay any bank"
A. Unless a contrary intent clearly appears before the time that a settlement given
by a collecting bank for an item is or becomes final, the bank, with respect to the item,
is an agent or subagent of the owner of the item and any settlement given for the item is
provisional. This provision applies regardless of the form of indorsement or lack of
indorsement and even though credit given for the item is subject to immediate withdrawal
as of right or is in fact withdrawn; but the continuance of ownership of an item by its
owner and any rights of the owner to proceeds of the item are subject to rights of a
collecting bank, such as those resulting from outstanding advances on the item and rights
of recoupment or setoff. If an item is handled by banks for purposes of presentment,
payment, collection or return, the relevant provisions of this chapter apply even though
action of the parties clearly establishes that a particular bank has purchased the item
and is the owner of it.
B. After an item has been indorsed with the words "pay any bank" or the like, only
a bank may acquire the rights of a holder until the item has been:
1. Returned to the customer initiating collection; or
2. Specially indorsed by a bank to a person who is not a bank.
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