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Status of collecting bank as agent and provisional status of credits; applicability of division; item indorsed

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                                CHAPTER 42
                     COLLECTION OF ITEMS: DEPOSITARY
                           AND COLLECTING BANKS

     Sec.
     4201.  Status of collecting bank as agent and provisional
            status of credits; applicability of division; item
            indorsed "pay any bank."
     4202.  Responsibility for collection or return; when action
            timely.
     4203.  Effect of instructions.
     4204.  Methods of sending and presenting; sending directly to
            payor bank.
     4205.  Depositary bank holder of unindorsed item.
     4206.  Transfer between banks.
     4207.  Transfer warranties.
     4208.  Presentment warranties.
     4209.  Encoding and retention warranties.
     4210.  Security interest of collecting bank in items,
            accompanying documents and proceeds.
     4211.  When bank gives value for purposes of holder in due
            course.
     4212.  Presentment by notice of item not payable by, through
            or at a bank; liability of drawer or indorser.
     4213.  Medium and time of settlement by bank.
     4214.  Right of charge-back or refund; liability of
            collecting bank; return of item.
     4215.  Final payment of item by payor bank; when provisional
            debits and credits become final; when certain credits
            become available for withdrawal.
     4216.  Insolvency and preference.

        Enactment.  Chapter 42 was added November 1, 1979, P.L.255,
     No.86, effective January 1, 1980.
     § 4201.  Status of collecting bank as agent and provisional
                status of credits; applicability of division; item
                indorsed "pay any bank."
        (a)  Agency status of bank and provisional status of
     settlement.--Unless a contrary intent clearly appears and 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 sub-agent 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 division apply even though action of the
     parties clearly establishes that a particular bank has purchased
     the item and is the owner of it.
        (b)  Effect of "pay any bank" indorsement.--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.
     (July 9, 1992, P.L.507, No.97, eff. one year)

        Cross References.  Section 4201 is referred to in section
     3206 of this title.

Last modified: November 27, 2007