Texas Business & Commerce Code - Section 4.216. Insolvency And Preference
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§ 4.216. INSOLVENCY AND PREFERENCE. (a) If an item is in
or comes into the possession of a payor or collecting bank that
suspends payment and the item has not been finally paid, the item
must be returned by the receiver, trustee, or agent in charge of the
closed bank to the presenting bank or the closed bank's customer.
(b) If a payor bank finally pays an item and suspends
payments without making a settlement for the item with its customer
or the presenting bank, which settlement is or becomes final, the
owner of the item has a preferred claim against the payor bank.
(c) If a payor bank gives or a collecting bank gives or
receives a provisional settlement for an item and thereafter
suspends payments, the suspension does not prevent or interfere
with the settlement's becoming final if the finality occurs
automatically upon the lapse of certain time or the happening of
certain events.
(d) If a collecting bank receives from subsequent parties
settlement for an item, which settlement is or becomes final, and
the bank suspends payments without making a settlement for the item
with its customer, which settlement is or becomes final, the owner
of the item has a preferred claim against the collecting bank.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
Renumbered from § 4.214 and amended by Acts 1995, 74th Leg., ch.
921, § 4, eff. Jan. 1, 1996.
Section: 4.209 4.210 4.211 4.212 4.213 4.214 4.215 4.216 4.301 4.302 4.303 4.401 4.402 4.403 4.404
Last modified: August 10, 2007
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