Michigan Compiled Laws § 440.4201 Agency Status Of Banks; Provisional Status Of Credits; Applicability Of Article; Endorsement With Pay Any Bank.


440.4201 Agency status of banks; provisional status of credits; applicability of article; endorsement with pay any bank.

Sec. 4201.

(1) 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of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such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 setoff. If an item is handled by banks for purposes of presentment, payment, collection, or return, the relevant provisions of this article apply even though action of parties clearly establishes that a particular bank has purchased the item and is the owner of it.

(2) 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 either of the following:

(a) Returned to the customer initiating collection.

(b) Specially endorsed by a bank to a person who is not a bank.


History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993


Section: 440.4201  440.4202  440.4203  440.4204  440.4205  440.4206  440.4207  440.4208  440.4209  440.4210  440.4211  440.4212  440.4213  440.4214  440.4215  Next

Last modified: October 10, 2016