§ 25-3-602. Payment. - North Carolina Statutes

§25‑3‑602.  Payment.

(a)        Subject tosubsection (b) of this section, an instrument is paid to the extent payment ismade (i) by or on behalf of a party obliged to pay the instrument, and (ii) toa person entitled to enforce the instrument. To the extent of the payment, theobligation of the party obliged to pay the instrument is discharged even thoughpayment is made with knowledge of a claim to the instrument under G.S. 25‑3‑306by another person.

(b)        The obligation of aparty to pay the instrument is not discharged under subsection (a) of thissection if:

(1)        A claim to theinstrument under G.S. 25‑3‑306 is enforceable against the partyreceiving payment and (i) payment is made with knowledge by the payor thatpayment is prohibited by injunction or similar process of a court of competentjurisdiction, or (ii) in the case of an instrument other than a cashier'scheck, teller's check, or certified check, the party making payment accepted,from the person having a claim to the instrument, indemnity against lossresulting from refusal to pay the person entitled to enforce the instrument; or

(2)        The person makingpayment knows that the instrument is a stolen instrument and pays a person itknows is in wrongful possession of the instrument. (1899, c. 733, ss. 55, 88,119, 121, 171 to 177; Rev., ss. 2204, 2238, 2269, 2271, 2321 to 2327; C.S., ss.3036, 3070, 3101, 3103, 3153 to 3159; 1965, c. 700, s. 1; 1995, c. 232, s. 1.)