§ 25-4-201. Status of collecting bank as agent and provisional status of credits; applicability of Article; item indorsed "pay any bank". - North Carolina Statutes

Part 2.

COLLECTION OF ITEMS:  DEPOSITARYAND COLLECTING BANKS.

§ 25‑4‑201. Status of collecting bank as agent and provisional status of credits;applicability of Article; item indorsed "pay any bank".

(a)        Unless a contraryintent clearly appears and before the time that a settlement given by acollecting bank for an item is or becomes final, the bank, with respect to theitem, is an agent or subagent of the owner of the item and any settlement givenfor the item is provisional. This provision applies regardless of the form ofindorsement or lack or indorsement and even though credit given for the item issubject to immediate withdrawal as of right or is in fact withdrawn; but thecontinuance of ownership of an item by its owner and any rights of the owner toproceeds of the item are subject to rights of a collecting bank, such as thoseresulting from outstanding advances on the item and rights of recoupment orsetoff. If an item is handled by banks for purposes of presentment, payment,collection, or return, the relevant provisions of this Article apply eventhough action of the parties clearly establishes that a particular bank haspurchased the item and is the owner of it.

(b)        After an item hasbeen indorsed with the words "pay any bank" or the like, only a bankmay acquire the rights of a holder until the item has been:

(1)        Returned to thecustomer initiating collection; or

(2)        Specially indorsedby a bank to a person who is not a bank. (1965, c. 700, s. 1; 1995, c.232, s. 2.)