§ 25-4A-208. Misdescription of intermediary bank or beneficiary's bank. - North Carolina Statutes

§ 25‑4A‑208. Misdescription of intermediary bank or beneficiary's bank.

(a)        This subsectionapplies to a payment order identifying an intermediary bank or thebeneficiary's bank only by an identifying number.

(1)        The receiving bankmay rely on the number as the proper identification of the intermediary orbeneficiary's bank and need not determine whether the number identifies a bank.

(2)        The sender isobliged to compensate the receiving bank for any loss and expenses incurred bythe receiving bank as a result of its reliance on the number in executing orattempting to execute the order.

(b)        This subsectionapplies to a payment order identifying an intermediary bank or thebeneficiary's bank both by name and an identifying number if the name andnumber identify different persons.

(1)        If the sender is abank, the receiving bank may rely on the number as the proper identification ofthe intermediary or beneficiary's bank if the receiving bank, when it executesthe sender's order, does not know that the name and number identify differentpersons.  The receiving bank need not determine whether the name and numberrefer to the same person or whether the number refers to a bank.  The sender isobliged to compensate the receiving bank for any loss and expenses incurred bythe receiving bank as a result of its reliance on the number in executing orattempting to execute the order.

(2)        If the sender is nota bank and the receiving bank proves that the sender, before the payment orderwas accepted, had notice that the receiving bank might rely on the number asthe proper identification of the intermediary or beneficiary's bank even if itidentifies a person different from the bank identified by name, the rights andobligations of the sender and the receiving bank are governed by subsection(b)(1), as though the sender were a bank.  Proof of notice may be made by anyadmissible evidence.  The receiving bank satisfies the burden of proof if itproves that the sender, before the payment order was accepted, signed a writingstating the information to which the notice relates.

(3)        Regardless ofwhether the sender is a bank, the receiving bank may rely on the name as theproper identification of the intermediary or beneficiary's bank if thereceiving bank, at the time it executes the sender's order, does not know thatthe name and number identify different persons.  The receiving bank need notdetermine whether the name and number refer to the same person.

(4)        If the receivingbank knows that the name and number identify different persons, reliance oneither the name or the number in executing the sender's payment order is abreach of the obligation stated in G.S. 25‑4A‑302(a)(1). (1993,c. 157, s. 1.)