8.4-214 - Insolvency and preference. - Virginia Statutes

§ 8.4-214. Insolvency and preference.

(a) If an item is in or comes into the possession of a payor or collectingbank that suspends payment and the item has not been finally paid, the itemmust be returned by the receiver, trustee, or agent in charge of the closedbank to the presenting bank or the closed bank's customer.

(b) If a payor bank finally pays an item and suspends payments without makinga settlement for the item with its customer or the presenting bank whichsettlement is or becomes final, the owner of the item has a preferred claimagainst the payor bank.

(c) If a payor bank gives or a collecting bank gives or receives aprovisional settlement for an item and thereafter suspends payments, thesuspension does not prevent or interfere with the settlement's becoming finalif the finality occurs automatically upon the lapse of certain time or thehappening of certain events.

(d) If a collecting bank receives from subsequent parties settlement for anitem which settlement is or becomes final and the bank suspends paymentswithout making a settlement for the item with its customer which settlementis or becomes final, the owner of the item has a preferred claim against thecollecting bank.

(Code 1950, § 6-63; 1964, c. 219; 1992, c. 693.)