California Commercial Code 4205 – If a customer delivers an item to a depositary bank for collection …
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If a customer delivers an item to a depositary bank for collection both of the following apply:
(a) The depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of Section 3302, it is a holder in due course.
Terms Used In California Commercial Code 4205
- Account: means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit. See California Commercial Code 4104
- Bank: means a person engaged in the business of banking, and includes a savings bank, savings and loan association, credit union, and trust company. See California Commercial Code 1201
- Customer: means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank. See California Commercial Code 4104
- Holder: means :
California Commercial Code 1201
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See California Commercial Code 4104
(b) The depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer’s account.
(Repealed and added by Stats. 1992, Ch. 914, Sec. 23. Effective January 1, 1993.)