Okla. Stat. tit. 12A § 4-205

Current through Laws 2024, c. 453.

Section 4-205 - Depositary Bank Holder of Unindorsed Item

If a customer delivers an item to a depositary bank for collection:

(1) 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 3-302 of this title, it is a holder in due course; and

(2) 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.

Okla. Stat. tit. 12A, § 4-205

Laws 1961, p. 124, § 4-205; Amended by Laws 1991, SB 25, c. 117, § 109, eff. 1/1/1992.

Oklahoma Code Comment

1. The question that may arise when an item is presented unindorsed is whether an item taken and presented in accordance with this Section is "properly payable" under Section 4-401 . Under pre-revision Section 4-205, the indorsement supplied by the depositary bank was effective as the customer's indorsement. Under current Section 205, if the customer is a holder then the depositary bank also becomes a horde; or, if it satisfies the proper conditions, a holder in due course. Furthermore, the bank obtains its status without reliance on the shelter principles under Section 3-203 or its own holder status by meeting the other requirements for that status (indorsement). No reason exists for an unindorsed item satisfying this Section to be anything other than properly payable because it would be fully enforceable against all prior parties, and the warranty under subsection (b) should alleviate any concern to the contrary. The problem arises if the customer is not a holder under sub section 1-201(20) . Then the item is not enforceable. But this was true before, for example, in the case of a forged indorsement or because the item was not deposited to the payee's account.

2. This Section relieves any concern about a depositary bank's liability for failure to supply a missing indorsement. See Total Aviation Services, Inc. v. United Jersey Bank, 39 U.C.C. Rep. Serv. 969, 1984 W.L. 178961 (E.D.N.Y. 1984).