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 endorses the item, and, if the bank satisfies the other requirements of section 42a-3-302, 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.
(1959, P.A. 133, S. 4-205; P.A. 91-304, S. 83.)
History: P.A. 91-304 entirely replaced former provisions re authority of a depositary bank to supply a customer's endorsement and the effect on an intermediary bank or payor bank which is not a depositary bank of a restrictive endorsement of a person other than the bank's immediate transferor with provisions re when a depositary bank becomes a holder and the warranty it gives when a customer delivers an item to such bank for collection.