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

1. (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 363-302, it is a holder in due course; and
2. (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.

HISTORY: 1962 Code Section 10.4-205; 1966 (54) 2716; 2008 Act No. 204, Section 3, eff July 1, 2008. Definitional Cross References: "Account" Section 36-4-104(a)(1) "Bank" Section 36-4-105(1) "Collecting Bank" Section 36-4-105(5) "Customer" Section 36-4-104(a)(5) "Depositary Bank" Section 36-4-105(a)(2) "Drawer" Section 36-3-103(a)(5) "Holder" Section 36-1-201(20) "Holder in Due Course" Section 36-3-302(a) "Indorsement" Section 36-3-204(a) "Item" Section 36-4-104(a)(9) "Payor Bank" Section 36-4-105(3)