Customer's duty to discover and report unauthorized signature or alteration.
Payer bank's right to subrogation on improper payment.
COLLECTION OF DOCUMENTARY DRAFTS
Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.
Presentment of "on arrival" drafts.
Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need.
Privilege of presenting bank to deal with goods; security interest for expenses.
Ch. 404 Cross-reference
See definitions in s. 401.201
GENERAL PROVISIONS AND DEFINITIONS
The extent that items within this chapter are also within chs. 403
, they are subject to those chapters. If there is conflict, this chapter governs ch. 403
, but ch. 408
governs this chapter.
The liability of a bank for action or nonaction with respect to an item handled by it for purposes of presentment, payment or collection is governed by the law of the place where the bank is located. In the case of action or nonaction by or at a branch or separate office of a bank, its liability is governed by the law of the place where the branch or separate office is located.
History: 1995 a. 449
Variation by agreement; measure of damages; action constituting ordinary care. 404.103(1)
The effect of the provisions of this chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.
Federal reserve regulations and operating circulars, clearinghouse rules, and the like, have the effect of agreements under sub. (1)
, whether or not specifically assented to by all parties interested in items handled.
Action or nonaction approved by this chapter or pursuant to federal reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or nonaction consistent with clearinghouse rules and the like or with a general banking usage not disapproved by this chapter, is prima facie the exercise of ordinary care.
The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.
The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith it includes any other damages the party suffered as a proximate consequence.
History: 1991 a. 304
; 1995 a. 449
Definitions and index of definitions. 404.104(1)
In this chapter, unless the context otherwise requires:
"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.
"Afternoon" means the period of a day between noon and midnight.
"Banking day" means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions.
"Clearinghouse" means an association of banks or other payers regularly clearing items.
"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.
"Documentary draft" means a draft to be presented for acceptance or payment if specified documents, certificated securities or instructions for uncertificated securities, or other certificates, statements or the like are to be received by the drawee or other payer before acceptance or payment of the draft.
"Draft" means a draft as defined in s. 403.104 (5)
, or an item, other than an instrument, that is an order.
"Drawee" means a person ordered in a draft to make a payment.
"Item" means an instrument or a promise or order to pay money handled by a bank for collection or payment. "Item" does not include a payment order governed by ch. 410
or a credit or debit card slip.
"Midnight deadline" with respect to a bank is midnight on its next banking day following the banking day on which it receives the relevant item or notice or from which the time for taking action commences to run, whichever is later.
"Settle" means to pay in cash, by clearinghouse settlement, in a charge or credit or by remittance, or otherwise as agreed. A settlement may be either provisional or final.
"Suspends payments" with respect to a bank means that it has been closed by order of the supervisory authorities, that a public officer has been appointed to take it over or that it ceases or refuses to make payments in the ordinary course of business.
Other definitions applying to this chapter and the sections in which they appear are:
The following definitions in other chapters apply to this chapter:
In addition, ch. 401
contains general definitions and principles of construction and interpretation applicable throughout this chapter.
Sub. (1) (i) is a source of bank discretion and does not limit a bank's power to pay overdrafts. Pulaski State Bank v. Kalbe, 122 Wis. 2d 663
, 364 N.W.2d 162
(Ct. App. 1985).
"Bank"; "collecting bank"; "depository bank"; "intermediary bank"; "payer bank"; "presenting bank".
In this chapter:
"Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.
"Collecting bank" means a bank handling an item for collection except the payer bank.
"Depositary bank" means the first bank to take an item even though it is also the payer bank, unless the item is presented for immediate payment over the counter.
"Intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payer bank.
"Payer bank" means a bank that is the drawee of a draft.
"Presenting bank" means a bank presenting an item except a payer bank.
History: 1983 a. 189
; 1995 a. 449
Payable through or payable at bank; collecting bank. 404.106(1)(1)
If an item states that it is "payable through" a bank identified in the item, the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item and the item may be presented for payment only by or through the bank.
If an item states that it is "payable at" a bank identified in the item, the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item and the item may be presented for payment only by or through the bank.
If a draft names a nonbank drawee and it is unclear whether a bank named in the draft is a codrawee or a collecting bank, the bank is a collecting bank.
History: 1995 a. 449
Separate office of a bank.
A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders must be given under this chapter and under ch. 403
History: 1995 a. 449
; Stats. 1995 s. 404.107.
Time of receipt of items. 404.108(1)
For the purpose of allowing time to process items, prove balances and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of 2 p.m. or later as a cutoff hour for the handling of money and items and the making of entries on its books.
An item or deposit of money received on any day after a cutoff hour so fixed or after the close of the banking day may be treated as being received at the opening of the next banking day.
History: 1995 a. 449
; Stats. 1995 s. 404.108.