1995 Wisconsin Act 449

404.104 (3) (j) “Notice of dishonor" — s. 403.508 403.503.

(n) “Presentment" — s. 403.504 403.501 (1).

449,24 Section 24 . 404.104 (3) (b), (c), (e), (g), (i), (k) to (m) and (p) to (s) of the statutes are created to read:

404.104 (3) (b) “Alteration" — s. 403.407 (1).

(c) “Cashier's check" — s. 403.104 (7).

(e) “Certified check" — s. 403.409 (4).

(g) “Good faith" — s. 403.103 (1) (d).

(i) “Instrument" — s. 403.104 (2).

(k) “Order" — s. 403.103 (1) (f).

(L) “Ordinary care" — s. 403.103 (1) (g).

(m) “Person entitled to enforce" — s. 403.301.

(p) “Promise" — s. 403.103 (1) (i).

(q) “Prove" — s. 403.103 (1) (j).

(r) “Teller's check" — s. 403.104 (8).

(s) “Unauthorized signature" — s. 403.403.

449,25 Section 25 . 404.104 (3) (c), (e), (i) and (j) of the statutes are repealed.

449,26 Section 26 . 404.104 (4) of the statutes is amended to read:

404.104 (4) In addition, ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

449,27 Section 27 . 404.105 (intro.) of the statutes is amended to read:

404.105 (title) “Depositary bank"; “intermediary bank" “Bank"; “collecting bank"; “payor “depository bank"; “intermediary bank"; “payer bank"; “presenting bank"; “remitting bank". (intro.) In this chapter unless the context otherwise requires:

449,28 Section 28 . 404.105 (1) to (5) of the statutes are renumbered 404.105 (2) to (6) and amended to read:

404.105 (2) “Collecting bank" means any a bank handling the an item for collection except the payor payer bank;.

(3) “Depositary bank" means the first bank to which take an item is transferred for collection even though it is also the payor payer bank;, unless the item is presented for immediate payment over the counter.

(4) “Intermediary bank" means any a bank to which an item is transferred in course of collection except the depositary or payor payer bank ;.

(5) “Payor “Payer bank" means a bank by which an item is payable as drawn or accepted; that is the drawee of a draft.

(6) “Presenting bank" means any a bank presenting an item except a payor payer bank;.

449,29 Section 29 . 404.105 (1) of the statutes is created to read:

404.105 (1) “Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.

449,30 Section 30 . 404.105 (6) of the statutes is repealed.

449,31 Section 31 . 404.106 to 404.108 of the statutes are renumbered 404.107 to 404.109 and amended to read:

404.107 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 shall must be given under this chapter and under ch. 403.

404.108 Time of receipt of items. (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 cut-off cutoff hour for the handling of money and items and the making of entries on its books.

(2) Any An item or deposit of money received on any day after a cut-off 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.

404.109 Delays. (1) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment may, in the case of a specific items item drawn on a payer other than a bank, and with or without the approval of any person involved, may waive, modify or extend time limits imposed or permitted by chs. 401 to 411 for a period not in excess of an exceeding 2 additional banking day days without discharge of secondary parties and without drawers or endorsers or liability to its transferor or any a prior party.

(2) Delay by a collecting bank or payor payor bank beyond time limits prescribed or permitted by chs. 401 to 411 or by instructions is excused if the delay is caused by interruption of communication or computer facilities, suspension of payments by another bank, war, emergency conditions, failure of equipment or other circumstances beyond the control of the bank provided it and the bank exercises such diligence as the circumstances require.

449,32 Section 32 . 404.106 of the statutes is created to read:

404.106 Payable through or payable at bank; collecting bank. (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.

(2) 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.

(3) 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.

449,33 Section 33 . 404.109 of the statutes is repealed.

449,34 Section 34 . 404.110 of the statutes is created to read:

404.110 Electronic presentment. (1) “ Agreement for electronic presentment" means an agreement, clearinghouse rule or federal reserve regulation or operating circular, providing that presentment of an item may be made by transmission of an image of an item or information describing the item (“presentment notice") rather than delivery of the item itself. The agreement may provide for procedures governing retention, presentment, payment, dishonor and other matters concerning items subject to the agreement.

(2) Presentment of an item pursuant to an agreement for electronic presentment is made when the presentment notice is received.

(3) If presentment is made by presentment notice, a reference to “item" or “check" in this chapter means the presentment notice unless the context otherwise indicates.

449,35 Section 35 . 404.111 of the statutes is created to read:

404.111 Statute of limitations. An action to enforce an obligation, duty, or right arising under this chapter must be commenced within 3 years after the cause of action accrues.

449,36 Section 36 . The unnumbered subchapter title preceding 404.201 of the statutes is numbered subchapter II (title) of chapter 404.

449,37 Section 37 . 404.201 of the statutes is amended to read:

404.201 (title) Presumption and duration of agency status Status of collecting banks bank as agent and provisional status of credits; applicability of chapter; item indorsed endorsed “pay any bank". (1) Unless a contrary intent clearly appears and prior to before the time that a settlement given by a collecting bank for an item is or becomes final (ss. 404.211 (3), 404.212 and 404.213), the bank, with respect to the item, is an agent or subagent of the owner of the item and any settlement given for the item is provisional. This provision applies regardless of the form of indorsement endorsement or lack of indorsement endorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such as those resulting from outstanding advances on the item and valid rights of recoupment or setoff. When If an item is handled by banks for purposes of presentment, payment and, collection or return, the relevant provisions of this chapter apply even though action of the parties clearly establishes that a particular bank has purchased the item and is the owner of it.

(2) After an item has been indorsed endorsed with the words “pay any bank" or the like, only a bank may acquire the rights of a holder until any of the following occur:

(a) Until the The item has been returned to the customer initiating collection; or.

(b) Until the The item has been specially indorsed endorsed by a bank to a person who is not a bank.

449,38 Section 38 . 404.202 (title) and (1) (intro.) and (a) to (c) of the statutes are amended to read:

404.202 (title) Responsibility for collection or return; when action seasonable timely. (1) (intro.) A collecting bank must use exercise ordinary care in all of the following:

(a) Presenting an item or sending it for presentment; and.

(b) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be; and.

(c) Settling for an item when the bank receives final settlement; and.

449,39 Section 39 . 404.202 (1) (d) of the statutes is repealed.

449,40 Section 40 . 404.202 (1) (e) of the statutes is renumbered 404.202 (1) (d).

449,41 Section 41 . 404.202 (2) and (3) of the statutes are amended to read:

404.202 (2) A collecting bank taking proper action before its midnight deadline following receipt of an item, notice or payment acts seasonably; taking proper action within a reasonably longer time may be seasonable but the bank has the burden of so establishing exercises ordinary care under sub. (1) by taking proper action before its midnight deadline following receipt of an item, notice or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

(3) Subject to sub. (1) (a), a bank is not liable for the insolvency, neglect, misconduct, mistake or default of another bank or person or for loss or destruction of an item in the possession of others or in transit or in the possession of others.

449,42 Section 42 . 404.203 of the statutes is amended to read:

404.203 Effect of instructions. Subject to the provisions of s. 403.419 to s. 403.420 concerning conversion of instruments and the provisions of both ch. 403 and this chapter to s. 403.206 concerning restrictive indorsements endorsements, only a collecting bank's transferor can give instructions which that affect the bank or constitute notice to it and a collecting bank is not liable to prior parties for any action taken pursuant to such the instructions or in accordance with any agreement with its transferor.

449,43 Section 43 . 404.204 of the statutes is amended to read:

404.204 (title) Methods of sending and presenting; sending direct directly to payor payer bank. (1) A collecting bank must shall send items by a reasonably prompt method, taking into consideration any relevant instructions, the nature of the item, the number of such those items on hand, and the cost of collection involved and the method generally used by it or others to present such those items.

(2) A collecting bank may send any of the following:

(a) Any An item direct directly to the payor payer bank;.

(b) Any An item to any a nonbank payor payer if authorized by its transferor; and.

(c) Any An item other than documentary drafts to any a nonbank payor payer, if authorized by federal reserve regulation or operating letter circular, clearinghouse rule or the like.

(3) Presentment may be made by a presenting bank at a place where the payor payer bank or other payer has requested that presentment be made.

449,44 Section 44 . 404.205 of the statutes is repealed and recreated to read:

404.205 Depositary bank holder of unendorsed item. If a customer delivers an item to a depositary bank for collection, all of the following apply:

(1) The depositary bank becomes a holder of the item at the time that 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 s. 403.302, it is a holder in due course.

(2) The depositary bank warrants to collecting banks, the payer bank or other payer and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.

449,45 Section 45 . 404.206 of the statutes is amended to read:

404.206 Transfer between banks. Any agreed method which that identifies the transferor bank is sufficient for the item's further transfer to another bank.

449,46 Section 46 . 404.207 of the statutes is repealed and recreated to read:

404.207 Transfer warranties. (1) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants all of the following to the transferee and to any subsequent collecting bank:

(a) The warrantor is a person entitled to enforce the item.

(b) All signatures on the item are authentic and authorized.

(c) The item has not been altered.

(d) The item is not subject to a defense or claim in recoupment of any party that can be asserted against the warrantor.

(e) The warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer.

(2) If an item is dishonored, a customer or collecting bank transferring the item and receiving settlement or other consideration is obliged to pay the amount due on the item according to the terms of the item at the time it was transferred or, if the transfer was of an incomplete item, according to its terms when completed as stated in ss. 403.115 and 403.407. The obligation of a transferor is owed to the transferee and to any subsequent collecting bank that takes the item in good faith. A transferor cannot disclaim its obligation under this subsection by an endorsement stating that it is made “without recourse" or otherwise disclaiming liability.

(3) A person to whom the warranties under sub. (1) are made and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the item plus expenses and loss of interest incurred as a result of the breach.

(4) The warranties stated in sub. (1) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(5) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

449,47 Section 47 . 404.208 of the statutes is renumbered 404.210, and 404.210 (1) (intro.), (a) and (b), (2) and (3) (intro.), (a) and (b), as renumbered, are amended to read: