RELATIONSHIP BETWEEN PAYER BANK AND ITS CUSTOMER
404.401 When bank may charge customer's account.
404.402 Bank's liability to customer for wrongful dishonor; time of determining insufficiency of account.
404.403 Customer's right to stop payment; burden of proof of loss.
404.404 Bank not obligated to pay check more than 6 months old.
404.405 Death or incompetence of customer.
404.406 Customer's duty to discover and report unauthorized signature or alteration.
404.407 Payer bank's right to subrogation on improper payment.
SUBCHAPTER V
COLLECTION OF DOCUMENTARY DRAFTS
404.501 Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.
404.502 Presentment of “on arrival" drafts.
404.503 Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need.
404.504 Privilege of presenting bank to deal with goods; security interest for expenses.
Ch. 404 Cross-reference
Cross-reference: See definitions in s.
401.201.
GENERAL PROVISIONS AND DEFINITIONS
404.102(1)(1) The extent that items within this chapter are also within
chs. 403 and
408, they are subject to those chapters. If there is conflict, this chapter governs
ch. 403, but
ch. 408 governs this chapter.
404.102(2)
(2) 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.
404.102 History
History: 1995 a. 449.
404.103
404.103
Variation by agreement; measure of damages; action constituting ordinary care. 404.103(1)
(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.
404.103(2)
(2) 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.
404.103(3)
(3) 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.
404.103(4)
(4) The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.
404.103(5)
(5) 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.
404.103 History
History: 1991 a. 304 s.
51;
1995 a. 449.
404.104
404.104
Definitions and index of definitions. 404.104(1)
(1) In this chapter, unless the context otherwise requires:
404.104(1)(a)
(a) “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.
404.104(1)(b)
(b) “Afternoon" means the period of a day between noon and midnight.
404.104(1)(c)
(c) “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.
404.104(1)(d)
(d) “Clearinghouse" means an association of banks or other payers regularly clearing items.
404.104(1)(e)
(e) “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.
404.104(1)(f)
(f) “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.
404.104(1)(g)
(g) “Draft" means a draft as defined in
s. 403.104 (5), or an item, other than an instrument, that is an order.
404.104(1)(h)
(h) “Drawee" means a person ordered in a draft to make a payment.
404.104(1)(i)
(i) “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.
404.104(1)(j)
(j) “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.
404.104(1)(k)
(k) “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.
404.104(1)(L)
(L) “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.
404.104(2)
(2) Other definitions applying to this chapter and the sections in which they appear are:
404.104(3)
(3) The following definitions in other chapters apply to this chapter:
404.104(4)
(4) In addition,
ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.
404.105
404.105 “
Bank"; “collecting bank"; “depository bank"; “intermediary bank"; “payer bank"; “presenting bank". In this chapter:
404.105(1)
(1) “Bank" means a person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.
404.105(2)
(2) “Collecting bank" means a bank handling an item for collection except the payer bank.
404.105(3)
(3) “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.
404.105(4)
(4) “Intermediary bank" means a bank to which an item is transferred in course of collection except the depositary or payer bank.
404.105(5)
(5) “Payer bank" means a bank that is the drawee of a draft.
404.105(6)
(6) “Presenting bank" means a bank presenting an item except a payer bank.
404.105 History
History: 1983 a. 189;
1995 a. 449.
404.106
404.106
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.
404.106(2)
(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.
404.106(3)
(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.
404.106 History
History: 1995 a. 449.
404.107
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 must be given under this chapter and under
ch. 403.
