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 indorses the item, and, if the bank satisfies the other requirements of § 4-3-302, 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.
History. Acts 1961, No. 185, § 4-205; A.S.A. 1947, § 85-4-205; Acts 1991, No. 572, § 6.
Structure Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 1 - Uniform Commercial Code
Chapter 4 - Bank Deposits and Collections
Part 2 - Collection of Items — Depositary and Collecting Banks
§ 4-4-202. Responsibility for collection or return — When action timely
§ 4-4-203. Effect of instructions
§ 4-4-204. Methods of sending and presenting — Sending directly to payor bank
§ 4-4-205. Depositary bank holder of unindorsed item
§ 4-4-206. Transfer between banks
§ 4-4-207. Transfer warranties
§ 4-4-208. Presentment warranties
§ 4-4-209. Encoding and retention warranties
§ 4-4-210. Security interest of collecting bank in items, accompanying documents, and proceeds
§ 4-4-211. When bank gives value for purposes of holder in due course
§ 4-4-213. Medium and time of settlement by bank
§ 4-4-214. Right of charge-back or refund — Liability of collecting bank — Return of item