Subject to Article 3 concerning conversion of instruments (Section 7-3-420) and restrictive indorsements (Section 7-3-206), only a collecting bank's transferor can give instructions 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 the instructions or in accordance with any agreement with its transferor.
Structure Code of Alabama
Article 4 - Bank Deposits and Collections.
Part 2 - Collection of Items: Depositary and Collecting Banks.
Section 7-4-202 - Responsibility for Collection or Return; When Action Timely.
Section 7-4-203 - Effect of Instructions.
Section 7-4-204 - Methods of Sending and Presenting; Sending Directly to Payor Bank.
Section 7-4-205 - Depositary Bank Holder of Unindorsed Item.
Section 7-4-206 - Transfer Between Banks.
Section 7-4-208 - Presentment Warranties.
Section 7-4-207 - Transfer Warranties.
Section 7-4-209 - Encoding and Retention Warranties.
Section 7-4-211 - When Bank Gives Value for Purposes of Holder in Due Course.
Section 7-4-213 - Medium and Time of Settlement by Bank.
Section 7-4-214 - Right of Charge-Back or Refund; Liability of Collecting Bank; Return of Item.