Sec. 216. (a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank's customer.
(b) If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.
(c) If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement's becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.
(d) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against the collecting bank.
As added by P.L.222-1993, SEC.32.
Structure Indiana Code
Article 1. Uniform Commercial Code
Chapter 4. Bank Deposits and Collections
26-1-4-102.5. Application of Bank Provisions to Supervised Financial Organizations
26-1-4-103. Variation by Agreement; Measure of Damages; Action Constituting Ordinary Care
26-1-4-104. Definitions and Index of Definitions
26-1-4-106. Payable Through or Payable at Bank; Collecting Bank
26-1-4-107. Separate Office of Bank
26-1-4-108. Time of Receipt of Items
26-1-4-110. Electronic Presentment
26-1-4-111. Statute of Limitations
26-1-4-202. Responsibility for Collection or Return; When Action Timely
26-1-4-203. Effect of Instructions
26-1-4-204. Methods of Sending and Presenting; Sending Directly to Payor Bank
26-1-4-205. Depositary Bank Holder of Unendorsed Items
26-1-4-206. Transfer Between Banks
26-1-4-207. Transfer Warranties
26-1-4-208. Presentment Warranties
26-1-4-209. Encoding and Retention Warranties
26-1-4-210. Security Interest of Collecting Bank in Items, Accompanying Documents, and Proceeds
26-1-4-211. When Bank Gives Value for Purposes of Holder in Due Course
26-1-4-213. Medium and Time of Settlement by Bank
26-1-4-214. Right of Charge-Back or Refund; Liability of Collecting Bank; Return of Item
26-1-4-216. Insolvency and Preference
26-1-4-302. Payor Bank's Responsibility for Late Return of Item
26-1-4-401. When Bank May Charge Customer's Account
26-1-4-403. Customer's Right to Stop Payment; Burden of Proof of Loss
26-1-4-404. Bank Not Obligated to Pay Check More Than Six Months Old
26-1-4-405. Death or Incompetence of Customer
26-1-4-406. Customer's Duty to Discover and Report Unauthorized Signature or Alteration
26-1-4-407. Payor Bank's Right to Subrogation on Improper Payment
26-1-4-502. Presentment of "On Arrival" Drafts
26-1-4-504. Privilege of Presenting Bank to Deal With Goods; Security Interest for Expenses