The U.C.C. Section 4-205(2) Payment/Deposit Warranty: Allow a Drawer to Hold a Depositary Bank Liable For Collecting an Item With a Forged Indorsement
As written, the new section 4-205(2) Payment/Deposit Warranty may provide a new theory upon which to hold a depositary bank liable for handling a stolen check for the benefit of a thief. This Comment will propose that the word "customer" as used in U.C.C. section 4-205 should not be read to include a thief that steals a check, forges an indorsement, and transfers the item to a depositary bank for collection. Such a reading would allow the drawer of the stolen check to sue the depositary bank for breach of warranty. This Comment will first describe the existing recourses available to the drawer against the drawee bank, and the depositary bank. Second, it will analyze section 4- 205(2) according to traditional and familiar rules of statutory construction in order to show that a new cause of action has been created by Revised Article 4 of the U.C.C.
"The U.C.C. Section 4-205(2) Payment/Deposit Warranty: Allow a Drawer to Hold a Depositary Bank Liable For Collecting an Item With a Forged Indorsement,"
Akron Law Review: Vol. 28:
3, Article 8.
Available at: https://ideaexchange.uakron.edu/akronlawreview/vol28/iss3/8