§ 3206. Restrictive indorsement
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 13 Pa.C.S.A. Commercial Code
13 Pa.C.S.A. § 3206
§ 3206. Restrictive indorsement
(b) Conditional indorsement.--An indorsement stating a condition to the right of the indorsee to receive payment does not affect the right of the indorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.
(c) Specified purpose indorsement.--If an instrument bears an indorsement described in section 4201(b) (relating to status of collecting bank as agent and provisional status of credits; applicability of division; item indorsed “pay any bank”) or in blank or to a particular bank using the words “for deposit,” “for collection” or other words indicating a purpose of having the instrument collected by a bank for the indorser or for a particular account, the following rules apply:
(d) Indorsement for benefit of indorser or another person.--Except for an indorsement covered by subsection (c), if an instrument bears an indorsement using words to the effect that payment is to be made to the indorsee as agent, trustee or other fiduciary for the benefit of the indorser or another person, the following rules apply:
(1) Unless there is notice of breach of fiduciary duty as provided in section 3307 (relating to notice of breach of fiduciary duty), a person who purchases the instrument from the indorsee or takes the instrument from the indorsee for collection or payment may pay the proceeds of payment or the value given for the instrument to the indorsee without regard to whether the indorsee violates a fiduciary duty to the indorser.
(e) Holder in due course.--The presence on an instrument of an indorsement to which this section applies does not prevent a purchaser of the instrument from becoming a holder in due course of the instrument unless the purchaser is a converter under subsection (c) or has notice or knowledge of breach of fiduciary duty as stated in subsection (d).
Credits
1992, July 9, P.L. 507, No. 97, § 5, effective in one year.
13 Pa.C.S.A. § 3206, PA ST 13 Pa.C.S.A. § 3206
Current through Act 13 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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