Sec. 42a-5-113. Transfer by operation of law.
Sec. 42a-5-113. Transfer by operation of law. (a) A successor of a beneficiary
may consent to amendments, sign and present documents, and receive payment or other
items of value in the name of the beneficiary without disclosing its status as a successor.
(b) A successor of a beneficiary may consent to amendments, sign and present
documents, and receive payment or other items of value in its own name as the disclosed
successor of the beneficiary. Except as otherwise provided in subsection (e) of this
section, an issuer shall recognize a disclosed successor of a beneficiary as beneficiary
in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard
practice referred to in subsection (e) of section 42a-5-108 or, in the absence of such a
practice, compliance with other reasonable procedures sufficient to protect the issuer.
(c) An issuer is not obliged to determine whether a purported successor is a successor
of a beneficiary or whether the signature of a purported successor is genuine or authorized.
(d) Honor of a purported successor's apparently complying presentation under subsection (a) or (b) of this section has the consequences specified in subsection (i) of
section 42a-5-108 even if the purported successor is not the successor of a beneficiary.
Documents signed in the name of the beneficiary or of a disclosed successor by a person
who is neither the beneficiary nor the successor of the beneficiary are forged documents
for the purposes of section 42a-5-109.
(e) An issuer whose rights of reimbursement are not covered by subsection (d) of
this section or substantially similar law and any confirmer or nominated person may
decline to recognize a presentation under subsection (b) of this section.
(f) A beneficiary whose name is changed after the issuance of a letter of credit has
the same rights and obligations as a successor of a beneficiary under this section.
(1959, P.A. 133, S. 5-113; P.A. 96-198, S. 13.)
History: P.A. 96-198 entirely replaced former provisions re indemnities to induce honor, negotiation or reimbursement
with provisions re transfer by operation of law.
Cited. 173 C. 492.