§ 25-4-214. Insolvency and preference.
§25‑4‑214. Insolvency and preference.
(a) If an item is in orcomes into the possession of a payor or collecting bank that suspends paymentand the item has not been finally paid, the item must be returned by thereceiver, trustee or agent in charge of the closed bank to the presenting bankor the closed bank's customer.
(b) If a payor bankfinally pays an item and suspends payments without making a settlement for theitem with its customer or the presenting bank which settlement is or becomesfinal, the owner of the item has a preferred claim against the payor bank.
(c) If a payor bankgives or a collecting bank gives or receives a provisional settlement for anitem and thereafter suspends payments, the suspension does not prevent orinterfere with the settlement's becoming final if the finality occursautomatically upon the lapse of certain time or the happening of certainevents.
(d) If a collectingbank receives from subsequent parties settlement for an item, which settlementis or becomes final and the bank suspends payments without making a settlementfor the item with its customer which settlement is or becomes final, the ownerof the item has a preferred claim against the collecting bank. (1965,c. 700, s. 1; 1995, c. 232, s. 2.)