§ 25-4-503. Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need.
§25‑4‑503. Responsibility of presenting bank for documents andgoods; report of reasons for dishonor; referee in case of need.
Unless otherwise instructedand except as provided in Article 5, a bank presenting a documentary draft:
(1) Must deliver the documentsto the drawee on acceptance of the draft if it is payable more than three daysafter presentment; otherwise, only on payment; and
(2) Upon dishonor,either in the case of presentment for acceptance or presentment for payment,may seek and follow instructions from any referee in case of need designated inthe draft or, if the presenting bank does not choose to utilize the referee'sservices, it must use diligence and good faith to ascertain the reason fordishonor, must notify its transferor of the dishonor and of the results of itseffort to ascertain the reasons therefor, and must request instructions.
However, the presenting bank isunder no obligation with respect to goods represented by the documents exceptto follow any reasonable instructions seasonably received; it has a right toreimbursement for any expense incurred in following instructions and toprepayment of or indemnity for those expenses. (1899, c. 733, s. 131; Rev.,s. 2281; C.S., s. 3113; 1965, c. 700, s. 1; 1995, c. 232, s. 2.)