70A-4a-207 - Misdescription of beneficiary.
70A-4a-207. Misdescription of beneficiary.
(1) Subject to Subsection (2), if, in a payment order received by the beneficiary's bank,the name, bank account number, or other identification of the beneficiary refers to a nonexistentor unidentifiable person or account, no person has rights as a beneficiary of the order andacceptance of the order cannot occur.
(2) If a payment order received by the beneficiary's bank identifies the beneficiary both byname and by an identifying or bank account number and the name and number identify differentpersons then the following rules apply.
(3) Except as otherwise provided in Subsection (5), the beneficiary's bank may treat theperson identified by number as the beneficiary of the order if the bank does not know that thename and number refer to different persons, it may rely on the number as the proper identificationof the beneficiary of the order. The beneficiary's bank need not determine whether the name andnumber refer to the same person.
(4) If the beneficiary's bank pays the person identified by name or knows that the nameand number identify different persons, no person has rights as beneficiary except the person paidby the beneficiary's bank if that person was entitled to receive payment from the originator of thefunds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.
(5) If the conditions listed in Subsections (5)(a), (b), and (c) are present, the rules listed inSubsections (6) and (7) apply:
(a) a payment order described in Subsection (2) is accepted;
(b) the originator's payment order described the beneficiary inconsistently by name andnumber; and
(c) the beneficiary's bank pays the person identified by number as permitted bySubsection (2)(a).
(6) If the originator is a bank, the originator is obliged to pay its order.
(7) If the originator is not a bank and proves that the person identified by number was notentitled to receive payment from the originator, the originator is not obliged to pay its order unlessthe originator's bank proves that the originator, before acceptance of the originator's order, hadnotice that payment of a payment order issued by the originator might be made by thebeneficiary's bank on the basis of an identifying or bank account number even if it identifies aperson different from the named beneficiary. Proof of notice may be made by any admissibleevidence. The originator's bank satisfies the burden of proof it if proves that the originator, beforethe payment order was accepted, signed a writing stating the information to which the noticerelates.
(8) In a case governed by Subsection (2)(a), if the beneficiary's bank rightfully pays theperson identified by number and that person was not entitled to receive payment from theoriginator, the amount paid may be recovered from that person to the extent allowed by the lawgoverning mistake and rescission as follows:
(a) If the originator is obliged to pay its payment order as stated in Subsection (5), theoriginator has the right to recover.
(b) If the originator is not a bank and is not obliged to pay its payment order, theoriginator's bank has the right to recover.
Amended by Chapter 237, 1993 General Session