8.4A-207 - A-207. Misdescription of beneficiary.
§ 8.4A-207. Misdescription of beneficiary.
(a) Subject to subsection (b) of this section, if, in a payment orderreceived by the beneficiary's bank, the name, bank account number, or otheridentification of the beneficiary refers to a nonexistent or unidentifiableperson or account, no person has rights as a beneficiary of the order andacceptance of the order cannot occur.
(b) If a payment order received by the beneficiary's bank identifies thebeneficiary both by name and by an identifying or bank account number and thename and number identify different persons, the following rules apply:
(1) Except as otherwise provided in subsection (c) of this section, if thebeneficiary's bank does not know that the name and number refer to differentpersons, it may rely on the number as the proper identification of thebeneficiary of the order. The beneficiary's bank need not determine whetherthe name and number refer to the same person.
(2) If the beneficiary's bank pays the person identified by name or knowsthat the name and number identify different persons, no person has rights asbeneficiary except the person paid by the beneficiary's bank if that personwas entitled to receive payment from the originator of the funds transfer.If no person has rights as beneficiary, acceptance of the order cannot occur.
(c) If (i) a payment order described in subsection (b) of this section isaccepted, (ii) the originator's payment order described the beneficiaryinconsistently by name and number, and (iii) the beneficiary's bank pays theperson identified by number as permitted by subdivision (b) (1) of thissection, the following rules apply:
(1) If the originator is a bank, the originator is obliged to pay its order.
(2) If the originator is not a bank and proves that the person identified bynumber was not entitled to receive payment from the originator, theoriginator is not obliged to pay its order unless the originator's bankproves that the originator, before acceptance of the originator's order, hadnotice that payment of a payment order issued by the originator might be madeby the beneficiary's bank on the basis of an identifying or bank accountnumber even if it identifies a person different from the named beneficiary.Proof of notice may be made by any admissible evidence. The originator'sbank satisfies the burden of proof if it proves that the originator, beforethe payment order was accepted, signed a writing stating the information towhich the notice relates.
(d) In a case governed by subdivision (b) (1) of this section, if thebeneficiary's bank rightfully pays the person identified by number and thatperson was not entitled to receive payment from the originator, the amountpaid may be recovered from that person to the extent allowed by the lawgoverning mistake and restitution as follows:
(1) If the originator is obliged to pay its payment order as stated insubsection (c) of this section, the originator has the right to recover.
(2) If the originator is not a bank and is not obliged to pay its paymentorder, the originator's bank has the right to recover.
(1990, c. 9.)