(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:
(1) A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline; or
(2) Any other properly payable item unless, within the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.
(b) The liability of a payor bank to pay an item pursuant to subsection (a) is subject to defenses based on breach of a presentment warranty (Section 7-4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
(Acts 1965, No. 549, p. 811; repealed by Acts 1995, No. 95-668, p. 1381, §2; added by Acts 1995, No. 95-668, p. 1381, §2.)
Notes of Decisions
Cent. Bank of Alabama, Na v. Peoples Nat. Bank Huntsville, 401 So. 2d 14 (Ala. 1981).
“Peoples contends that under the midnight deadline theory Central was correctly found liable because Central failed to comply with Code 1975, § 7-4-302: ... [I]f an item is presented on and received by a payor bank the bank is accountable for the amount of: (a) A demand item…”
Troy Bank & Trust Co. v. The Citizens Bank, 166 So. 3d 57 (Ala. 2014).
· cites it 2× “The provision was thought to be "an unnecessary source of confusion," especially since the revised section deleted the process-of-posting test.”
Pope v. Colonial Bank, 692 So. 2d 123 (Ala. Civ. App. 1997).
· cites it 4× “Specifically, the Popes contend that they presented sufficient evidence to create a genuine issue of a material fact as to whether Colonial was guilty of fraud, intentional breach of duty, conspiracy, and untimely dishonor of a check, pursuant to Ala. Code 1975, § 7-4-302. Rule…”
— Ala. Code § 7-4-302(a) — 1 case
Troy Bank & Trust Co. v. The Citizens Bank, 166 So. 3d 57 (Ala. 2014).
“The provision was thought to be "an unnecessary source of confusion," especially since the revised section deleted the process-of-posting test.”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.