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Illinois Compiled Statutes

810 ILCS 5/3-420 (2026)

Conversion of instrument

✓ current as of May 2026
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(810 ILCS 5/3-420) (from Ch. 26, par. 3-420)
    Sec. 3-420. Conversion of instrument.
    (a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be brought by (i) the issuer or acceptor of the instrument or (ii) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.
    (b) In an action under subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiff's interest in the instrument.
    (c) A representative, other than a depositary bank, that has in good faith dealt with an instrument or its proceeds on behalf of one who was not the person entitled to enforce the instrument is not liable in conversion to that person beyond the amount of any proceeds that it has not paid out.
(Source: P.A. 87-582; 87-1135.)


 
    (810 ILCS 5/Art. 3 Pt. 5 heading)
PART 5. DISHONOR

    
Notes of Decisions
Cited in 18 cases, 1993–2020 · leading case: Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005).
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Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005). · cites it 2× “converted if it is taken by transfer, other than negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.”
Great Lakes Higher Educ. Corp. v. Austin Bank of Chicago, 837 F. Supp. 892 (N.D. Ill. 1993). · cites it 3× “n Corporation (“Great Lakes”) and First Wisconsin National Bank of Milwaukee (“First Wisconsin”) filed a five count complaint against Defendant Austin Bank of Chicago (“Austin”) alleging breach of warranty (810 *894 ILCS 5/4-207), negligence in the presentment of certain checks…”
Flynn v. Maschmeyer, 2020 IL App (1st) 190784 (Ill. App. Ct. 2020). “¶ 18 Finally, count VI 3 was a derivative claim on behalf of CRDG against Bank of America and was for conversion pursuant to section 3-420 of the Uniform Commercial Code (UCC) (810 ILCS 5/3-420 (West 2012)). Count VI alleged that, between September 12, 2011, and May 28, 2014,…”
PSI Resources, LLC v. MB Fin. Bank, 2016 IL App (1st) 152204 (Ill. App. Ct. 2016). “The bank, on the other hand, argued that the corporation’s claim, properly characterized, was either a UCC claim for conversion of a negotiable instrument (810 ILCS 5/3-420(a) (West 1994)) or a UCC claim for improper payment (810 ILCS 5/4-401(a) (West 1994)), both of which are…”
Am. Nat. Ins. Co. v. CITIBANK, NA, 543 F.3d 907 (7th Cir. 2008). “Underwriters filed suit against Citibank for conversion of the checks under 810 ILCS 5/3-420, the Illinois version of Uniform Commercial Code § 3-420, which provides the rule for dealing with the conversion of negotiable instruments.”
Barber v. First Nat'l Bank of Chillicothe (In Re Ostrom-Martin, Inc.), 188 B.R. 245 (Bankr. C.D. Ill. 1995). “” 810 ILCS 5/3-420, Official Comment 1. The new version of the Code thus supports Austin’s contention that a drawee, like a drawer, has no valuable possessory interest in the checks and may not bring a claim for conversion.”
Heartland Bank & Trust Co. v. The Leiter Grp., 2014 IL App (3d) 130498 (Ill. App. Ct. 2014). “810 ILCS 5/3-420(a) (West 2010). The elements of conversion include: (1) an unauthorized and wrongful assumption of control, dominion, or ownership by a person over the personalty of another; (2) his right to the property; (3) his right to immediate, absolute and unconditional…”
Henry v. Waller, 2012 IL App (1st) 102068 (Ill. App. Ct. 2012). “Henry also sued the bank under section 3-420 of the UCC (810 ILCS 5/3-420 (West 2006)), alleging that the endorsements in her name on the settlement checks were unauthorized and that the bank was liable for conversion because it accepted the checks for deposit over unauthorized…”
Young Soon Kim v. TD Ameritrade, Inc., 891 F. Supp. 2d 936 (N.D. Ill. 2012). “Defendant next argues that plaintiffs’ claim for conversion under 810 ILCS 5/3-420 (Count I) fails to state a claim upon which relief can be granted.”
Heartland Bank & Trust Co. v. Leiter Grp., 2014 IL App (3d) 130498 (Ill. App. Ct. 2014). “810 ILCS 5/3-420(a) (West 2010). The elements of conversion include: (1) an unauthorized and wrongful assumption of control, dominion, or ownership by a person over the personalty of another; (2) his right to the property; (3) his right to immediate, absolute and unconditional…”
Nat'l Accident Ins. Underwriters, Inc. v. Citibank, F.S.B., 533 F. Supp. 2d 784 (N.D. Ill. 2007). · cites it 2× “” 810 ILCS 5/3-420(a) (1992). “To establish that a financial institution is liable for conversion under Illinois law, the plaintiff must establish (1) that she owned, held an interest in, or had the right to possess a negotiable instrument; (2) that someone forged or without…”
Cont'l Cas. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 2002). · cites it 5× “limitations period found in section 4-111, which applies to an improper payment claim under UCC section 4-401(a) (810 ILCS 5/4-401(a) (West 1994)); (2) its breach of contract claim is not time-barred by the three-year limitations period found in section 3-118(g) (810 ILCS…”
Show all 18 citing cases →
— 810 ILCS 5/3-420(a) — 11 cases
Dr. Linda A. Rodrigue v. Olin Employees Credit Union, Cross-Appellee, 406 F.3d 434 (7th Cir. 2005). “converted if it is taken by transfer, other than negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment.”
PSI Resources, LLC v. MB Fin. Bank, 2016 IL App (1st) 152204 (Ill. App. Ct. 2016). “The bank, on the other hand, argued that the corporation’s claim, properly characterized, was either a UCC claim for conversion of a negotiable instrument (810 ILCS 5/3-420(a) (West 1994)) or a UCC claim for improper payment (810 ILCS 5/4-401(a) (West 1994)), both of which are…”
Heartland Bank & Trust Co. v. The Leiter Grp., 2014 IL App (3d) 130498 (Ill. App. Ct. 2014). “810 ILCS 5/3-420(a) (West 2010). The elements of conversion include: (1) an unauthorized and wrongful assumption of control, dominion, or ownership by a person over the personalty of another; (2) his right to the property; (3) his right to immediate, absolute and unconditional…”
Heartland Bank & Trust Co. v. Leiter Grp., 2014 IL App (3d) 130498 (Ill. App. Ct. 2014). “810 ILCS 5/3-420(a) (West 2010). The elements of conversion include: (1) an unauthorized and wrongful assumption of control, dominion, or ownership by a person over the personalty of another; (2) his right to the property; (3) his right to immediate, absolute and unconditional…”
Nat'l Accident Ins. Underwriters, Inc. v. Citibank, F.S.B., 533 F. Supp. 2d 784 (N.D. Ill. 2007). “” 810 ILCS 5/3-420(a) (1992). “To establish that a financial institution is liable for conversion under Illinois law, the plaintiff must establish (1) that she owned, held an interest in, or had the right to possess a negotiable instrument; (2) that someone forged or without…”
— 810 ILCS 5/3-420(a)(i) — 1 case
Cont'l Cas. Co. v. Am. Nat'l Bank & Trust Co. (Ill. App. Ct. 2002). “limitations period found in section 4-111, which applies to an improper payment claim under UCC section 4-401(a) (810 ILCS 5/4-401(a) (West 1994)); (2) its breach of contract claim is not time-barred by the three-year limitations period found in section 3-118(g) (810 ILCS…”
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