(1) 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 copayee.
(2) In an action under subsection (1) of this section, 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.
(3) A representative, other than a depositary bank, who 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.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
Was this helpful?
Response sent, thank you
Welcome to FindLaw's Cases & Codes
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.