(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.
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