The Vermont Statutes Online
Uniform Commercial Code
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) 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.
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. (Added 1993, No. 158 (Adj.
Sess.), § 12, eff. Jan. 1, 1995.)