§3-420. Conversion of instrument

Link to law: http://legislature.vermont.gov/statutes/section/09A/003/00420
Published: 2015

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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.

(c) 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. (Added 1993, No. 158 (Adj.

Sess.), § 12, eff. Jan. 1, 1995.)