reglab/statecodes huggingface dataset:
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-304. Overdue instrument

30-3-304. Overdue instrument.
(1) An instrument payable on demand becomes overdue at the earliest of the following times:
(a) on the day after the day demand for payment is duly made;
(b) if the instrument is a check, 90 days after its date; or
(c) if the instrument is not a check, when the instrument has been outstanding for a period of time after its date that is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and trade usage.
(2) With respect to an instrument payable at a definite time, the following rules apply:
(a) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured.
(b) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date.
(c) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.
(3) Unless the due date of principal has been accelerated, an instrument does not become overdue if there is a default in payment of interest but no default in payment of principal.
History: En. Sec. 3-304, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-304; amd. Sec. 117, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-305. Defenses and claims in recoupment

30-3-305. Defenses and claims in recoupment.
(1) Except as stated in subsection (2), the right to enforce the obligation of a party to pay the instrument is subject to the following:
(a) A defense of the obligor based on:
(i) infancy of the obligor to the extent that it is a defense to a simple contract;
(ii) duress, lack of legal capacity, or illegality of the transaction that nullifies the obligation of the obligor;
(iii) fraud that induced the obligor to sign the instrument with neither knowledge nor reasonable opportunity to learn of its character or its essential terms; or
(iv) discharge of the obligor in insolvency proceedings.
(b) A defense of the obligor stated in another section of this chapter or a defense of the obligor that would be available if the person entitled to enforce the instrument were enforcing a right to payment under a simple contract.
(c) A claim in recoupment of the obligor against the original payee of the instrument if the claim arose from the transaction that gave rise to the instrument. The claim of the obligor may be asserted against a transferee of the instrument only to reduce the amount owing on the instrument at the time the action is brought.
(2) The right of a holder in due course to enforce the obligation of a party to pay the instrument is subject to defenses of the obligor stated in subsection (1)(a) but is not subject to defenses of the obligor stated in subsection (1)(b) or claims in recoupment stated in subsection (1)(c) against a person other than the holder.
(3) Except as stated in subsection (4), in an action to enforce the obligation of a party to pay the instrument, the obligor may not assert against the person entitled to enforce the instrument a defense, claim in recoupment, or claim to the instrument (30-3-306) of another person, but the other person's claim to the instrument may be asserted by the obligor if the other person is joined in the action and personally asserts the claim against the person entitled to enforce the instrument. An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument.
(4) In an action to enforce the obligation of an accommodation party to pay an instrument, the accommodation party may assert against the person entitled to enforce the instrument any defense or claim in recoupment under subsection (1) that the accommodated party could assert against the person entitled to enforce the instrument, except the defenses of discharge in insolvency proceedings, infancy, or lack of legal capacity.
History: En. Sec. 3-305, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-305; amd. Sec. 118, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-306. Claims to an instrument

30-3-306. Claims to an instrument.
A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim to rescind a negotiation and to recover the instrument or its proceeds. A person having rights of a holder in due course takes free of the claim to the instrument.
History: En. Sec. 3-306, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-306; amd. Sec. 119, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-307. Proof of signatures and status as holder in due course

30-3-307. Proof of signatures and status as holder in due course.
(1) In an action with respect to an instrument, the authenticity of and authority to make each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person pursuant to 30-3-403(1).
(2) If the validity of signatures is admitted or proved and there is compliance with subsection (1), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under 30-3-301, unless the defendant proves a defense or claim in recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is subject to the defense or claim except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course that are not subject to the defense or claim.
History: En. Sec. 3-307, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-307; amd. Sec. 121, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-308. Notice of breach of fiduciary duty

30-3-308. Notice of breach of fiduciary duty.
(1) This section applies if an instrument is taken from a fiduciary for payment or collection or for value, the taker has knowledge of the fiduciary status of the fiduciary, and the represented person makes a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is a breach of fiduciary duty. Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the represented person. "Fiduciary" means an agent, trustee, partner, corporation officer or director, or other representative owing a fiduciary duty with respect to the instrument. "Represented person" means the principal, beneficiary, partnership, corporation, or other person to whom the duty is owed.
(2) If the instrument is payable to the fiduciary, as such, or to the represented person, the taker has notice of the breach of fiduciary duty if the instrument is:
(a) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;
(b) taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or
(c) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
(3) If the instrument is made or drawn by the fiduciary, as such, payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty.
(4) If the instrument is made or drawn by or on behalf of the represented person to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is:
(a) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary;
(b) taken in a transaction known by the taker to be for the personal benefit of the fiduciary; or
(c) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.
History: En. Sec. 120, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-309. Enforcement of lost, destroyed, or stolen instrument

30-3-309. Enforcement of lost, destroyed, or stolen instrument.
(1) A person not in possession of an instrument is entitled to enforce the instrument if:
(a) that person was in rightful possession of the instrument and entitled to enforce it when loss of possession occurred;
(b) the loss of possession was not the result of a voluntary transfer by that person or a lawful seizure; and
(c) that person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
(2) A person seeking enforcement of an instrument pursuant to subsection (1) shall prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, 30-3-307 applies to the case as though the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.
History: En. Sec. 122, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-310. Effect of instrument on obligation for which taken

30-3-310. Effect of instrument on obligation for which taken.
(1) Unless otherwise agreed, if a certified check, cashier's check, or teller's check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an indorser of the instrument.
(2) Unless otherwise agreed and except as provided in subsection (1), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken.
(3) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.
(4) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment.
(5) If the check or note is dishonored and the obligee of the obligation for which the instrument was taken has possession of the instrument, the obligee may enforce either the instrument or the obligation. In the case of an instrument of a third person that is negotiated to the obligee by the obligor, discharge of the obligor on the instrument also discharges the obligation.
(6) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent the obligation is suspended. If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen, or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent, the obligee's rights against the obligor are limited to enforcement of the instrument.
(7) If an instrument other than one described in subsection (1) or (2) is taken for an obligation, the effect is:
(a) that stated in subsection (1) if the instrument is one on which a bank is liable as maker or acceptor; or
(b) that stated in subsection (2) in any other case.
History: En. Sec. 123, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 3. Rights of a Holder › 30-3-311. Accord and satisfaction by use of instrument

30-3-311. Accord and satisfaction by use of instrument.
(1) This section applies if a person against whom a claim is asserted proves that:
(a) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim;
(b) the amount of the claim was unliquidated or subject to a bona fide dispute; and
(c) the claimant obtained payment of the instrument.
(2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.
(3) Subject to subsection (4), a claim is not discharged under subsection (2) if the claimant is an organization and proves that within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place and the instrument or accompanying communication was not received by that designated person, office, or place.
(4) Notwithstanding subsection (3), a claim is discharged under subsection (2) if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, an agent of the claimant having direct responsibility with respect to the disputed obligation knew that the instrument was tendered in full satisfaction of the claim or received the instrument and any accompanying written communication.
History: En. Sec. 124, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-401. Signature

30-3-401. Signature.
(1) A person is not liable on an instrument unless:
(a) the person signed the instrument; or
(b) the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under 30-3-403.
(2) A signature is made:
(a) manually or by means of a device or machine; and
(b) by use of any name, including any trade or assumed name, or by any word, mark, or symbol executed or adopted by a person with present intention to authenticate a writing.
History: En. Sec. 3-401, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-401; amd. Sec. 125, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-402. Repealed

30-3-402. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-402, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-402.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-403. Signature by representative

30-3-403. Signature by representative.
(1) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the "authorized signature of the represented person" and the represented person is liable on the instrument, whether or not identified in the instrument.
(2) If a representative signs the name of the representative to an instrument and that signature is an authorized signature of the represented person, the following rules apply:
(a) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.
(b) Subject to subsection (3), if the form of the signature does not show unambiguously that the signature is made in a representative capacity, or the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties to the instrument did not intend the representative to be liable on the instrument.
(3) If a representative signs the name of the representative as drawer of a check without indication of the representative's status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.
History: En. Sec. 3-403, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-403; amd. Sec. 126, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-404. Unauthorized signatures

30-3-404. Unauthorized signatures.
(1) Unless otherwise provided in this chapter, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An unauthorized signature may be ratified for all purposes of this chapter.
(2) If the signature of more than one person is required to constitute the authorized signature of an organization, the signature of the organization is unauthorized if one of the required signatures is missing.
(3) The civil or criminal liability of a person who makes an unauthorized signature is not affected by any provision of this chapter that makes the unauthorized signature effective for the purposes of this chapter.
History: En. Sec. 3-404, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-404; amd. Sec. 127, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-405. Impostors -- fictitious payees

30-3-405. Impostors -- fictitious payees.
(1) If an impostor by use of the mails or otherwise induces the maker or drawer of an instrument to issue the instrument to the impostor or to a person acting in concert with the impostor by impersonating the payee of the instrument or a person authorized to act for the payee, an indorsement of the instrument by any person in the name of the payee is effective as the indorsement of the payee in favor of any person who in good faith pays the instrument or takes it for value or for collection.
(2) If a person whose intent determines to whom an instrument is payable (30-3-126(1) or (2)) does not intend the person identified as payee to have any interest in the instrument or if the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special indorsement:
(a) Any person in possession of the instrument is its holder.
(b) An indorsement by any person in the name of the payee stated in the instrument is effective as the indorsement of the payee in favor of any person who in good faith pays the instrument or takes it for value or for collection.
(3) Under subsection (1) or (2), an indorsement is made in the name of a payee if:
(a) it is made in a name substantially similar to that of the payee; or
(b) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee.
(4) With respect to an instrument to which subsection (1) or (2) applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
History: En. Sec. 3-405, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-405; amd. Sec. 128, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-406. Negligence contributing to forged signature or alteration of instrument

30-3-406. Negligence contributing to forged signature or alteration of instrument.
(1) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who in good faith pays the instrument or takes it for value.
(2) If the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.
(3) Under subsection (1), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (2), the burden of proving failure to exercise ordinary care is on the person precluded.
History: En. Sec. 3-406, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-406; amd. Sec. 130, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-407. Alteration

30-3-407. Alteration.
(1) "Alteration" means:
(a) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party to the instrument; or
(b) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of any party to the instrument.
(2) Except as provided in subsection (3), an alteration fraudulently made discharges any party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges any party, and the instrument may be enforced according to its original terms.
(3) A person paying a fraudulently altered instrument or taking it for value in good faith and without notice of the alteration may enforce rights with respect to the instrument:
(a) according to its original terms; or
(b) in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.
History: En. Sec. 3-407, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-407; amd. Sec. 131, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-408. Repealed

30-3-408. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-408, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-408.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-409. Drawee not liable on unaccepted draft

30-3-409. Drawee not liable on unaccepted draft.
A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.
History: En. Sec. 3-409, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-409; amd. Sec. 132, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-410. Acceptance of draft -- certified check

30-3-410. Acceptance of draft -- certified check.
(1) "Acceptance" means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee's signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.
(2) A draft may be accepted although it has not been signed by the drawer, is otherwise incomplete, is overdue, or has been dishonored.
(3) If a draft is payable at a fixed period after sight and the acceptor fails to date the acceptance, the holder may complete the acceptance by supplying a date in good faith.
(4) "Certified check" means a check accepted by the bank on which it is drawn. Acceptance may be made as stated in subsection (1) or by a writing on the check that indicates that the check is certified. The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check.
History: En. Sec. 3-410, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-410; amd. Sec. 133, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-411. Repealed

30-3-411. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-411, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-411.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-412. Acceptance varying draft

30-3-412. Acceptance varying draft.
(1) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance.
(2) The terms of the draft are not varied by an acceptance to pay at a particular bank or place in the United States, unless the acceptance states that the draft is to be paid only at that bank or place.
(3) If the holder assents to an acceptance varying the terms of a draft, the obligation of each drawer and indorser that does not expressly assent to the acceptance is discharged.
History: En. Sec. 3-412, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-412; amd. Sec. 134, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-413. Obligation of maker

30-3-413. Obligation of maker.
(1) A maker of a note is obliged to pay the note:
(a) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder; or
(b) if the maker signed an incomplete instrument, according to its terms when completed as stated in 30-3-115 and 30-3-407.
(2) The obligation is owed to a person entitled to enforce the note or to an indorser that paid the note pursuant to 30-3-414.
History: En. Sec. 3-413, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-413; amd. Sec. 136, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-414. Obligation of indorser

30-3-414. Obligation of indorser.
(1) Subject to subsections (2) through (4) and to 30-3-415(4), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument according to the terms of the instrument at the time it was indorsed or if the indorser indorsed an incomplete instrument, according to its terms when completed as stated in 30-3-115 and 30-3-407. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser that paid the instrument pursuant to this section.
(2) If an indorsement states that it is made "without recourse" or otherwise disclaims liability of the indorser, the indorser is not liable under subsection (1) to pay the instrument.
(3) If notice of dishonor of an instrument is required by 30-3-508 and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under subsection (1) is discharged.
(4) If a draft is accepted by a bank after an indorsement is made and the acceptor dishonors the draft, the indorser is not liable under subsection (1) to pay the instrument.
(5) If an indorser of a check is liable under subsection (1) and the check is not presented for payment or given to a depositary bank for collection within 30 days after the day the indorsement was made, the liability of the indorser under subsection (1) is discharged.
History: En. Sec. 3-414, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-414; amd. Sec. 139, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-415. Instruments signed for accommodation

30-3-415. Instruments signed for accommodation.
(1) If an instrument is issued for value given for the benefit of a party to the instrument ("accommodated party") and another party to the instrument ("accommodation party") signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party "for accommodation".
(2) An accommodation party may sign the instrument as maker, drawer, acceptor, or indorser and, subject to subsection (4), is obliged to pay the instrument in the capacity in which the accommodation party signs. The obligation of an accommodation party may be enforced notwithstanding any statute of frauds and regardless of whether the accommodation party receives consideration for the accommodation.
(3) A person signing an instrument is presumed to be an accommodation party and there is notice that the instrument is signed for accommodation if the signature is an anomalous indorsement or is accompanied by words indicating that the signer is acting as surety or guarantor with respect to the obligation of another party to the instrument. Except as provided in 30-3-607, the obligation of an accommodation party to pay the instrument is not affected by the fact that the person enforcing the obligation had notice when the instrument was taken by that person that the accommodation party signed the instrument for accommodation.
(4) If the signature of a party to an instrument is accompanied by words indicating unambiguously that the party is guaranteeing collection rather than payment of the obligation of another party to the instrument, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument only if:
(a) execution of judgment against the other party has been returned unsatisfied;
(b) the other party is insolvent or in an insolvency proceeding;
(c) the other party cannot be served with process; or
(d) it is otherwise apparent that payment cannot be obtained from the party whose obligation is guaranteed.
(5) An accommodation party that pays the instrument is entitled to reimbursement from the accommodated party and is entitled to enforce the instrument against the accommodated party. An accommodated party that pays the instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party.
History: En. Sec. 3-415, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-415; amd. Sec. 140, Ch. 410, L. 1991; amd. Sec. 53, Ch. 10, L. 1993.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-416. Repealed

30-3-416. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-416, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-416.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-417. Transfer warranties

30-3-417. Transfer warranties.
(1) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:
(a) the warrantor is a person entitled to enforce the instrument;
(b) all signatures on the instrument are authentic and authorized;
(c) the instrument has not been altered;
(d) the instrument is not subject to a defense or claim in recoupment (30-3-305(1)) of any party that can be asserted against the warrantor; and
(e) the warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer.
(2) A person to whom the warranties under subsection (1) are made and who took the instrument in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the instrument plus expenses and loss of interest incurred as a result of the breach.
(3) The warranties stated in subsection (1) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within 30 days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.
(4) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.
History: En. Sec. 3-417, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-417; amd. Sec. 141, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-418. Repealed

30-3-418. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-418, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-418.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-419. Conversion of instrument

30-3-419. Conversion of instrument.
(1) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if the instrument lacks an indorsement necessary for negotiation and it is purchased or taken for collection or the drawee takes the instrument and makes payment to a person not entitled to receive payment. An action for conversion of an instrument may not be brought by:
(a) the maker, drawer, or acceptor of an instrument; or
(b) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or copayee.
(2) In an action under subsection (1), 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, 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.
History: En. Sec. 3-419, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-419; amd. Sec. 144, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-420. Employer responsibility for fraudulent indorsement by employee

30-3-420. Employer responsibility for fraudulent indorsement by employee.
(1) This section applies to fraudulent indorsements of instruments with respect to which an employer has entrusted an employee with responsibility as part of the employee's duties. The following definitions apply to this section:
(a) "Employee" includes, in addition to an employee of an employer, an independent contractor and employee of an independent contractor retained by the employer.
(b) "Fraudulent indorsement" means:
(i) in the case of an instrument payable to the employer, a forged indorsement purporting to be that of the employer; or
(ii) in the case of an instrument with respect to which the employer is drawer or maker, a forged indorsement purporting to be that of the person identified as payee.
(c) (i) "Responsibility" with respect to instruments means authority to:
(A) sign or indorse instruments on behalf of the employer;
(B) process instruments received by the employer for bookkeeping purposes, for deposit to an account, or for other disposition;
(C) prepare or process instruments for issue in the name of the employer;
(D) supply information determining the names or addresses of payees of instruments to be issued in the name of the employer;
(E) control the disposition of instruments to be issued in the name of the employer; or
(F) otherwise act with respect to instruments in a responsible capacity.
(ii) The term does not include the assignment of duties that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.
(2) For purposes of determining the rights and liabilities of a person who in good faith pays an instrument or takes it for value or for collection, if an employee entrusted with responsibility with respect to the instrument or a person acting in concert with the employee makes a fraudulent indorsement to the instrument, the indorsement is effective as the indorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.
(3) Under subsection (2), an indorsement is made in the name of the person to whom an instrument is payable if:
(a) it is made in a name substantially similar to the name of that person; or
(b) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person.
History: En. Sec. 129, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-421. Refusal to pay cashier's checks, teller's checks, and certified checks

30-3-421. Refusal to pay cashier's checks, teller's checks, and certified checks.
(1) In this section, "obligated bank" means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer.
(2) If the obligated bank wrongfully refuses to pay a cashier's check or certified check, stops payment of a teller's check, or refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.
(3) Expenses or consequential damages under subsection (2) are not recoverable if the refusal of the obligated bank to pay occurs because:
(a) the bank suspends payments;
(b) the obligated bank is asserting a claim or defense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument;
(c) the obligated bank has a reasonable doubt whether the person demanding payment is the person entitled to enforce the instrument; or
(d) payment is prohibited by law.
History: En. Sec. 135, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-422. Obligation of acceptor

30-3-422. Obligation of acceptor.
(1) An acceptor of a draft is obliged to pay the draft:
(a) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable "as originally drawn" or equivalent terms;
(b) if the acceptance varies the terms of the draft, according to the terms of the draft as varied; or
(c) if the acceptance is of a draft that is an incomplete instrument, according to its terms when completed as stated in 30-3-115 and 30-3-407.
(2) The obligation is owed to a person entitled to enforce the draft or to the drawer or an indorser that paid the draft pursuant to 30-3-423 or 30-3-414.
(3) If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount. The obligation of the acceptor is the amount of the instrument at the time it was negotiated to the holder in due course if:
(a) the certification or acceptance does not state an amount;
(b) the instrument is subsequently altered by raising its amount; and
(c) the instrument is then negotiated to a holder in due course.
History: En. Sec. 137, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-423. Obligation of drawer

30-3-423. Obligation of drawer.
(1) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft:
(a) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder; or
(b) if the drawer signed an incomplete instrument, according to its terms when completed as stated in 30-3-115 and 30-3-407.
(2) The obligation is owed to a person entitled to enforce the draft or to an indorser that paid the draft pursuant to 30-3-414.
(3) If a draft is accepted by a bank and the acceptor dishonors the draft, the drawer has no obligation to pay the draft because of the dishonor, regardless of when or by whom acceptance was obtained.
(4) If a draft is accepted and the acceptor is not a bank, the obligation of the drawer to pay the draft if the draft is dishonored by the acceptor is the same as the obligation of an indorser stated in 30-3-414(1) and (3).
(5) Words in a draft indicating that the draft is drawn without recourse are effective to disclaim all liability of the drawer to pay the draft if the draft is not a check, but they are not effective to disclaim the obligation stated in subsection (1) if the draft is a check.
(6) The drawer to the extent deprived of funds may discharge its obligation to pay the check by assigning to the person entitled to enforce the check the rights of the drawer against the drawee with respect to the funds if:
(a) a check is not presented for payment or given to a depositary bank for collection within 30 days after its date;
(b) the drawee suspends payments after expiration of the 30-day period without paying the check; and
(c) because of the suspension of payments, the drawer is deprived of funds maintained with the drawee to cover payment of the check.
History: En. Sec. 138, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 4. Liability of Parties › 30-3-425. Payment or acceptance by mistake

30-3-425. Payment or acceptance by mistake.
(1) Except as provided in subsection (3), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that payment of the draft had not been stopped under 30-4-403, the signature of the purported drawer of the draft was authorized, or the balance in the drawer's account with the drawee represented available funds, the drawee may recover the amount paid for the person to whom or for whose benefit payment was made or, in the case of acceptance, may revoke the acceptance. Rights of the drawee under this subsection are not affected by failure of the drawee to exercise ordinary care in paying or accepting the draft.
(2) Except as provided in subsection (3), if an instrument has been paid or accepted by mistake and the case is not covered by subsection (1), the person paying or accepting may recover the amount paid or revoke acceptance to the extent allowed by the law governing mistake and restitution.
(3) The remedies provided by subsection (1) or (2) may not be asserted against a person who took the instrument in good faith and for value. This subsection does not limit remedies provided by 30-3-424 for breach of warranty.
History: En. Sec. 143, Ch. 410, L. 1991.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 5. Presentment, Notice of Dishonor, and Protest › 30-3-501. Repealed

30-3-501. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-501, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-501.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 5. Presentment, Notice of Dishonor, and Protest › 30-3-502. Repealed

30-3-502. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-502, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-502.
2023 Montana Code Annotated › Title 30. Trade and Commerce › Chapter 3. Uniform Commercial Code Negotiable Instruments › Part 5. Presentment, Notice of Dishonor, and Protest › 30-3-503. Repealed

30-3-503. Repealed.
Sec. 230, Ch. 410, L. 1991.
History: En. Sec. 3-503, Ch. 264, L. 1963; R.C.M. 1947, 87A-3-503.