reglab/statecodes huggingface dataset:
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter II - Collection of Items; Depository and Collecting Banks (§§ 851 — 866) › § 863 - Medium and time of settlement by bank

(a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearing-house rules, and the like, or agreement. In the absence of such prescription:
(1) the medium of settlement is cash or credit to an account in a Federal Reserve bank of or specified by the person to receive settlement, and
(2) the time of settlement, is:
(A) With respect to tender of settlement by cash, a cashier’s check, or teller’s check, when the cash or check is sent or delivered;
(B) with respect to tender of settlement by credit in an account in a Federal Reserve bank, when the credit is made;
(C) with respect to tender of settlement by a credit or debit to an account in a bank, when the credit or debit is made or, in the case of tender of settlement by authority to charge an account, when the authority is sent or delivered, or
(D) with respect to tender of settlement by a funds transfer, when payment is made pursuant to § 1136(a) of this title to the person receiving settlement.
(b) If the tender of settlement is not by a medium authorized by subsection (a) of this section or the time of settlement is not fixed by subsection (a) of this section, no settlement occurs until the tender of settlement is accepted by the person receiving settlement.
(c) If settlement for an item is made by cashier’s check or teller’s check and the person receiving settlement, before its midnight deadline:
(1) Presents or forwards the check for collection, settlement is final when the check is finally paid, or
(2) fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.
(d) If settlement for an item is made by giving authority to charge the account of the bank giving settlement in the bank receiving settlement, settlement is final when the charge is made by the bank receiving settlement if there are funds available in the account for the amount of the item.
History —Aug. 17, 1995, No. 208, § 3-213; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter II - Collection of Items; Depository and Collecting Banks (§§ 851 — 866) › § 864 - Right of charge-back or refund; liability of collecting bank; return of item

(a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer’s account, or obtain refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank’s midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge back, and obtain refund terminate if and when a settlement for the item received by the bank if or becomes final.
(b) A collecting bank returns an item when it is sent or delivered to the bank’s customer or transferor or pursuant to its instructions.
(c) A deposit[o]ry bank that is also the payor bank may charge back the amount of an item to its customer’s account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (§ 901 of this title).
(d) The right to charge back is not affected by:
(1) Previous use of a credit given for the item, or
(2) failure by any bank to exercise ordinary care with respect to the item, but a bank so failing remains liable.
(e) A failure to charge back or claim refund does not affect other rights of the bank against the customer or any other party.
(f) If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any charge-back or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.
History —Aug. 17, 1995, No. 208, § 3-214; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter II - Collection of Items; Depository and Collecting Banks (§§ 851 — 866) › § 865 - Final payment of item by payor bank; when provisional debits and credits become final; when certain credits become available for withdrawal

(a) An item is finally paid by a payor bank when the bank has first done any of the following:
(1) Paid the item in cash;
(2) settled for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement, or
(3) made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearing-house rule, or agreement.
(b) If provisional settlement for an item does not become final, the item is not finally paid.
(c) If provisional settlement for an item between the presenting and payor banks is made through a clearing-house or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the item by the payor bank.
(d) If a collecting bank receives a settlement for an item which is or becomes final, the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.
(e) Subject to: (i) any applicable law stating a time for availability of funds, and (ii) any right of the bank to apply the credit to an obligation of the customer, credit given by a bank in a customer’s account becomes available for withdrawal as of right:
(1) If the bank has received a provisional settlement for the item, when the settlement becomes final and the bank has had a reasonable time to receive return of the item and the item has not been received within that time.
(2) If the bank is both the deposit[o]ry bank and the payor bank, and the item is finally paid, at the opening of the bank’s second banking day following receipt of the item.
(f) Subject to applicable law stating a time for availability of funds and any right of a bank to apply a deposit to an obligation of the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank’s next banking day after receipt of the deposit.
History —Aug. 17, 1995, No. 208, § 3-215; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter II - Collection of Items; Depository and Collecting Banks (§§ 851 — 866) › § 866 - Insolvency and preference

(a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank’s customer.
(b) If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.
(c) If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement’s becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.
(d) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against the [payor] bank.
History —Aug. 17, 1995, No. 208, § 3-216; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter III - Collection of Items; Payor Banks (§§ 901 — 903) › § 901 - Deferred posting; recovery of payment by return of items; time of dishonor; return of items by payor bank

(a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it:
(1) Returns the item, or
(2) sends written notice of dishonor or nonpayment if the item is unavailable for return.
(b) If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection (a) of this section.
(c) Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.
(d) An item is returned:
(1) As to an item presented through a clearing house, when it is delivered to the presenting or last collecting bank or to the clearing house or is sent or delivered in accordance with clearing-house rules, or
(2) in all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to instructions.
History —Aug. 17, 1995, No. 208, § 3-301; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter III - Collection of Items; Payor Banks (§§ 901 — 903) › § 902 - Payor bank’s responsibility for late return of item

(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:
(1) A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the deposit[o]ry bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the deposit[o]ry bank, does not pay or return the item or send notice of dishonor until after its midnight deadline, or
(2) any other properly payable item unless, within the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.
(b) The liability of a payor bank to pay an item pursuant to subsection (a) of this section is subject to defenses based on breach of a presentment warranty (§ 858 of this title) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.
History —Aug. 17, 1995, No. 208, § 3-302; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter III - Collection of Items; Payor Banks (§§ 901 — 903) › § 903 - When items subject to notice, stop-payment order, legal process, or setoff; order in which items may be charged or certified

(a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank’s right or duty to pay an item or to charge its customer’s account for the item if the knowledge, notice, stop-payment order, or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:
(1) The bank accepts or certifies the item;
(2) the bank pays the item in cash;
(3) the bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement;
(4) the bank becomes accountable for the amount of the item under § 902 of this title dealing with the payor bank’s responsibility for late return of items, or
(5) with respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.
(b) Subject to subsection (a) of this section, items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.
History —Aug. 17, 1995, No. 208, § 3-303; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 951 - When bank may charge customer’s account

(a) A bank may charge against the account of a customer an item that is properly payable from the account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.
(b) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefitted from the proceeds of the item.
(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in § 953(b) of this title for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in § 903 of this title. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under § 952 of this title.
(d) A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to:
(1) The original terms of the altered item, or
(2) the terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.
History —Aug. 17, 1995, No. 208, § 3-401; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 952 - Bank’s liability to customer for wrongful dishonor; time of determining insufficiency of account

(a) Except as otherwise provided in §§ 801-1004 of this title, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.
(b) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.
(c) A payor bank’s determination of the customer’s account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank’s decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.
History —Aug. 17, 1995, No. 208, § 3-402; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 953 - Customer’s right to stop payment; burden of proof of loss

(a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer’s account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in § 903 of this title. If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account.
(b) A stop-payment order is effective for six (6) months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a writing given to the bank within a period during which the stop-payment order is effective.
(c) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a stop-payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop-payment order may include damages for dishonor of subsequent items under § 952 of this title.
History —Aug. 17, 1995, No. 208, § 3-403; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 954 - Bank not obliged to pay check more than six months old

A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six (6) months after its date, but it may charge its customer’s account for a payment made thereafter in good faith.
History —Aug. 17, 1995, No. 208, § 3-404; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 955 - Death or incompetence of customer

(a) A payor or collecting bank’s authority to accept, pay, collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes the authority to accept, pay, collect, or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it.
(b) Even with knowledge, a bank may for 10 days after the date of death pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account.
History —Aug. 17, 1995, No. 208, § 3-405; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter IV - Relationship Between Payor Bank And Its Customer (§§ 951 — 957) › § 957 - Payor bank’s right to subrogation on improper payment

If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank is subrogated to the rights:
(1) Of any holder in due course on the item against the drawer or maker;
(2) of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose, and
(3) of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the item arose.
History —Aug. 17, 1995, No. 208, § 3-407; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter V - Collection of Documentary Drafts (§§ 1001 — 1004) › § 1001 - Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor

A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right.
History —Aug. 17, 1995, No. 208, § 3-501; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter V - Collection of Documentary Drafts (§§ 1001 — 1004) › § 1002 - Presentment of “on arrival” drafts

If a draft or the relevant instructions require presentment “on arrival”, “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrived is not dishonor; the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods.
History —Aug. 17, 1995, No. 208, § 3-502; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter V - Collection of Documentary Drafts (§§ 1001 — 1004) › § 1003 - Responsibility of presenting bank for documents and goods; report of reasons for dishonor; referee in case of need

Unless otherwise instructed and unless otherwise indicated by the law pertaining to documentary drafts, a bank presenting a documentary draft:
(1) Must deliver the documents to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on payment, and
(2) upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee’s services, it must use diligence and good faith to ascertain the reasons for dishonor, must notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and must request instructions.
However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.
History —Aug. 17, 1995, No. 208, § 3-503; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 45 - Bank Deposits and Collections (§§ 801 — 1004) › Subchapter V - Collection of Documentary Drafts (§§ 1001 — 1004) › § 1004 - Privilege of presenting bank to deal with goods; security interest for expenses

(a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal with the goods in any reasonable manner.
(b) For its reasonable expenses incurred by action under subsection (a) of this section the presenting bank has a lien upon the goods or their proceeds. No filing is required to perfect such a lien., which may be foreclosed in the same manner as an unpaid seller’s lien.
History —Aug. 17, 1995, No. 208, § 3-504; Aug. 31, 1996, No. 176, § 3.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1021 - Title

Sections 1021-1167 of this title may be cited as Chapter 47: Funds Transfers.
History —Aug. 17, 1995, No. 208, § 4-101; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1022 - Subject matter

Except as otherwise provided in § 1028 of this title, §§ 1021-1167 of this title apply to funds transfers defined in § 1024 of this title.
History —Aug. 17, 1995, No. 208, § 4-102; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1023 - Payment order—Definitions

(a) In §§ 1021-1167 of this title:
(1) Payment order. — Means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if:
(A) The instruction does not state a condition to payment to the beneficiary other than time of payment;
(B) the receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender, and
(C) the instruction is transmitted by the sender directly to the receiving bank or to an agent, funds-transfer system, or communication system for transmittal to the receiving bank.
(2) Beneficiary. — Means the person to be paid by the beneficiary’s bank.
(3) Beneficiary’s bank. — Means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account.
(4) Receiving bank. — Means the bank to which the sender’s instruction is addressed.
(5) Sender. — Means the person giving the instruction to the receiving bank.
(b) If an instruction complying with subsection (a)(1)(A) of this section is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment.
(c) A payment order is issued when it is sent to the receiving bank.
History —Aug. 17, 1995, No. 208, § 4-103; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1024 - Funds transfers—Definitions

In this chapter:
(a) Funds transfer. — Means the series of transactions, beginning with the originator’s payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator’s bank or an intermediary bank intended to carry out the originator’s payment order. A funds transfer is completed by acceptance by the beneficiary’s bank of a payment order for the benefit of the beneficiary of the originator’s payment order.
(b) Intermediary bank. — Means a receiving bank other than the originator’s bank or the beneficiary’s bank.
(c) Originator. — Means the sender of the first payment order in a funds transfer.
(d) Originator’s bank. — Means: (1) the receiving bank to which the payment order of the originator is issued if the originator is not a bank, or (2) the originator if the originator is a bank.
History —Aug. 17, 1995, No. 208, § 4-104; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1025 - Other definitions

(a) In §§ 1021-1167 of this title:
(1) Authorized account. — Means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.
(2) Bank. — Means a person engaged in the business of banking and includes a savings bank, a savings and loan association, a savings and loan union or cooperative, and a trust company. A branch or separate office of a bank is a separate bank for purposes of §§ 1021-1167 of this title.
(3) Customer. — Means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.
(4) Funds-transfer business day. — Of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.
(5) Funds-transfer system. — Means a wire transfer network, automated clearinghouse, or other communication system of a clearing house, or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.
(6) Good faith. — Means honesty in fact and the observance of reasonable commercial standards of fair dealing.
(7) Prove. — With respect to a fact means to meet the burden of establishing the fact (§ 451(8) of this title).
(b) Other definitions applying to §§ 1021-1167 of this title and the sections in which they appear are:
(1) Acceptance § 1059
(2) Beneficiary § 1023
(3) Beneficiary’s bank § 1023
(4) Executed § 1101
(5) Execution date § 1101
(6) Funds transfer § 1024
(7) Funds-transfer system rule § 1161
(8) Intermediary bank § 1024
(9) Originator § 1024
(10) Originator’s bank § 1024
(11) Payment by beneficiary’s bank to beneficiary § 1135
(12) Payment by originator to beneficiary § 1136
(13) Payment by sender to receiving bank § 1133
(14) Payment date § 1131
(15) Payment order § 1023
(16) Receiving bank § 1023
(17) Security procedure § 1051
(18) Sender § 1023
(c) The following definitions in §§ 801-1004 of this title apply to §§ 1021-1167 of this title:
(1) Clearing house § 804
(2) Item § 804
(3) Suspends payments § 804
(d) In addition §§ 401-458 of this title contain general definitions and principles of construction and interpretation applicable throughout §§ 1021-1167 of this title.
History —Aug. 17, 1995, No. 208, § 4-105; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1026 - Time payment order is received

(a) The time of receipt of a payment order or communication cancelling or amending a payment order is determined by the rules applicable to receipt of a notice stated in § 451(27) of this title. A receiving bank may fix a cut-off time or times on a funds-transfer business day for the receipt and processing of payment orders and communications cancelling or amending payment orders. Different cut-off times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cut-off time may apply to senders generally or different cut-off times may apply to different senders or categories of payment orders. If a payment order or communication cancelling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cut-off time on a funds-transfer business day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.
(b) If §§ 1021-1167 of this title refers to an execution date or payment date or states a day on which a receiving bank is required to take action, and the date or day does not fall on a funds-transfer business day, the next day that is a funds-transfer business day is treated as the date or day stated, unless the contrary is stated in this chapter.
History —Aug. 17, 1995, No. 208, § 4-106; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1027 - Federal reserve regulations and operating circulars

Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of §§ 1021-1167 of this title to the extent of the inconsistency.
History —Aug. 17, 1995, No. 208, § 4-107; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter I - Subject Matter and Definitions (§§ 1021 — 1028) › § 1028 - Exclusion of consumer transactions governed by federal law

Sections 1021-1167 of this title do not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 (Title XX, Public Law 95-630, 92 Stat. 3728, 15 U.S.C. § 1693 et seq.) as amended from time to time.
History —Aug. 17, 1995, No. 208, § 4-108; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1051 - Security procedure

Security procedure. — Means a procedure established by agreement of a customer and a receiving bank for the purpose of:
(a) Verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or
(b) detecting error in the transmission or the content of the payment order or communication.
A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures, or similar security devices. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a security procedure.
History —Aug. 17, 1995, No. 208, § 4-201; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1052 - Authorized and verified payment orders

(a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that the authenticity of payment orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank is effective as the order of the customer, whether or not authorized, if:
(1) The security procedure is a commercially reasonable method of providing security against unauthorized payment orders, and
(2) the bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer. The bank is not required to follow an instruction that violates a written agreement with the customer or notice of which is not received at a time and in a manner affording the bank a reasonable opportunity to act on it before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer expressed to the bank, the circumstances of the customer known to the bank, including the size, type, and frequency of payment orders normally issued by the customer to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated. A security procedure is deemed to be commercially reasonable if:
(1) It was chosen by the customer after the bank offered, and the customer refused, a security procedure that was commercially reasonable for that customer, and
(2) the customer expressly agreed in writing to be bound by any payment order, whether or not authorized, issued in its name and accepted by the bank in compliance with the security procedure chosen by the customer.
(d) The term “sender” in §§ 1021-1167 of this title includes the customer in whose name a payment order is issued if the order is the authorized order of the customer under subsection (a) of this section, or it is effective as the order of the customer under subsection (b) of this section.
(e) This section applies to amendments and cancellations of payment orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in § 1053(a)(1) of this title, rights and obligations arising under this section or § 1053 of this title may not be varied by agreement.
History —Aug. 17, 1995, No. 208, § 4-202; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1053 - Unenforceability of certain verified payment orders

(a) If an accepted payment order is not, under § 1052(a) of this title, an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to § 1052(b) of this title, the following rules apply:
(1) By express written agreement, the receiving bank may limit the extent to which it is entitled to enforce or retain payment of the payment order.
(2) The receiving bank is not entitled to enforce or retain payment of the payment order if the customer proves that the order was not caused, directly or indirectly, by a person: (i) entrusted at any time with duties to act for the customer with respect to payment orders or the security procedure, or (ii) who obtained access to transmitting facilities of the customer or who obtained, from a source controlled by the customer and without authority of the receiving bank, information facilitating breach of the security procedure, regardless of how the information was obtained or whether the customer was at fault. Information includes any access device, computer software, or the like.
(b) This section applies to amendments of payment orders to the same extent it applies to payment orders.
History —Aug. 17, 1995, No. 208, § 4-203; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1054 - Refund of payment and duty of customer to report with respect to unauthorized payment order

(a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is: (1) not authorized and not effective as the order of the customer under § 1052 of this title, or (2) not enforceable, in whole or in part, against the customer under § 1053 of this title, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding 90 [ninety] days after the date the customer received notification from the bank that the order was accepted or that the customer’s account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.
(b) Reasonable time under subsection (a) of this section may be fixed by agreement as stated in § 454(1) of this title, but the obligation of a receiving bank to refund payment as stated in subsection (a) may not otherwise be varied by agreement.
History —Aug. 17, 1995, No. 208, § 4-204; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1055 - Erroneous payment orders

(a) If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order: (1) erroneously instructed payment to a beneficiary not intended by the sender, (2) erroneously instructed payment in an amount greater than the amount intended by the sender, or (3) was an erroneously transmitted duplicate of a payment order previously sent by the sender, the following rules apply:
(1) If the sender proves that the sender or a person acting on behalf of the sender pursuant to § 1056 of this title complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in clauses (2) and (3) of this subsection.
(2) If the funds transfer is completed on the basis of an erroneous payment order described in clause (1) or (3) of this subsection, the sender is not obliged to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.
(3) If the funds transfer is completed on the basis of a payment order described in clause (2) of this section, the subsender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution.
(b) If:
(1) The sender of an erroneous payment order described in subsection (a) is not obliged to pay all or part of the order, and
(2) the sender receives notification from the receiving bank that the order was accepted by the bank or that the sender’s account was debited with respect to the order, the sender has a duty to exercise ordinary care, on the basis of information available to the sender, to discover the error with respect to the order and to advise the bank of the relevant facts within a reasonable time, not exceeding 90 days, after the bank’s notification was received by the sender. If the bank proves that the sender failed to perform that duty, the sender is liable to the bank for the loss the bank proves it incurred as a result of the failure, but the liability of the sender may not exceed the amount of the sender’s order.
(c) This section applies to amendments to payment orders to the same extent it applies to payment orders.
History —Aug. 17, 1995, No. 208, § 4-205; Aug. 31, 1996, No. 176, § 4.
2023 Laws of Puerto Rico › TITLE NINETEEN - Negotiable Instruments (§§ 1-24 — 2409) › Subtitle 2 - Commercial Transactions (§§ 401 — 2409) › Chapter 47 - Funds Transfers (§§ 1021 — 1167) › Subchapter II - Issue and Acceptance of Payment Order (§§ 1051 — 1062) › § 1056 - Transmission of payment order through funds-transfer or other communication system

[(a)] If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to the bank, the system is deemed to be an agent of the sender for the purpose of transmitting the payment order to the bank. If there is a discrepancy between the terms of the payment order transmitted to the system and the terms of the payment order transmitted by the system to the bank, the terms of the payment order of the sender are those transmitted by the system. This section does not apply to a funds-transfer system of the Federal Reserve Banks.
(b) This section applies to cancellations and amendments of payment orders to the same extent it applies to payment orders.
History —Aug. 17, 1995, No. 208, § 4-206; Aug. 31, 1996, No. 176, § 4.