Section 13-4-502 - Preference to Negotiable Instruments

13-4-502. Preference to negotiable instruments. (a) Negotiable instruments issued by a bank as drawee in payment of checks or drafts deposited in any other bank for collection are entitled to preferred payment upon the insolvency of the issuing bank. (b) Negotiable instruments issued by any collecting bank in exchange for checks or drafts deposited with or forwarded to the bank for payment by the bank on which the negotiable instruments are drawn are entitled to preferred payment upon the insolvency of the collecting bank. (c) Negotiable instruments issued by a collecting bank in exchange for notes and other evidences of indebtedness deposited with or forwarded to the bank for collection are entitled to preferred payment upon the insolvency of the bank. (d) The provisions of this section do not affect other claims entitled by law to preference against insolvent banks.