2006 Minnesota Statutes

336.4A-207 MISDESCRIPTION OF BENEFICIARY.
(a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank, the
name, bank account number, or other identification of the beneficiary refers to a nonexistent or
unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance
of the order cannot occur.
(b) If a payment order received by the beneficiary's bank identifies the beneficiary both by
name and by an identifying or bank account number and the name and number identify different
persons, the following rules apply:
(1) Except as otherwise provided in subsection (c), if the beneficiary's bank does not know
that the name and number refer to different persons, it may rely on the number as the proper
identification of the beneficiary of the order. The beneficiary's bank need not determine whether
the name and number refer to the same person.
(2) If the beneficiary's bank pays the person identified by name or knows that the name and
number identify different persons, no person has rights as beneficiary except the person paid by
the beneficiary's bank if that person was entitled to receive payment from the originator of the
funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.
(c) If (i) a payment order described in subsection (b) is accepted, (ii) the originator's payment
order described the beneficiary inconsistently by name and number, and (iii) the beneficiary's bank
pays the person identified by number as permitted by subsection (b)(1), the following rules apply:
(1) If the originator is a bank, the originator is obliged to pay its order.
(2) If the originator is not a bank and proves that the person identified by number was not
entitled to receive payment from the originator, the originator is not obliged to pay its order unless
the originator's bank proves that the originator, before acceptance of the originator's order, had
notice that payment of a payment order issued by the originator might be made by the beneficiary's
bank on the basis of an identifying or bank account number even if it identifies a person different
from the named beneficiary. Proof of notice may be made by any admissible evidence. The
originator's bank satisfies the burden of proof if it proves that the originator, before the payment
order was accepted, signed a writing stating the information to which the notice relates.
(d) In a case governed by subsection (b)(1), if the beneficiary's bank rightfully pays the
person identified by number and that person was not entitled to receive payment from the
originator, the amount paid may be recovered from that person to the extent allowed by the law
governing mistake and restitution as follows:
(1) If the originator is obliged to pay its payment order as stated in subsection (c), the
originator has the right to recover.
(2) If the originator is not a bank and is not obliged to pay its payment order, the originator's
bank has the right to recover.
History: 1990 c 582 art 1 s 15